Sporty Leasing vehicle options

[z31maniac]

Loop holes.....I love it! I'll look into that.

I'd imagine there is a clause about how many kids you have vs the capacity of an emergency vehicle.

In other words, if she watches 5 kids, that could be hard to justify a BRZ.

[IronFreak]

I don't know anything about US Tax laws, but I am sure they are somewhat similar to ours, up here in the hat.
Up here, the vehicle must be being used for buisness use to be eligible for tax breaks.

My wife writes off her car every year, because she is required to have a vehicle for her employment. She gets mileage payed to her to cover this, but, since she pays tax on that income it allows her to write of the car, and it's expenses. On a new car purchase, we can write off a 30k vehicle at a rate of 15% the first year, 30% of the depreciated asset the second year, and 15% for he next 3 years (on the depreciated asset value). But.... Once you have depreciated he asset down that low, you must watch what you sell it for, because if you sell it for more then the depreciated value on your taxes, you pay capital gains tax on the profit.

Check into your daycare laws, because the daycare my son goes to writes off one large van because they are required to have an emergency type vehicle........just in case.

Loop holes.....I love it! I'll look into that.

[Todd Black 88]

On a lease, we can write off up to $600 per month, and 30k on the buy out, but you only get the dollar value of your tax bracket. Ie: If your in a 50% tax bracket, you get $300 back.

[ajhostetter]

Well this thread just got lame. That said, talk the accountant. If you can justify it, I'd look at Audis. They're awesome...when you don't own them.

[Todd Black 88]

I don't know anything about US Tax laws, but I am sure they are somewhat similar to ours, up here in the hat.
Up here, the vehicle must be being used for buisness use to be eligible for tax breaks.

My wife writes off her car every year, because she is required to have a vehicle for her employment. She gets mileage payed to her to cover this, but, since she pays tax on that income it allows her to write of the car, and it's expenses. On a new car purchase, we can write off a 30k vehicle at a rate of 15% the first year, 30% of the depreciated asset the second year, and 15% for he next 3 years (on the depreciated asset value). But.... Once you have depreciated he asset down that low, you must watch what you sell it for, because if you sell it for more then the depreciated value on your taxes, you pay capital gains tax on the profit.

Check into your daycare laws, because the daycare my son goes to writes off one large van because they are required to have an emergency type vehicle........just in case.

[IronFreak]

I would lease for a self-employed gig like being an architect, or being a real estate agent, or other work where you dress (and drive) to make a certain definite impression on clients. But not sure about day care.

If it's to commute, then it is almost certainly not a tax write-off: not for mileage, not for lease and other car expenses.

In the end, if you are doing well financially, and she says she wants a more sporty ride, then that sentiment will overrule just about every other justification or argument for or against. Logic and rational thought tend to go right out the window in the face of "I want a new ride."

If it is just about saving money, then even swapping out for a newer, higher mpg car doesn't always make sense. You have to do the math on whether the lower gas costs will offset higher car payments and full coverage insurance.

Valid points. I personally like the Saturn for my commute (I use it now that shes home all day). I also have a truck, but the mileage blows. Maybe I just upgrade her to something I can pay cash for. There are plenty of vehicles that will appease her wants that aren't $30k.

[wikkid]

I would lease for a self-employed gig like being an architect, or being a real estate agent, or other work where you dress (and drive) to make a certain definite impression on clients. But not sure about day care.

If it's to commute, then it is almost certainly not a tax write-off: not for mileage, not for lease and other car expenses.

In the end, if you are doing well financially, and she says she wants a more sporty ride, then that sentiment will overrule just about every other justification or argument for or against. Logic and rational thought tend to go right out the window in the face of "I want a new ride."

If it is just about saving money, then even swapping out for a newer, higher mpg car doesn't always make sense. You have to do the math on whether the lower gas costs will offset higher car payments and full coverage insurance.

[IronFreak]

Either they don't know it's illegal, or they don't care. Again, it's all about what you are willing to risk.


Now, if you aren't yet, you should definitely be able to write off a portion of the mortgage/insurance/taxes/utilities because she is running the business out of your home, I assume?

Correct, and I plan on doing that, I also spent a large amount of money this year remodeling the entire basement for her. I know that it's not all eligible for write-offs, but I understand that I can prorate that expense over a few years. Basically I can wrtie-off sq.ft of any room used for the daycare and the other items you listed along with supplies (food, crafts ect.)

Like I said I was going to meet with the accountant first, see were we land, maybe it doesn't make sense at all......but I like to dream!

[z31maniac]

Either they don't know it's illegal, or they don't care. Again, it's all about what you are willing to risk. We aren't willing to risk her livelihood over a few thousand dollars in taxes.


Now, if you aren't yet, you should definitely be able to write off a portion of the mortgage/insurance/taxes/utilities because she is running the business out of your home, I assume?

[IronFreak]

Does she pick up the kids and then take them home? I'm guessing not since you're asking about sporty.

Other than that, the only real mileage she could "legally" write-off is when she drives to go get supplies for the day care. Let's say she does that once a week, writing off 120 miles a month at 55 cents a mile, doesn't really justify a lease.

Also, keep in mind, just putting a sticker on the car with:

"IronFreak baby sitting services
Call 555-867-5309"

Doesn't make it a commercial vehicle either. Do people do it? Yes. Do you want to be the one talking to the IRS auditor? Maybe, I know I don't.

*My wife has been self-employed for 10 years and we've had all these discussions with her accountant*

Wow, I guess this isn't as easy as thought. I wasn't planning on doing it until I had a discussion with my accountant but at least I can ask the right questions now. I have a few friends that own businesses and do the sign thing, either they don't know its illegal or they do, and aren't telling me.

Thanks for the input I'll continue to do more research before car shopping.

^^^ this guy makes good points, double check with tax guy for sure.

No doubt.

[graveshaker]

^^^ this guy makes good points, double check with tax guy for sure.

[z31maniac]

She owns a daycare. I will look at the difference between the two but I figured the the lease write-off would be higher then mileage as she'd probably use it daily but not for a high mileage purpose.

Does she pick up the kids and then take them home? I'm guessing not since you're asking about sporty.

Other than that, the only real mileage she could "legally" write-off is when she drives to go get supplies for the day care. Let's say she does that once a week, writing off 120 miles a month at 55 cents a mile, doesn't really justify a lease.

Also, keep in mind, just putting a sticker on the car with:

"IronFreak baby sitting services
Call 555-867-5309"

Doesn't make it a commercial vehicle either. Do people do it? Yes. Do you want to be the one talking to the IRS auditor? Maybe, I know I don't.

*My wife has been self-employed for 10 years and we've had all these discussions with her accountant*

[IronFreak]

I just picked up a lease on a base line 2014 WRX. $299/mnth with 12k miles over 42 months I think. Somewhere around $16k buyout at the end.

That's not bad, AWD would be nice for our winters.

[IronFreak]

What does she do?

Just because she is self-employed doesn't automatically mean she can write off her vehicle.

You'll also want to do the math on writing off the vehicle vs taking mileage.

She owns a daycare. I will look at the difference between the two but I figured the the lease write-off would be higher then mileage as she'd probably use it daily but not for a high mileage purpose.

[Nygdup]

I just picked up a lease on a base line 2014 WRX. $299/mnth with 12k miles over 42 months I think. Somewhere around $16k buyout at the end.