Benefits of leasing a car through your business

 

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Benefits of leasing a car through your business

There can be a variety of tax advantages that are associated with leasing a car through your company; a wide range of car-related and travel-related expenses can also be tax-deductible. Additionally, leases are typically less expensive than traditional car loans and allow a business to update its vehicles more frequently than would be prudent with vehicles purchased outright. If you are looking for some of the benefits of leasing a car through your business, then you have come to the right place at Pfaff Leasing. If your business is located in Vancouver, Calgary, or Toronto, then our Pfaff Leasing against can get you set up with a wide range of vehicles from some of the auto industries hottest and most popular brands. You can experience a variety of benefits when you lease a vehicle through your business, and in this blog by Pfaff Leasing, we share some information about some of those benefits! 

When you talk about the advantages of leasing a car through your business, you will be referring to the tax advantages. Some of those tax advantages can include:

Eligible deductions for your car lease 

The payments, interest, tax, upkeep, and maintenance of a car leased through a company can be tax-deductible. This includes oil changes, inspections, new brakes, and tires. It also includes related expenses such as parking fees and vehicle registration costs. The cost of gas for a company-leased can also be deductible. Your Pfaff Leasing agent can sit down with you and discuss with you how you can take advantage of your car lease when it is tax season.

Deduction exceptions for your car lease 

You cannot use the standard kilometer rate tax deduction if the company vehicle is used for hires, such as a taxi or limo service or if the vehicle is part of fleet operations, defined as five or more vehicles. In this instance, you can deduct actual car-related expenses by saving and tallying receipts for vehicle-related expenses. Additionally, you cannot deduct the cost of fines paid for parking or traffic violations accrued on a company-leased vehicle. If this is a type of business that you operate, then maybe leasing is not as good of an idea. It all depends on what type of business you are operating and what your goals are.

Tracking your eligible tax deduction for your car lease 

To qualify for a tax deduction, you must keep detailed records for costs associated with a company-leased vehicle. This includes mileage logs, receipts for gas, oil, upkeep, and general maintenance. If you lease a vehicle through your company and occasionally use it for personal as well as business purposes, you must categorize the expenses you are deducting from your taxes with a percentage applied to personal and business use.

Business and personal travel with your car lease 

In order to be considered a business expense, a car leased through your company must be used entirely for business purposes. If you are an independent contractor or sole proprietor, you may be asked to verify the legitimacy of your company-leased vehicle deduction by demonstrating that you have another vehicle in your own name for personal use.

At Pfaff Leasing, we don’t claim to be tax experts. However, when it comes to business leasing, we know a thing or two about the benefits it can provide our clients. If you are looking for more information about the benefits of leasing a car through your business, then we encourage you to get in touch with a Pfaff Leasing agent in Vancouver, Calgary, or Toronto today.

Click here to find our contact information or to speak with a representative.