“Now, personally, I like a car with some sort of character.” Richard Hammond
In any profession, it’s best to lead by example. If the car that you’ve had for years (you know – the trusty one that got you through dental school and has seen better days) is making you cringe instead of smile, it may be time to consider purchasing a new vehicle. If this sounds like you, and you are in the market for a new car, below are a few general tips and notes to help out.
- Purchase or lease the vehicle under your personal name
- Get the car insured in your personal name
- Make the car payments with business funds
- Pay for any auto-related expenses with business funds. This includes:
- Maintenance & repairs
- Gas & oil
- Tolls & Parking
- Registration fees
- Keep a mileage log; this is the most accurate way to give your accountant the information needed to split the expenses into business-use miles and personal-use miles. Keeping track of actual miles is also an important way to provide hard evidence to the IRS in the case of an audit. Automobile expense is one of the items that the IRS is extremely particular about, so it is important to have this information available.
The good news regarding mileage is that the days of keeping a paper mileage log are long gone. There are several great apps available to help you easily keep track of miles, and are worth checking out. Here are a couple suggestions.