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3 Replies Last post: Oct 25, 2007 12:03 PM by BDS INC

Tax Question on leasing a vehicle

Oct 24, 2007 5:29 PM

TinMan 7 posts since
Oct 10, 2007

What is the benefit of leasing a car thru your business as opposed to purchasing a car and claiming business mileage for the tax year? I've heard many say lease the car for a business but have not gotten an answer as to what exactly are the benefits.

In the past, at the end of the tax year I separate business mileage from recreational and claim the business mileage on tax returns. You have a choice either to itemize or take standard mileage deduction. So, why lease?

Tags: vehicle_lease, car_leasing Report as inappropriate

LUCKIEST 4,680 posts since
Aug 6, 2007

1. Re: Tax Question on leasing a vehicle Oct 24, 2007 9:37 PM

There are three benefits that come to mind.
One - - If you lease a car through your business, the monthly lease is completely deducted on your tax
return plus any business expenses like gas and insurance and maintenance (all deductible).
Two - -You get a new vehicle every time the lease is over with no hassle to sell your used car.
Three - Less bookkeeping on your end. You now separate mileage.
Hope this helps. LUCKIEST

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TinMan 7 posts since
Oct 10, 2007

2. Re: Tax Question on leasing a vehicle Oct 25, 2007 8:59 AM

in response to: LUCKIEST

Thanks for the quick response and help!

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BDS INC 131 posts since
Jul 20, 2007

3. Re: Tax Question on leasing a vehicle Oct 25, 2007 12:03 PM

Great answer by Luckiest but remember if you lease a vehicle for your business, the IRS will require that the majority of the use of that vehicle be for business purposes. So in the unfortunate instance, that you get audited, if it seems as if you are using the vehicle more for pleasure than for business, you could have an issue.

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ForumsTaxes and Payroll

This Question is Answered

Tax Question on leasing a vehicle

Oct 24, 2007 5:29 PM

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