What Are the Tax Implications of a Company Car With a Company Logo?

by Fraser Sherman, studioD Google

Having a company car can make a big impact on your business taxes. Whether there's a logo on it or not doesn't have any impact on your taxes. If you're driving around on business, there's no extra tax write-off for the logo. If it isn't business you're using the car for, the Internal Revenue Service states specifically that ad displays can't turn personal mileage into a business trip.

Business Travel

If your business owns a company car -- or van, or pickup truck -- you can take 100 percent of the driving costs as a tax write-off. You can deduct 56.5 cents per mile driven, as of 2013 -- the rate goes up each year -- or keep track of the money you spend for gas, oil changes, tires and maintenance and report your actual expenses. Even with the straight mileage expense, you can write off parking fees and tolls as an extra deduction.

Personal Use

If you allow your employees to drive a company-owned car home -- or if you make use of it yourself as the business owner or manager -- this counts as a taxable fringe benefit. The value is usually equal to the mileage deduction: If you drive the company car 1,000 personal miles during the year, that's a $565 taxable benefit, as of 2013. You don't have to take out withholding to cover the personal-driving benefit.


If you're a sole proprietor and you use your personal car for business, you have to divide up usage. If you have a regular schedule of business appointments, figure out how much business driving you do each month and how much is personal. If you drive 400 business miles out of 2,000 total miles, you can take the mileage deduction or claim 20 percent of your total expenses. If your driving schedule is less predictable, record your mileage as you go along.

Avoiding Trouble

You'll get in less trouble with the IRS if you know what the agency counts as business use. Driving from the office to meet a client is business, but commuting from home to the office is a personal trip. Like a company logo on the door, putting tools or legal files in the trunk doesn't turn your drive into business travel. Keep good records on mileage or car expenses so you can back them up if you're audited. IRS Publication 463 gives guidance on record keeping.

About the Author


Photo Credits

  • Ryan McVay/Photodisc/Getty Images
Suggest an Article Correction