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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12471
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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We have a small business, an S corporation & partnership. We

Customer Question

we have a small business, an S corporation & partnership. We use a van which belongs to my husband. It is used only for the business. We pay all expenses personally and the business pays us $0.54 per mile. The business does pay for gas for the vehicle. Is that alright?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.



Your intuition that something is not quite right here is good. (So sorry to be the messenger)


But you must either use the actual cost method OR the stated mileage rate, but not both.


Actual cost is gas, oil, and all other operating costs (such as maintenance and repair, tires, and depreciation - lease if the car is leased rather than owned).


the mileage rate (54 cents per mile in 2016) is a proxy (an average of those actual costs).


So when the business is reimbursing the 54 cents AND paying for gas as well (gas being one of those actual costs that the 54 cents replaces) you are "double-dipping," so to speak.

Expert:  Lane replied 1 year ago.

Please let me know if you have any questions at all.


If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here


Thank you!


I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986