moneymaven
Well-Known Member
Joined: Dec 26, 2010 10:05:04 GMT -5
Posts: 1,864
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Post by moneymaven on Sept 14, 2011 13:39:47 GMT -5
mwcpa - I am looking to purchase a vehicle. I own a small business (I am the only employee and home office). I travel to and from clients and work at their offices. Do you recommend purchasing the vehicle as a business auto (title, financing, auto expenses) or as a personal auto with business expense reimbursement per mile at IRS limit?
Let me know if you need more information to give input.
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Post by Savoir Faire-Demogague in NJ on Sept 14, 2011 14:14:11 GMT -5
It sounds like you do contract work. Correct me if I am wrong.
Do you go to client A in the morning, stay at Client A's office all day, then go home. Then repeat the next day, and for a couple of weeks.
Then move on to another client, etc.
OR...
Do you go to Client A in the morning, work for 2-3 hours. Leave and go to Client B, work for 2 hours, leave and go to Client C.
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mwcpa
Senior Member
Joined: Jan 7, 2011 6:35:43 GMT -5
Posts: 2,425
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Post by mwcpa on Sept 14, 2011 14:38:19 GMT -5
generally, if a business purchases a vehicle then any personal use of the vehicle will be taxable income to the user....this can be an unwelcome surprise to many if the car is used more for personal purposes than business and the business pays for 100%....
I tend to prefer that my clients who are the owners of small businesses own or lease the car themselves if the car is more personal than business, then reimburse themselves for the use of the car, whether it be based on the standard mileage allowance or an actual allocation of costs between business and person use. If the vehicle is exclusively for business then I would suggest that the business own the vehicle and pay for the expenses directly. Others may disagree with my opinion... more facts would be needed to give a better answer... facts that cannot possibly be shared effectively in a forum like this.... what may be good for you may not be for others...
this is probably a good question to bring to your tax professional... this is why you should have one... not to just prepare a form in March or April, but to give advise during the year (I spend more time giving advise than preparing forms... actually today, it's now 3:30... I spent about 5 hours giving advise to business owners and individuals...)....
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moneymaven
Well-Known Member
Joined: Dec 26, 2010 10:05:04 GMT -5
Posts: 1,864
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Post by moneymaven on Sept 14, 2011 16:24:29 GMT -5
SF - I do both cases.
mwcpa - Yes, I agree. I have a call out to my CPA, just waiting to hear back. I always like to hear from you as well. I am thinking I am better off with the personal loan and usage reimbursement.
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