Can an S-corp use standard mileage rate?
Can an S-corporation deduct auto expenses at the standard mileage rate instead of actual expenses? Corp owns auto, new S-corp with one owner, mileage would give them a much higher deduction.
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mcphil
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09/01/11 2:09pm PDT
Viewed by asker 10/23/11 5:19pm PDT
Viewed by asker 10/23/11 5:19pm PDT
9 Replies
09/01/11 2:27pm PDT
The standard mileage rate would exceed 100% of the deductible actual costs?
Larry Hess, CPA | Albuquerque, NM
09/01/11 2:46pm PDT
I don't see any prohibition for a corp. using the standard mileage rate in Rev. Proc 10-51, which is the authority. I can see a bookkeeping issue regarding recording the excess of the deduction over actual costs.
09/02/11 9:44am PDT
Latest post
You'd just need a Sch M adjustment, same as for percentage depletion in excess of NBV.
In this case, though, it falls in the category of "disallowed because not specifically permitted." See my cite farther down the thread.
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09/01/11 2:59pm PDT
A few years ago, Phoebe Roberts answered this same type of question to the effect that only individuals can use the standard mileage rate, not S-Corporations. (I may be mis-quoting her, but I'm sure she said S-Corp's can't use the standard mileage on a corporate-owned vehicle. As soon as I saw that post, I changed what one of my S-Corps had been doing.)
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09/01/11 3:05pm PDT
I googled this question, and I came up with an article by Turbo Tax that agrees that only individuals can use the mileage rate, but I can't find any specific prohibition in IRS publications.
09/01/11 3:54pm PDT
Rev Proc 64-10 doesn't contain the word "corporation" so I don't think it gives a definitive "no." In any case, it's been superceded many times over.
And here are the only other posting in Lacerte Community than I can find:
Bryce Forney Contributor 02/21/09 9:35pm PSTAbsolutely. The same auto expense rules apply to S-corps as for sole proprietors, and mileage reimbursement is one of those available methods.
Bryce Forney, CPAForney Accountancy
PhoebeRoberts Accountant Community AllStar 02/21/09 9:41pm PST Latest post Google suggests there may be a "within the last couple of years" Rev Proc disallowing it, but I'm not where I have access to my good research stuff.
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09/02/11 9:43am PDT
The solution
CCH commentary says "Only self-employed individuals and employees may use this method. Rev. Proc. 2010-51"
.07 An employee may deduct an amount computed under section 4 of this revenue procedure only as an itemized deduction. This itemized deduction is subject to the 2-percent floor on miscellaneous itemized deductions in § 67.
.08 A self-employed individual may deduct an amount computed under section 4 of this revenue procedure in determining adjusted gross income under § 62(a)(1).
No deduction for anyone other than an employee or self-employed, because there's no deduction for anyone for anything unless specifically allowed, and only EEs and SEs are specifically allowed.
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