Buying a car for a LLC?

Question

My LLC is looking at cutting our tax liability. What is the correct way to buy cars for the partners of the LLC? Dont wanna make the IRS mad !

thanks

Answer 1

You are only going to be able to deduct the vehicle usage (either standard mileage or actual expenses) that is applicable to your business activities. It won't matter to the IRS who owns the car.

If a partner uses his or her personal vehicle for use in the business, you can elect to take the standard mileage deduction or the actual expenses (gas, repairs, depreciation, etc) incurred in using the vehicle for the business.

Be sure to keep very accurate records (receipts and mileage log).

Answer 2

an LLC does not pay tax the members pay the tax on their share of LLC income.
No matter how the cars are purchased only the business portion is deductible.
If the LLC owns the car you costs will rise because insurance on a company owned car is more expensive than a personally owned car. If the LLC owns the cars you might be subject to a state personal property tax on their value each year.
The cost of accounting for the personal use that is charged back to the members can be burdensome to track and calculate.
Each member can deduct their business use of the car on their personal tax returns as an expense against the LLC income rather than as an employee business expense.

Answer 3

Lease it and expense it every month.