Hello, my name is Benjamin, and I’ve been a licensed attorney for over 19 years. I look forward to assisting you. While we cannot represent clients directly, we provide answers and guidance on legal issues. Let’s get started.

Let me clarify your situation:

Just to confirm — this is a personal vehicle owned by the business owner who wants the company to pay her car payment, correct?

Here’s how this typically works if the company is an S Corporation or C Corporation:

If the vehicle is personally owned by the shareholder/employee:

• The company cannot pay the car loan (note) directly. That is not considered a deductible business expense.
• Instead, the owner can submit a reimbursement request to the company.
• The company can reimburse her using the IRS standard mileage rate (see current mileage rates).
• This reimbursement is deductible by the business and non-taxable to the employee.
• The standard mileage rate includes gas, maintenance, insurance, and depreciation.

If she prefers, she can choose to use the Actual Expense Method, but even under that, car loan principal payments are not deductible. Only lease payments may qualify.

Key Points:

• She cannot deduct or be reimbursed for car payments on a purchased vehicle.
• She can be reimbursed for gas and mileage, but only for the business-use portion (not personal driving or commuting). (see publication 463, table 1-1)

Commuting miles (from home to a regular workplace) are not deductible.

Acceptable business-use miles include:

• Visiting clients
• Going to the bank or office supply store for business
• Meeting with accountants or lawyers on business matters

Let me know if you’d like this broken down further, such as in a checklist, tax memo, or documentation format.