How to have my company pay for my work truck?
I own a small S corporation and use my truck to go to residential houses to complete work in my local area. Mostly 2-3 trips a day locally. I bought my truck about 4 months ago personally then bought this business a month ago. I would like to get my company to pay the loan bill directly from my business account each month. How can I do that? I'm sure it's not as simple as just writing the check from my business account. Do I set up a lease or something? Of course the reason is to go around the tax burden of using income from the business after taxes and pay from the business and count as business expense, thanks.
Congrats on your new business!
You could lease the truck to your business, but in my mind that would open you up personally to lease income. Anyone that your business pays more than $600 to during the year should get an IRS Form 1099. Then you'd have to pay taxes on that above and beyond your S-Corp income.
You could have your business purchase the truck from you, and take over the loan. Make out an actual Bill of Sale to keep on file. But then you'd have to move your vehicle insurance to the business, which would be a deductible business expense, and transfer the title as well.
How does that sound to you?
As an aside, are you taking payroll from the business? The IRS is watching S-Corp owners for that.
Let me know if you need help with any journal entries, or some further brainstorming on that.
And remember, I do business tax returns, too!