Business Lease Vehicle Question

[O-Ace]

I know we have more than a few people here who run their own business. Do any of you lease a vehicle through your company? If so, are you able to write off the entire lease payment as a business expense? According to my accountant, it's better to just bill the business for the miles @ $0.36/mile but that doesn't really sound like the best way to go. Looking for input from business owners or anyone who's knowledgeable in this area.

Thanks,

-Awais

 

[hlweyl]

I don't know much about that but I do know my boss writes off his suburban. If you buy a large enough truck you can do that. I forget the gross weight limit. The law was originally written for business buying dump trucks, step vans, etc.

 

[NSX_Dreamer]

Generally yes, if you lease the car through the company, you can write off the lease payments. There are IRS rules around luxury cars and such, which limits the types of vehicles that you can lease and write off.

some more info

and here

 

[O-Ace]

Did a little more digging and made a few phone calls; turns out the IRS rules require the business to track personal and business use, but they don't really press hard on this rule so normally businesses write off the entire lease payment.

-Awais

 

[White92]

I don't know much about that but I do know my boss writes off his suburban. If you buy a large enough truck you can do that. I forget the gross weight limit. The law was originally written for business buying dump trucks, step vans, etc.

I think it's anything over 9,000 pounds. You can prorate everything less than that. My understanding is that it was put in place to help farmers, etc... that have to buy very heavy machinery, but now other people are taking advantage of it. That's why you see so many businessmen driving H2's and the new Porsche SUV. (forgot what it's called)

 

[LeftLane]

I think it's anything over 9,000 pounds. You can prorate everything less than that. My understanding is that it was put in place to help farmers, etc... that have to buy very heavy machinery, but now other people are taking advantage of it. That's why you see so many businessmen driving H2's and the new Porsche SUV. (forgot what it's called)

It's actually 6000 pounds, and the law allows you to write off the entire cost (up to $100k currently) the first year, rather than depreciating over time. That number will be going down soon, hence the push for business owners to buy SUVs now if they want the deduction. You still have to have enough income to make the deduction, and it has to be for business use.