Personal use of your business vehicles?  The IRS wants to know!

Many business owners purchase vehicles through their businesses.  This allows them to deduct actual expenses, for example, fuel, repairs, licensing, etc., in addition to depreciating the purchase price.

 

In recent years, the IRS has put more emphasis on the proper reporting of vehicles owned by businesses.  Specifically, they want to be sure that all personal use (miles driven for commuting and non-business uses) is being reported.  Examples of personal use miles are:

• Commuting miles – are any miles driven between your home and your office/business are commuting miles. These miles are personal use and are not deductible.
• Any personal use of a company vehicle must be reported. This includes driving for personal errands, vacations, etc.

 

What do I need to do?

A mileage log is the best way to keep track of the commuting and personal miles. Simply record the date and total commuting/personal miles driven.  In December, call us with this personal use detail and we will help you properly report this personal use.

 

Calling us in December is especially important if your business is an S-corporation.  As a shareholder in an S Corporation, this personal use must be included in your payroll.