I have an S-corporation and I will be buying a car under it today. There are somethings I am unsure about it which I would like to confirm.

Do I pay for all the costs of the car out of my business account? (car price + taxes + fees)

As for insuring the car, do I get regular regular personal insurance and then add the business as a second driver? Do I pay from personal account or business for the insurance premium?

Do I pay for the car repairs, or other incidentals like floor mats, out of business account or personal?

I'm based in Pennsylvania, USA


The best way to do this is to pay for the entire car, including gas, insurance, and repairs, from S-corp funds, then meticulously track how many miles are used for personal and how many miles for business.

If you pay with S-corp funds, you will claim the personal miles as a taxable benefit from the S-corp on your personal return. The S-corp can then claim all the expenses and depreciation on the vehicle, reducing the S-corp's tax liability.

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