Hi,
I own an S-corp and I am in the market to obtain a new vehicle for 100% work related use under my corporation name. For tax purposes, would it make sense to lease this vehicle or just purchase it? About 10-15k a year in mileage. Also, is it still advantagous to obtain a avehicle over 6000 gross weight or did they close that loop hole? This is in California, if it matters.
Regards...
wrote
You really shouldn't make decisions strictly on the tax implications. You should take a realistic look at the costs to operate both vehicles over the time frame in which you plan to keep them. All things being equal, the lowest net cost to you is where you should be looking. Leases have their own set of financial factors (like tack-on costs in the end) that a purchase doesn't carry.
One other thing to consider, is to buy the vehicle in yoru personal name and reimburse yourself from the company at the mileage rate. Generally the insurance and taxes (ad valorem) are cheaper for a personal vehicle than a company vehicle. Talk to your insurance company.
There can be tax advantages (taking Section 179) on a heavy vehicle, but those have been limited somewhat for SUV's.
Ber in mind a couple of hurricanes/unrest in the middle east/the summer driving season/a couple of terrorist attacks and you could easily see $5.00 a gallon gas in the United States.
"Dr. Woodard" wrote
Remember that the issue is not what type of vehicle he gets - it's if he buys or leases it. That question is irrelevant of the fuel price, which would remain constant for any given vehicle (leased -v- purchased). The vehicle he gets needs to be one that suits his needs. The decision to buy or lease needs to come down to economics. Which method will generate the least expenses (cash out of pocket) in the long run (that being the time he intends to keep that vehicle).
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