Hey everyone! I’m trying to understand the tax and accounting side of leasing a car through (or alongside) my S-Corp and would appreciate some guidance.
I run an S-Corp from home in the U.S., and while most of my work is remote, I do have regular business-related driving (meetings, picking up supplies, events, etc.). I’m considering leasing a Mazda CX-70, but since it’s under 6,000 lbs, I know it doesn’t qualify for the Section 179 heavy vehicle deduction.
My plan would be to lease the car in my personal name, make payments from my business account, and use it about 60%-70% for business and 30-40% personal. I also already have a separate personal vehicle.
How does this typically work in terms of deductions? Would I just deduct 60%-70% of the lease payments and related expenses? Are there specific rules I should be aware of for S-Corps in this setup (like reimbursements vs. direct payments)? And is there anything I should avoid doing to stay compliant?
Thanks in advance for any insight!
Leasing a car with an S-Corp, for deductions
byu/takeiitpersonal intax
Posted by takeiitpersonal
2 Comments
When a corporation provides a car to their employees, it is a taxable fringe benefit, the personal use of the car is wages to the employee and included on their W-2. There are a few different methods to determine how much needs to be included as wages:
[https://www.irs.gov/publications/p15b#en_US_2026_publink1000193773](https://www.irs.gov/publications/p15b#en_US_2026_publink1000193773)
Generally, its much easier to reimburse the employee for a car they personally lease for their business use.
You need to manage it with an accountable plan, yes, where the business is reimbursing the employee for the tracked and submitted business use expenses of the car.