Quote:
Originally Posted by Infosec
This is not the thread to discuss buy vs lease. There are 100's of threads on the topic.
If you own the business then the lease is no brainer.
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Be careful when you make those statements as the lease is not always better for the business. I haven't read the 100's threads on buy vs lease, but that information is incorrect. Lease in many scenarios is a pretty bad financial decision, but is preferred by dealerships as generates new business every three years, plus additional fees in wear and tear. I consider the main reason for the lease the ability to get a new car every few years paying less per month than financing. The catch is that the lease you keep paying, lease payments go forever, while the financing you can stop after a few years, plus you keep an asset with some value.
Lease is an expense for the business - Example: $1,000 lease a month, is $1,000 deduction, so $12,000 a year deduction.
If you buy a car, depending on the car, you can depreciate up to $18,100 the first year in 2019. If you buy for example an SUV or truck over a certain weight, you could deduct the whole price, for example $80,000 (Section 179).
Especially with the Tax Cuts and Jobs Act of 2017, you can get an additional 20% deduction (199A) if your income is under a certain threshold, after that you get it partially, and then, nothing (phase out).
Imagine someone that is in the phase out (no 20% deduction), going to be able to save the 20% 199A deduction, plus whatever the income tax bracket due to buying an SUV and fully depreciating it.
If you are a business owner, talk to your CPA or Enrolled Agent (EA) or any other professional before the end of the year. A little of tax planning can go a long way (just friendly advice).