If you use the standard mileage rate method, the following applies:
You must use this method over the entire lease term.
You figure your deduction by multiplying the number of business miles times the standard mileage rate for the particular year.
You cannot deduct any other expenses except business-related parking and road tolls.
If you use the actual expense method, the following applies:
You can deduct the part of each lease payment that is for the business use of the car in your business.
You must spread any advance lease payments over the entire lease term.
If you lease a car for 30-days or more, you may have to reduce your lease payments deduction by an “inclusion amount” each year.
You can deduct your other car expenses by the business percentage use of the car each year.
You cannot claim depreciation.
Proper record-keeping is required to document and substantiate your auto expenses.
Mike Lupo, SCORE Counselor
Visit us at: www.scoresouthflorida.net