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View Full Version : Leasing a car as a business tax write off?


Dirty Water
02-24-2008, 04:38 PM
Does anyone lease a vehicle so they can write it off on their taxes at the end of the year?

This year, I'm looking at paying 30% tax on some of my income, and I know that a leased car can be used as a tax deduction.

Normally I'm against leasing, but in this case it sounds like it may save me money.

Does anyone do this?

IN2MOWN
02-24-2008, 05:41 PM
Im not sure I understand. Why do you have to lease a vehicle to write it off?

Dirty Water
02-24-2008, 06:19 PM
Im not sure I understand. Why do you have to lease a vehicle to write it off?

You can write off all of the lease payments as business expense if you can prove that you used the vehicle for business.

The tax laws are stacked towards leasing over owning for some reason.

Wet_Boots
02-24-2008, 06:48 PM
If you're a salaried employee, I don't think you can get much from leasing. (one of those questions I heard a detailed answer to, while the TV was droning on in the background) I recall equipment leases that were geared toward quick writeoffs.

mike lane lawn care
02-24-2008, 07:05 PM
say you used the car as a runabout for your company, and for doing estimates and you're all set.

Wet_Boots
02-24-2008, 07:28 PM
You don't really want to be raising red flags on your return, so don't get too creative.

IN2MOWN
02-24-2008, 07:32 PM
You can write off all of the lease payments as business expense if you can prove that you used the vehicle for business.

The tax laws are stacked towards leasing over owning for some reason.



I was not aware of that.

cantoo
02-24-2008, 08:03 PM
We don't lease but we do write off a percentage of our minivan for business purposes. I think it's around 30%, it's tied to the mileage we put on per year. Repairs and licence are 100% write off. the insurance on it is the percentage too. It's used for estimates, banking, bill collecting, parts pickup, office supply pickup. We have it vinyl lettered so it is also used for advertising. We did discuss leasing but felt it was easier and less red flag raising to just use the percentage way. I have been told that if you don't have a personal vehicle then you are better off not leasing it because you have to have something for personal use. The percentage way works better for this.
Your tax laws may be different than mine. Might want to talk to an accountant to help make the decision.

Dirty Water
02-24-2008, 08:08 PM
If you're a salaried employee, I don't think you can get much from leasing. (one of those questions I heard a detailed answer to, while the TV was droning on in the background) I recall equipment leases that were geared toward quick writeoffs.

Actually, I put in my 40 hours at my company, but I also consult an additional 20 hours as a sole proprietorship.

Of that consulting money, I pay 30% in taxes.

This year I landed a rather large consulting gig (mid five figures), on top of my regular work.

Because of this, I know I need to come up with creative ways to avoid paying tons of tax money :)

Wet_Boots
02-24-2008, 08:20 PM
I don't know about tons of money, but you could take some deductions for the expenses of this propietorship. Keep a mileage log for the consulting gig, at the very least.

ALarsh
02-24-2008, 09:52 PM
Just purchase a car and depreciate it over 2-3 years.

Lawnworks
02-24-2008, 11:53 PM
It seems like you could still write off 30% of your car useage even if you did not lease.

steve45
02-25-2008, 12:48 AM
I just looked at a copy of an older tax return I had on this computer for when I had to use my own vehicle for business use. I didn't see the word 'lease' anywhere on the form.

I would suggest that you go to the IRS website and do a search for Form 2106 (Employee Business Expense) and read the instructions for it. Should answer your questions.

Jay Ray
02-25-2008, 10:48 AM
Actually, I put in my 40 hours at my company, but I also consult an additional 20 hours as a sole proprietorship.

Of that consulting money, I pay 30% in taxes.

This year I landed a rather large consulting gig (mid five figures), on top of my regular work.

Because of this, I know I need to come up with creative ways to avoid paying tons of tax money :)

Glad to see you are doing so well. But I'm puzzled. As a Democrat (I think) shouldn't you just rejoice about it and be glad to pay more taxes, not look for ways to get out of it? More taxes is good right?

Dirty Water
02-25-2008, 12:08 PM
Glad to see you are doing so well. But I'm puzzled. As a Democrat (I think) shouldn't you just rejoice about it and be glad to pay more taxes, not look for ways to get out of it? More taxes is good right?

I'm already paying a fortune on the regular job. I don't mind paying the same ratio on the 2nd job. I do not like having to pay 30% :)

If I knew my money was going to be put to good use, maybe things would be different.

Fvstringpicker
02-25-2008, 12:27 PM
Bear in mind that, whether buying or leasing, vehicles weighing less than 6000 lbs has limited deductions for depreciation and lease expenses. Don't assume that by leasing you someone get a better write off.

poolboy
02-25-2008, 04:41 PM
Dirty- I wasn't aware there was a difference. Do you itemize your vehicle expenses or do you take the 27 cents/mile right off? 2008 will have a 50 something cents/mile write off. BTW, if you want less taxes, donate more to a charity.

cantoo
02-25-2008, 05:19 PM
poolboy quote : Dirty- I wasn't aware there was a difference. Do you itemize your vehicle expenses or do you take the 27 cents/mile right off? 2008 will have a 50 something cents/mile write off. BTW, if you want less taxes, donate more to a charity.

I can help you out there, I'm a charity. Send me the cash I'll print you up a receipt. What colour do you want?

lawnspecialties
02-25-2008, 07:46 PM
Glad to see you are doing so well. But I'm puzzled. As a Democrat (I think) shouldn't you just rejoice about it and be glad to pay more taxes, not look for ways to get out of it? More taxes is good right?

I knew that was coming at some point.:laugh::laugh:

Jay Ray
02-25-2008, 09:08 PM
I'm already paying a fortune on the regular job. I don't mind paying the same ratio on the 2nd job. I do not like having to pay 30% :)

If I knew my money was going to be put to good use, maybe things would be different.

I've always thought socialism was a waste of tax money and am beginning to think militarism outside the borders is too. The John Birch Society is right: Get out of the UN and bring ALL the troops home. Let the world miltarize its own self.

JonP
02-27-2008, 07:56 PM
if you use your personnal vehicle for business purposes your entitled to a set rate mileage for tax purposes. you must keep detailed records of the miles driven, take the start and ending odometer readings and write them down. your also entitled to maintenance costs. as someone said before, dont get creative here, take what your entitled to and thats it. you can lease a vehicle and write off the cost for business just like a truck driver can lease a truck and write off the payments. i dont really know how that works but its fairly common and any cpa should be able to explain how it works. if it were me i would go to my cpa and explain what i wanted to do and he could run through all of the tax implications for me and help me to make the best decision financially