Tax Benefits of Leasing a Cadillac Vehicle

Is it time for a new car? If so, have you considered a lease for your next vehicle? With a Cadillac lease, you may be eligible for certain tax benefits and write-offs. Learn about the possible tax advantages and savings.

Tax Deductions

The amount you can deduct on a car lease depends on the primary purpose of your vehicle. Typically, you qualify for a higher deduction if you use your car for business rather than personal use. Most owners use their personal car for both business and everyday commuting. Speak with an accountant to determine the deductions you qualify for based on the ratio of business to personal use.

You can use one of two deduction methods to calculate your eligible deductions: actual cost and standard mileage.

Actual Cost

Under the actual cost method, you deduct based on the expense of your leased vehicle. This includes the accumulated cost of the lease payment, fuel, insurance, and maintenance. Keep documentation of the expenses.

Standard Mileage Rate

If you use the standard mileage rate, you’re eligible for a flat-rate deduction for every mile driven for business purposes. Daily commuting to work counts as a personal use and NOT a business use. Use the standard mileage method if you anticipate driving a lot for business trips and excursions. This method is also easier to calculate because it requires less number tallying.

Come by Zeigler Cadillac of Lincolnwood to see our inventory. Vehicles like the Cadillac XT5 and other models are available for both purchase and lease. With the lease of a new vehicle comes tax incentives you may be able to capitalize on. You’ll have to consult with your accountant to determine what deductions you qualify for.