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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
Experience:  10 years experience
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The corporation is located @ tampa florida -we currently

Customer Question

The corporation is located @ tampa florida -we currently classified as s corp ( gadget Repair Store). we would like to buy car for the corporation. can we use the tax deduction for the monthly payment for the car loan and insurance as part of our corporate
tax. or the car need to only leased to be consider tax deductible . would you please advise the deduction line number for car payment and insurance on the 1120s. -also, i would like to scan all my office invoices and document. is this tax acceptable document
method. since i am trying to go paperless in my business. what is the statue imitation for business document to be stored by business 10 years or less. -what the best soft ware for payroll for small business of three employee or less other than quickbooks.
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
If the car is used 100% for business - you may deduct a part of loan payments attributable to the interest.That woudl be deducted as business interest expense and will be reported on form 1120S line 13http://www.irs.gov/pub/irs-pdf/f1120s.pdf.The principal payments are not deductible - that included into the purchase cost of the car.However you may deduct depreciation on the car - if you choose to deduct actual car expenses.Depreciation is reported on line 14.If you choose to deduct car expenses based on the standard mileage - the depreciation is assumed as included into that amount - and no additional deduction would be allowed.Similar for car insurance - if you choose actual car expenses - report that cost on line 19 Other deductions and attach a statement.If you are using standard mileage rate - insurance costs woudl be already included and no separate deduction in this case.