can you write off a new car as a business expense? how about leasing instead?

The basic rule of thumb for tax code is this: you have to be able to defend it with a straight face to the IRS. You needed that car for deliveries for your catering business? Sure. You needed that car for your Web 2.0 startup? Probably not.

It is an interesting question though. I NEED my car to get to and from the office, therefore in theory it would be a business expense. Interesting. I’d like to see some more qualified answers. Great question!

According to IRS publication 463
If you use your car for business purposes, you ordinarily can deduct car expenses. You generally can use one of the two following methods to figure your deductible expenses.

Standard mileage rate.
Actual car expenses

Actual car expenses include: Depreciation, Licenses, Lease payments, Registration fees, Gas, Insurance, Repairs, Oil, Garage rent, Tires, Tolls, and Parking fees

Business and personal use. If you use your car for both business and personal purposes, you must divide your expenses between business and personal use. You can divide your expense based on the miles driven for each purpose.

Example.

You are a sales rep for a company that sells widgets and drive your car 20,000 miles during the year: 12,000 miles for business and 8,000 miles for personal use. You can claim only 60% (12,000 ÷ 20,000) of the cost of operating your car as a business expense.

All of this information can be found on IRS.gov and always consult a CPA to get the maximum amount of deductions your entitled to by the law. The types of deductions and tax strategies can vary depending on the type of legal entity you have your business setup as. Again consult a qualified CPA and or Tax attorney to discuss the options you are legally entitled to under the tax code.

I hope this helps and good luck.
R

Commuting to work isn’t usually considered a business expense unless you own the business—basically, if your company wouldn’t reimburse you for mileage, the IRS won’t let you deduct it. You might get away with it if the number you’re claiming isn’t too absurd. Beyond that, though, to get any tax reduction benefit, you need to itemize deductions to the IRS instead of taking the standard deduction, which means a lot more paperwork and much more hassle at tax time.

This is the sort of thing you need to ask your accountant. If you don’t have an accountant, don’t consider it, because if the IRS thinks you’re cheating them, they will audit you, and without an accountant or tax lawyer, you’re likely to be screwed.

How do I calculate the expenses for my brand new vehicle that is used for personal and business. (80% business and 20% personal). Granted my company does reimburse .48 cents to the mile. I have had expenses to the vehicle such as oil changes and tire upkeep plus I do have a loan that includes interest.

If your company’s reimbursing you for business travel, you probably can’t also count it as a tax deduction. That 48 cents per mile covers maintenance, the cost of operation, and the depreciation; the loan is up to you to take care of.

But if you want a definite answer, talk to a tax accountant.