My book keeper suggested that I consider leasing my wife's car to our business since she drives all over for the company but doesn't want to keep up with mileage and expense reports.

I'm thinking $250 per month to lease her car to the company. I realize that this would go as taxable income to us, but we don't make a lot yet so that's ok for now.

Showing income from it defeats the purpose.

Sounds like a bookkeeper that doesn't know a lot about tax law.

You both may be right but care to elaborate? If I'm in the 15% bracket, I'd be fine with getting 85% of $250 per month. What am I missing?

If you lease it to the company, that is X number of dollars of income as rental income, and you still have to provide the mileage logs to show what is business and what isn't business so you what part of the vehicle expenses you can deduct as rental expenses.

You're showing x amt of income instead of straight deduction..plus depreciation. Still have to keep up with gas, mileage & maintenance. You're taxed on income used to pay car note, then taxed again on that same $ when it pops back up as income.

Clarification: My car is paid for. no note. Make any diff?

Yeah, it sounds like that might be the best option since you already own the car
Outright. If you can swing it, a better way to donut is buy a new car through the company and just have it as a bene to her....or have the business make the payments or something to that effect.

But since you steady paid it off, the best bet may be just leasing it to the company??

There's probably an option of transferring title over to business at just below gift tax level..

Your heading down a dark road, to trouble, possible real trouble. Take my word for it, find an accountant, a real one, not some bookkeeper. The signature that goes on the tax return is yours, you are responsible for the content of your tax returns, not anyone else.

The "my book keeper" part of this bothers me. Better talk to a cpa that is involved with taxes.

Thats where you tell the wife you have to do it. If she cant, find someone else to do the errands.

Keeping expenses for your car and mileage is not complicated.

How is the business structured? That is also pretty important, as the others have said you need to find a good cpa and not a bookkeeper they are two very different things.

Walter

Don't forget insurance. It then becomes a "company vehicle" and has to be insured as one. Too many T's to cross and I's to dot. May benefit the business, but I'd let a CPA look at it before I tried it. Good luck.
Paul