Leasing a business vehicle appears straightforward.
It often is, but...
You may need some tax knowledge to ensure your rightful tax deductions.
As we explain in more detail below, you get deductions for three types of expenses for your leased vehicle:
1.
Advance payments (You likely think of these as down-payments. The law calls them rents-paid-in-advance.)
2.
Lease payments
3.
Operating expenses
Overview Flowchart of Down Payment
Business Use Only
This is simply a reminder. You can deduct expenses only for the business use of the vehicle (as opposed to personal use). To do this, you multiply total expenses by your percentage of business use. For more on finding this percentage, see What Is the Unpardonable Sin in an IRS Audit?
Situation
Let’s say you are looking to lease a vehicle for three years (36 months). The dealer charges you an up-front payment of $3,000 ... Log in to view full article.
