Overview · 3 min read
Personal name or S corp?
An S corp can own the vehicle and deduct its costs, or you can own it personally and have the S corp reimburse your business miles. Both work. The better choice depends on the vehicle, your business use and how much admin you want.
- Who it fits
- S corp owners deciding how to buy a business vehicle.
- Figures
- 2026 tax year
The key rule
Corporate ownership: the S corp deducts costs, and personal use must be valued and added to your W-2. Personal ownership: the S corp reimburses business miles tax-free through an accountable plan.
How it works
| S corp owns it | You own it | |
|---|---|---|
| Best for | Heavy vehicles, high business use | Mixed use, lower-cost cars |
| Deduction | Actual costs and depreciation | Mileage reimbursement |
| Personal use | Added to your W-2 | No extra reporting |
| Admin | More | Less |
3 steps
Estimate business use
High business use and a heavy vehicle often favor corporate ownership. Mixed use often favors personal ownership with reimbursement.
Consider insurance and the loan
Titling in the company may change insurance and financing. Check with your agent and lender.
Set up the paperwork
Either an accountable plan for mileage, or a method for valuing and reporting personal use of a company car each year.
Example
Two owners, two answers
Owner A buys a 6,500-pound truck used 85% for job sites. The S corp owns it and deducts most of the cost in year one; the small personal use is added to A's W-2.
Owner B drives a sedan 40% for business. B owns it personally, logs miles and is reimbursed by the S corp each quarter.
Common mistakes
- Deducting the same vehicle costs in both places.
- Forgetting to report personal use of a company-owned car on your W-2.
- Commuting in a company car without counting it as personal use.
Key dates
- December 31
- Personal use of a company car must be valued for the W-2.
Questions we hear
How is personal use of a company car valued?
Usually with the IRS annual lease value tables or a cents-per-mile method. We work it out from your log.
Can I transfer my current car to my S corp?
Yes, generally at its fair market value. The S corp then depreciates it from that value.
General education for TaxSquad clients, not advice for your situation. Rules and figures change. Talk to us before acting on this guide.