M3 CS Lease/Tax Question

[rmizzle101]

For all my finance people -

Potentially looking to get out of my M4 (purchased) and get into an m3 lease. I'm in CA, and now that I'm self employed, from what I've read makes sense to get into a lease.

My payment would be about $1,100 and I'd drive about 7-10k miles a year 80% business related. Is this worth getting into a lease for the tax deduction?

Consulting with a CPA in the next week or so but wanted some opinions on here for those who know this space.

Thanks much.

[SMGCFP]

The lease is nice because you don't have to get into depreciation (more complicated, but possible). You should keep a log of miles, and you are able to deduct as a business expense the payment that corresponds with your % use of the vehicle for business. Business defined is all business use, but does not include the 1st trip and last trip of the day. A PO Box very close to home does the trick.

This is the "by the book" way to do this.

[RickFLM4]

I am self employed and lease but have also owned.

Leasing better matches the deduction with the expense but even an owned car can be depreciated (really slowly) and the loss on disposal deducted. There are other advantages to leasing, including not worrying about being under water / losing large $$$ in the event of a total loss or accident that results in value loss, having a set residual value with buyout option if car is worth more at end of lease and never being out of warranty. My suggestion is to talk to your CPA to understand tax treatment and read up on lease vs. buy in general (tons of information out there) to make an informed decision based on your specific situation and totality of the lease vs. buy decision.

[visi107]

I asked my CPA this last week and what he suggest to me was that it would likely be easier and better to just take the mileage driven deduction rather than calculate a percentage of the lease payment.

[RickFLM4]

Originally Posted by visi107

I asked my CPA this last week and what he suggest to me was that it would likely be easier and better to just take the mileage driven deduction rather than calculate a percentage of the lease payment.

Still have to track miles either way. :