Form 1120-S - Standard Mileage Method for Vehicle Expenses

Generally, the S-corporation reimburses the employee for vehicle expenses incurred when using their personal vehicle for company purposes. Corporate employers may not use the standard mileage rate to compute the vehicle expenses for company-owned vehicles. However, they may use the standard mileage rate in determining the reimbursement to employees for business use of the employee's vehicle. This reimbursement would be considered a business expense deducted on the S-corporation return. Conversely, if the vehicle is owned by the S-corporation, the business is only allowed to deduct actual vehicle expenses (to the extent of business use).