From a tax/ money savings standpoint, is it better to lease or finance a car through your business? I have an LLC, operating as an Scorp for IRS purposes. I want to get a car but I want to know what would be better for me? I hear people saying leasing is good. I just want to save the most money. I don't wish to keep the car for more than 2 years.
Is it better to lease or finance a car through a business?
If you only plan to keep the car for two years you are better off with a lease.
The primary advantage is that your costs are predictable and the leasing organization is bearing the risks if resale values drop. In addition the total lease expense is deductible while if you purchase only business mileage is deductible at whatever the current IRS rate is.
One thing to watch out for -- make sure that you don't exceed the mileage allowed for in the lease. A former employer of mine did and wound up with a $6,000 bill for excess mileage (well, he did lease a Mercedes) at the end of the lease period.
Hope this helps
Jerry-the-bookkeeper
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