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      02-20-2010, 10:24 PM   #1
henryyxyu
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writing off a leased car as a business expense?

A friend of mine recently told me that its cheaper to lease a car if you own a business and I'm a bit curious as to how this works... I looked around on google but I still dont quite understand how this works (a bit braindead today I suppose). Can someone explain this to me? xD
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      02-20-2010, 10:31 PM   #2
Leonardo629
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it's cheaper because you're using pre-taxed money to lease, so it's an easy 20~30% saving.

If you're using your pay check money to lease, then it's after-tax money you're using.

Hope it's clear for you.
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      02-21-2010, 12:26 AM   #3
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It can be a slippery slope. Will you be using your car for work or can you claim that you do?

If you buy the car all you can write off is the depreciation, typcially over the length of the lease/loan, you end up writting off more on a lease.
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      02-21-2010, 12:46 AM   #4
dimabimmer
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I was wondering about that too... Thanks for explanation... Now I need good accountant to do all the business expense profit loss stuff...
Went to H&R Block, they said $800+ to file business tax for corporation. Is that a crazy fee, or is this a normal fee for small business tax filing?
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      02-21-2010, 08:37 PM   #5
henryyxyu
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Quote:
Originally Posted by SpencerM3 View Post
It can be a slippery slope. Will you be using your car for work or can you claim that you do?

If you buy the car all you can write off is the depreciation, typcially over the length of the lease/loan, you end up writting off more on a lease.
So technically I can lease first then opt to buy the car at the end of the lease right? (I've never leased a car so im pretty noob at this ). I'm not the employee if it makes any difference. (family business)
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      02-22-2010, 01:26 PM   #6
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Quote:
Originally Posted by henryyxyu View Post
I'm not the employee if it makes any difference. (family business)
I'm pretty sure you need to be using the car as part of your business and keeps records of use. No idea how many people fake the use/records but seems like it would be a bad idea to do so.
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      02-22-2010, 03:25 PM   #7
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if you are self employed and have the proper steps of making sure you are set up as a corporation, that is a good start. I am self employed and make sure all expenses are paid through a completely separate account, including a car, auto insurance, gas etc. My CPA does all my book keeping and will properly proportion a deduction for the use of the car for business and personal.
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      02-23-2010, 05:15 AM   #8
platinumpapi
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I am in the same exact situation too. Family owned business, but my lease is about to expire in a few months. We are a cash business too. Our business is a corp and we use the bmw for both personal and business. What do i ask or tell my accountant so that he can add it to our expenses before we file our taxes?
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