lease rates lowered?

[pete8314]

Here is a link to the thread with the spreadsheet I mentioned earlier (sorry for the delay in getting it up!):
TCO Lease vs Loan Cost Spreadsheet

And, FYI, as mentioned in the thread, the reason the website rates were higher than what I was quoted was because I had a $1,000 referral discount, and that had a different effect on the payments then simply setting the price to be a $1,000 less. When I removed the discount, the spreadsheet, what I was quoted previously, and the Tesla website all agree...

Thanks....for some reason, when I d/l it to Excel, Excel never manages to open it. Almost certainly my PC, but I've tried on two PCs now.

(edit) OK, so I emailed it to myself, then saved it to my desktop.....then it opened. Just posting in case anyone else has issues (Windows 10/Excel2016)

 

[pete8314]

A few more questions....just looking for advice, I know I can talk to my CPA, but she's really just a tax processor, not good for advice.

On the basis I've decided to go with a lease (which I know in TX isn't quite so great, since sales tax is paid on the total value of the car), are there additional benefits to leasing through my business, as opposed to personally? My business is just a Sole Prop, and the miles on the car are, at best, 20% business. I've previously tried to make the argument that the car is a tool of the business, since the business couldn't really function without it, but apparently that doesn't fly

 

[MsElectric]

A few more questions....just looking for advice, I know I can talk to my CPA, but she's really just a tax processor, not good for advice.

On the basis I've decided to go with a lease (which I know in TX isn't quite so great, since sales tax is paid on the total value of the car), are there additional benefits to leasing through my business, as opposed to personally? My business is just a Sole Prop, and the miles on the car are, at best, 20% business. I've previously tried to make the argument that the car is a tool of the business, since the business couldn't really function without it, but apparently that doesn't fly

Not a CPA but the biggest benefit in business leasing is you get to write off depreciation which is significantly greater than the mileage deduction in most cases.

 

[brkaus]

Not a CPA but the biggest benefit in business leasing is you get to write off depreciation which is significantly greater than the mileage deduction in most cases.

In Texas, watch out for the car to be adding value to your business property which would be taxed annually.

 

[MsElectric]

In Texas, watch out for the car to be adding value to your business property which would be taxed annually.

But in Texas do you pay sales tax on the entire value of the car when you lease?

 

[pete8314]

But in Texas do you pay sales tax on the entire value of the car when you lease?

Yep :-/

 

[ABCCBA]

MsElectric - I am not a CPA, so seek professional assistance to confirm my statements.

As a Sole Proprietor, I am assuming that you are not a 'C' corp, 'S' corp or LLC and file your business expenses on your Schedule C of the 1040 form?

1. The IRS requires that you keep a detailed log of all mileage driven on a vehicle, both personal and business, in order to determine the actual percentage of business use and mileage driven.
2. The log book (available at OD or Staples) has the Year beginning mileage, Year ending mileage and then you must enter each daily trips information: Begin Mileage, End Mileage and Purpose as well as personal or business
3. Leases DO NOT depreciate, as you do not own the vehicle. You simply write the amount of the lease payment off (plus tax) as a Vehicle Expense. In your case, if your log book determines you used the vehcile at 20% busines, than 20% of the lease payment is a business expense.
4. Any maintenance expenses, tolls, parking, etc. are also deductible. You must journalize all expenses and keep receipts for any expenses over $25. If these are journalized as business related expenses, then they are 100% expensed, not 20%. Tires would be 20% deductible.
5. If you BUY a car, then the car is amortised and depreciated. I won't get into those details, as it is more complicated.

Needless to say, the reason why most businesses LEASE vehicles is because the lease payment is treated as an immediate business expense for that year and there is not amortization or depreciation to worry about.

Hope that helps. Feel free to ask other questions.

Not a CPA but the biggest benefit in business leasing is you get to write off depreciation which is significantly greater than the mileage deduction in most cases.

 

[pete8314]

Thanks, interesting, that helps. And yes, sole prop via the 1040. Considering the llc, but for now I don't really see many advantages, and it makes taxes more complicated.

So basically, with a lease, x% of all related costs are treated as a deductible for the year, where x=the % of business miles compared to personal. With a purchase (via a partial loan), there's no deduction opportunities, aside from the IRS mileage rates?

 

[ABCCBA]

Pete,

1. A sole proprietorship leaves you personally liable for any legal/financial issues with your business. A 'C', 'S' or 'LLC' are legal entities and separate you personally from the business. It is well worth the $150 to setup a corporation or LLC.

2. When you purchase a vehicle in the business name, there are many deductions and options. First, you choose either standard mileage deduction OR actual expenses. If you chose standard mileage, then NO, you can't write off tires, maintenance, etc.

3. Then, the purchase amount is amortized over five years, regardless of the time that you finance the vehicle. There is a depreciation schedule that the IRS provides, but, it provides a certain percentage that you can write off each year. It is not a straight line 20% per year, so in the first two years you actually write off less than what you actually spend. Again - seek professional accounting advice on this one.

4. I have found that if one of my vehciles will be driven low mileage, then a lease is best for my business as it is a direct expense. I only purchase a vehicle if I know I am going to exceed standard lease mileage by a great amount or we are going to keep the vehicle for a period of time 5 years or more.

Thanks, interesting, that helps. And yes, sole prop via the 1040. Considering the llc, but for now I don't really see many advantages, and it makes taxes more complicated.

So basically, with a lease, x% of all related costs are treated as a deductible for the year, where x=the % of business miles compared to personal. With a purchase (via a partial loan), there's no deduction opportunities, aside from the IRS mileage rates?