Vehicle lease or personal use

mogley98

Currently I log all of my business miles on my vehicle and turn that worksheet into my accounting people at year end.

Wondering if it wouldn't make sense to lease or buy a vehicle and let the business pay for it.

If I buy it with after tax money and deduct business expenses it seems like it would be a better deal to let the business buy/lease it and pay with pre tax money?

I have an Email in to the accountant but was wondering what experience some of you have with this?

Don McManus

I looked into it a number of years ago. There was no financial advantage to having a company truck for business and personal use if one were to adhere to the tax code.

We take the $ 0.575 per mile on our personal vehicles.

Junkballer

Not sure what type business you have but years ago my accountant convinced me to let my business lease my vehicle for insurance and liability reasons alone,......that to me was the reward [;)], Tax/IRS lease laws seem to change yearly.

shilowar

quote:Originally posted by mogley98
Currently I log all of my business miles on my vehicle and turn that worksheet into my accounting people at year end.






Wouldn't it make sense to ask this question of your accounting people?

mogley98

You don't read well do you?
quote:Originally posted by shilowar
quote:Originally posted by mogley98
Currently I log all of my business miles on my vehicle and turn that worksheet into my accounting people at year end.






Wouldn't it make sense to ask this question of your accounting people?

shilowar

quote:Originally posted by mogley98
You don't read well do you?
quote:Originally posted by shilowar
quote:Originally posted by mogley98
Currently I log all of my business miles on my vehicle and turn that worksheet into my accounting people at year end.






Wouldn't it make sense to ask this question of your accounting people?



Apparently not!

neacpa

When it comes to auto expenses, you can either use the actual expenses or standard mileage rate. Over the long run, the standard mileage rate will give you a better deduction. The standard mileage rates covers all auto expenses except for taxes and tolls/fare charges. Something else most people like about the standard mileage rate is - you don't have to keep up with the receipts (gas, oil changes, repairs/maintenance, etc.).

However, if you need a sudden impact to benefit taxes for one year, the actual expenses would give you that impact by utilizing the Section 179 if the GVWR is sufficient. But you would losing benefits in later years.

Either way you use, it always comes back the business miles driven. Therefore a log book is theoretically required, but in reality, very few people keep actual log books. For example, if you put 30,000 miles on a truck and 24,000 of them are business the business use is 80%. That means you can take 80% of the depreciation, gas, repairs/maintenance, interest, insurance, etc. Or you can take the standard mileage rate on the 24,000 miles plus 80% of the interest.

As far as liability, if you are involved in a wreck, lawyers will be suing both you, as the driver, and the company. Wouldn't matter if you owned the truck or the company.

pwillie

I have been in business for 46 years...and I use to run Company vehicles ...but with the new tax laws.. I went the maintenance rt...Gas and oil...for the use of my personal vehicle...works for me...trying to keep up with mileage and log time cost me more than it was worth...Besides,my insurance is cheaper...I own the company ,so what does it matter...[:o)]

Mobuck

When I was farming on a bigger scale, I leased pickups for a while. It worked OK but not as well as I hoped on the first PU. The second PU was the one I did well on. I leased it from GMAC for 3 years, then I got a second 3 year lease (same vehicle) through a credit union, and finally I bought the pickup at lease end from the credit union. That vehicle was a tax deduction for 11 years.

mogley98

Kudo's Don McManus, the Accountant called today and said it works about the same writing off the lease payment or interest and depreciation and fuel versus the mileage.

Rocky Raab

One other point you should not overlook: insurance rates on leased cars are much higher than on owned ones. Often, that makes a leased car end up costing more than buying.