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Can I use my personal car for my llc and can I debit the miles I drive this car for business purposes or do I need to credit my company with this car? If yes, how to do it?
AI accountant’s answer:
Yes, you can use your personal car for your LLC's business purposes, and you may be able to deduct the business-related miles driven using the IRS standard mileage rate. To do this, you should track and document the miles driven for business purposes, as well as the total miles driven for the year.
When using the standard mileage rate method, you would multiply the business miles driven by the IRS standard mileage rate for that year (for 2022, it's 58.5 cents per mile). This amount may be deducted as a business expense on your LLC's tax return.
Alternatively, you may choose to use the actual expense method. This method involves tracking and deducting the actual expenses incurred, such as gas, maintenance, insurance, and depreciation of your car, attributable to the business portion of your vehicle use. You'll also need to track the business miles driven and total miles driven for the year in this scenario.
Keep in mind that once you've chosen a method (standard mileage rate or actual expenses) for the vehicle, you must continue to use that chosen method for the life of the vehicle, subject to certain restrictions. It's essential to maintain detailed records for both methods to substantiate your claims in case of an audit.
You do not need to transfer ownership of the car to your LLC, and it's not necessary to credit your company with the car. Make sure to consult a tax professional to ensure that you're following the appropriate rules and regulations specific to your situation.
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