BUY vs. LEASE question..................................... (agent, square footage, percentage, standard)
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Assuming your lease payment is $1000, and you work part time (20 hours a week) as a contractor agent, how much of the lease payment can you deduct at tax time?
I thought that if you drove 100 miles a week and 50 miles of that was for real estate related activities, you could deduct $500 in the scenario above....regardless of how many hours you worked as an agent.
Are you talking about a home office? You do percentages based on square footage. So if you use a 10x10 office space in your apartment, and the apartment is 1,000 sq feet, then you could potentially deduct $100 of that $1000. If you drive 100 miles a week and 50 was for real estate activity that has nothing to do with your lease payment. You can take the mileage credit that the IRS has or you can do depreciation, repairs, etc on your car.
Are you talking about a home office? You do percentages based on square footage. So if you use a 10x10 office space in your apartment, and the apartment is 1,000 sq feet, then you could potentially deduct $100 of that $1000. If you drive 100 miles a week and 50 was for real estate activity that has nothing to do with your lease payment. You can take the mileage credit that the IRS has or you can do depreciation, repairs, etc on your car.
Payment amount does not apply. You can deduct 57.5 cents per mile for business miles driven in 2015.
I'm not sure that's correct based on my limited online research....
if so, what's the difference between leasing and buying, if in either case, you can only deduct 57.5 center per mile for business miles driven?
I'm not sure that's correct based on my limited online research....
if so, what's the difference between leasing and buying, if in either case, you can only deduct 57.5 center per mile for business miles driven?
thanks.
You can take the IRS standard deduction for vehicle use (mileage rate) or you can use the depreciation and expenses method (actual costs). From an IRS perspective, there is no difference between leasing and owning. You would still do either the mileage rate or actual costs method.
You can take the IRS standard deduction for vehicle use (mileage rate) or you can use the depreciation and expenses method (actual costs). From an IRS perspective, there is no difference between leasing and owning. You would still do either the mileage rate or actual costs method.
Yes, exactly....so payment amount does matter, if you decide to go the actual route.
I'm not sure that's correct based on my limited online research....
if so, what's the difference between leasing and buying, if in either case, you can only deduct 57.5 center per mile for business miles driven?
thanks.
I stand corrected. Looks like, in the example used, the business portion of the lease payment and expenses would be a substantially bigger deduction than mileage. Thanks for educating me.
you still have to keep track of mileage and calculate the percentage of miles driven that are business related vs. personal. It's not based on hours. If 2/3 of your miles are personal use, then you only get to deduct 1/3 even if you are using actual expenses rather than mileage.
Also, I think there is a limit of what you can deduct for a luxury car, so you may not get to deduct off the full $1000 each month. You'd have to double check on that.
Also, I think there is a limit of what you can deduct for a luxury car, so you may not get to deduct off the full $1000 each month. You'd have to double check on that.
You are correct, this is done through an increase to gross income to offset the excess deduction the lease payments represent over the allowed depreciation. Rev. Proc. 2015-19 explains it for cars placed in service during 2015
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