When it comes to leasing a car through your business there are a number of factors to consider. Getting a better deal is certainly one of them. But, you should also consider the tax advantages. There are a variety of ways to write off your vehicle expenses.
In particular, you should be able to deduct the cost of your lease and a few other related costs. For instance, you should be able to deduct a percentage of the sales tax included in your lease payment. If you do not pay the full amount at the end of your lease, you may be penalized.
The IRS has a comprehensive set of guidelines for claiming your vehicle expenses. These include a number of standard and special rules.
For example, you can deduct the cost of a standard mileage rate. However, if you use your vehicle to conduct business-related activities, you can also claim the actual mileage. Of course, this isn’t necessarily true for all vehicles. As a result, the best way to figure out how much you can write off is to calculate how much you actually use your vehicle for work.
The IRS has specific requirements you should meet before claiming a vehicle as a business expense. First, you should make sure you are not breaking any laws. You should also consult with a business attorney.
It’s not uncommon for business owners to want to add more field reps or expand their marketing and sales staff. They might also be interested in a newer, more reliable vehicle. This is why you will see many business owners choose to lease a car for their business.
In general, you can only deduct the vehicle’s cost as a business expense if you use your car for at least 50% of the time. However, there are exceptions. For example, if you have a company SUV, you can take advantage of a business tax break on the purchase of that vehicle.
Another stipulation is the requirement to provide proof of insurance. You should also know that there are many different types of insurance to choose from. Some providers will require a personal guarantee, which means you will have to personally take responsibility for any costs if the company isn’t able to make their payments.
Other perks of leasing a car for your business are its lower monthly payments and ability to switch cars. Be sure to check with a salesperson before signing a lease. Make sure to test drive the car to ensure you are happy with the decision.
To get the most out of your money and your business, you should find a way to lease a car that meets your needs. Check with your local dealership to see if they offer such a deal. Alternatively, you can look online for a number of different quotes. Test driving a vehicle is always a good idea to avoid paying more than you need to.
Finally, be sure to choose a model that meets your business’s needs. Consider things like a car that has a reputable manufacturer and a good warranty.