Should i lease my dream car or save money for later?
My dream car is a mercedes benz sl 550. I'm 20 years old almost done with college, started my own business on the internet with my brother and now we investing in a new idea that we think will do well. time will tell. I make really good money with my business. i live with brother whose roommate it was best for business communication. I'm interested in law school but i can already pay for law school a few times over. I never had a car before. Kids usually get a honda as their first car when they're 16. I can actually afford the benz should i buy it or keep investing in business, stocks and keep money in banks and what not. Is it worth leasing a car that's almost $100,000 for a 20 year old guy? i don't know, is it really worth it?
I only use my car for business, but I have not kept a mileage log. How much can I claim as a tax deduction without triggering an audit?
I would be willing to bet you don't only use your car for business. Do you ever drive to the supermarket to buy groceries? Ever drive to the mall to go shopping for yourself? Ever drive to the theatre to watch a movie with friends? If you answered "yes" to any of these questions, you've driven personal miles at some point.The reason why I'm bringing this up is because on your tax return (probably on your Schedule C or Form 4562) you will probably have to report total miles driven, commuting miles driven, and business miles driven. If you try to claim that all your miles driven are business-related, that would definitely catch the attention of most auditors. Also, if an IRS agent were reviewing your return, he would probably look at the type of work you do (by looking at your own description or the NAICS code you have listed on your Schedule C) and see if all that driving makes sense, given your profession.Insofar as how much can you report before it triggers an audit, there is no simple answer - everything depends on context. For example, let's take two taxpayers. One is a single person with no dependents who travels to people's homes to fix their air conditioners. The second person is a single mother with 3 children between the ages of 7 and 12 who drives her own vehicle for her flower delivery service. While it might seem reasonable for the first person to claim 80% of all miles are business-related, it be a lot more difficult claiming that for the second person. Why? Because a reasonable person would imagine that the single parent would have to drive their kids all over (personal non-deductible miles) and do a lot more personal errands than the first person would. So here are the things you should watch out for:1. Too many driving miles given your profession and place of residence. 2. Reported mileage numbers that are too round.
Is leasing a car a bad idea?
I leased a 2012 Honda Civic LX just two weeks ago . My payment is $250 because it includes taxes and license and other fees . These special leases are quite a bargain . They also have a 0.9 % buy at 36 months . However the payments increase to $575 per month . You can also buy the car for 1.9 % for 60 months for a payment of around $350 . I traded my truck for $10,250 but put zero down on the Honda . They wrote me a check for $10,000 and took $250 for the first payment . I also used the money to pay off a credit card that was charging me 16% interest . The lease has a money factor of .000098 that equals 2.35 % .
What is the tax benefit of leasing a car?
When you buy a car you have to pay the sales tax up front; it is often financed along with the cost of the car so it is rolled into your payment. When you lease (in the US states I am familiar with, anyway) you pay sales tax each month on the amount of the lease payment.The lease tax pattern is better for a few reasons:If you total the car and the lease ends, the sales tax payments stop. With a purchase, the sales tax money is gone and you’ll pay the full sales tax, again, on the replacement car (this is the biggest benefit by far)You pay a lot of the tax later - paying later is always betterYou are not paying interest on the sales tax, as you do if you finance the car you bought (however, you do effectively pay tax on the interest in the lease, but this ends up being a lot less than interest on the full tax would be)If you transfer the lease to someone else they’ll assume the future sales tax obligation; when you sell a used car a whole new sales tax is incurred in many placesBy the end of the lease, you’ve only paid sales tax on roughly half the value of the car instead of the whole thing. If you buy it off the lease you’ll pay the rest at that time; if you give it back you won’t pay the rest of the taxThese benefits are a seriously overlooked advantage of leasing. My opinion and the advice I give friends is this: If you are acquiring a new car you should lease it, every time, as long as the interest rate is low, if only because of the first bullet above. If you intend to buy the new car for cash and keep it for “20 years,” then you can buy it off its lease at the end - this doesn’t cost anything extra.
Do you lease/finance/or buyout the car?
my dad said that I should lease my 2019 Civic when I get it, he said he will help with the downpayment. Is leasing good? I do love the idea of owning a car but apparently you don't own it until you paid it in full and the bank owns it I want to drive a new car every few years. My sales agent told me that he had this one customer for 10 years buying a car then trading it in 2 years later, for a newer model of it, and he was losing so much money because if he wants a newer one he could have just leased it. the guy told the sales agent "I want to feel like I own the car", but does it make sense to own the car when you are losing so much money?
Leasing a car or owning?
You can get a tax deduction either way. Leasing is the most expensive way to operate a car. Buy the car, take the deductions as allowed and you will come out far ahead of leasing in the long run. Its best to keep the car for many years. Pay attention to total cost first, tax consequences a distant 2nd. Im not exactly sure how the tax deductions work when you buy. I think you get so much per mile so your total deductions would probably be more. Buy it, maintain it, take the deductions & keep it as long as possible. That's your best bet. With leasing, your insurance cost is going to be lots higher too. Leasing 3 times versus buying one time. Almost nobody should lease. Unless you just have so much money that wasting it doesn't bother you. Go on the tax forum & ask about deducting it. Im not clear on it. If its your personal car, you can take so much per business mile. If its all business, I think you have to depreciate it over so many years and there may be more than one way to do that. (Straight line or declining balance or something, its been a long time) Bottom line is leasing is not a free car. But legit business expenses allow you certain deductions. It might even be best to buy a used car & still take deductions.