How to Use Car Lease Payments as a Tax Deduction

Video Transcript

"Do you have your eye on a car that you'd like to lease or buy, I know I do. I went and drove one the other day at the dealership, and they weren't too happy when I didn't take it home with me. But there are some ways that you can actually deduct the lease payment on these cars, to help you with the tax. My name is Kristen Brand, and I'm going to talk to you on, how to deduct a lease payment for business mileage. There are a couple of different ways where you can actually deduct the cost that it cost you to run your car. You can either track your mileage, and do it that way, or you can actually use your actual expenses, whereby, you actually track the cost that you incur to keep your car running everyday. If you use your car for 50 percent business use, you can deduct 50 percent of the lease payment, if you use the car for 20 percent for business use, you can deduct 20 percent of the lease payment. So whatever percentage of your car that's actually used for valid business purposes, meaning going to see clients, or running errands related to work, or things that are not involving your personal life, you can actually use that portion of the lease payment to lower your taxes. You do need to keep track of this information, so it can be documented at the end of the year. But it may get you a little bit closer to getting that sports car, or that SUV that you have your eye on. So that's how to deduct the lease payments on your car, for business use. I'm Kristen Brand, and I hope that you get to go shopping soon."