Hello, as a self employed individual, or as an S-Corp, is a lease payment on a vehicle tax deductible? I know that a regular car payment that you have financed is not, but I have heard a lease payment is?
2007-04-22 04:34:48 · 3 answers · asked by Helen R 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
Yes it can be if car is used 100% for business. If car is not used 100% for business you have two options:
#1) figure out the average percentage (by recording milage for several months) the car is used for business and deduct that percentage of your actual expenses for the car (including your lease payment, gas, repairs, etc).
#2) Or you can record all mileage throughout the year and claim standard mileage rate, which is supposed to take all expenses into consideration (if you do this, you can NOT also deduct the lease payment).
Go here and see section titled "business use of your car."
http://www.irs.gov/businesses/small/article/0,,id=109807,00.html
2007-04-24 07:27:20 · answer #1 · answered by Sharon 3 · 0⤊ 0⤋
It can be if it's used only for your business. If you also use the car for personal or commuting use, then only the percentage that's business miles is deductible. You can't take the lease payments though and ALSO take the mileage allowance.
If you buy a car rather than lease it, you're right you can't deduct the car payment, but you can depreciate the car.
2007-04-22 10:59:38 · answer #2 · answered by Judy 7 · 0⤊ 1⤋
In certain circumstances - yes.
You should check the IRS's website - Business Use of Car or a tax professional. Hope that helps.
2007-04-22 08:25:39 · answer #3 · answered by FrankieM 2 · 0⤊ 0⤋