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Leasing a car as a business tax write off?

Discussion in 'Rental Equipment' started by Dirty Water, Feb 24, 2008.

  1. Dirty Water

    Dirty Water LawnSite Fanatic
    Posts: 6,799

    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?
  2. IN2MOWN

    IN2MOWN LawnSite Platinum Member
    Posts: 4,993

    Im not sure I understand. Why do you have to lease a vehicle to write it off?
  3. Dirty Water

    Dirty Water LawnSite Fanatic
    Posts: 6,799

    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.
  4. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Posts: 46,431

    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.
  5. mike lane lawn care

    mike lane lawn care LawnSite Bronze Member
    Posts: 1,707

    say you used the car as a runabout for your company, and for doing estimates and you're all set.
  6. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Posts: 46,431

    You don't really want to be raising red flags on your return, so don't get too creative.
  7. IN2MOWN

    IN2MOWN LawnSite Platinum Member
    Posts: 4,993

    I was not aware of that.
  8. cantoo

    cantoo LawnSite Silver Member
    Posts: 2,910

    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.
  9. Dirty Water

    Dirty Water LawnSite Fanatic
    Posts: 6,799

    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 :)
  10. Wet_Boots

    Wet_Boots LawnSite Fanatic
    Posts: 46,431

    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.

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