by Michael Lodge
I think I get the question almost on a weekly basis by clients – should I lease or buy. When I tell them to lease (based on the type of business they are running) then the next question is what do I get to deduct?
Question: If I lease a vehicle, can I deduct the cost of the lease payments plus the standard mileage rate?
If you lease a car you use in business, you may not deduct both lease costs and the standard mileage rate. You may either:
- Deduct the standard mileage rate for the business miles driven. If you choose this method, you must use the standard mileage rate method for the entire lease period (including renewals).
- Claim actual expenses, which would include lease payments. If you choose this method, only the business-related portion of the lease payment is deductible.
An income inclusion amount reduces both of these deductions.
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