Buying car as S-corp

Question

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

Answer 1

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.