How to Write off a Car Lease for Your Business

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When you lease a car for business purposes, you may be able to deduct a portion of your lease expenses when filing your taxes. At AutoFlex Leasing, we understand the importance of maximizing deductions while maintaining financial flexibility. This guide will walk you through how to write off a car lease for your business and what you need to know to stay compliant.

Is Your Leased Car Eligible for a Tax Write-Off?

The IRS allows business car leasing expenses to be deducted if the vehicle is used primarily for business-related activities. To qualify:

  • The car must be used primarily for business-related activities (driving to client meetings, deliveries, business errands, etc.).
  • You should maintain accurate records of business-related mileage and expenses.

How to Deduct Your Car Lease Payments

When you lease a car for business, there are two ways to deduct your expenses:

  1. Standard Mileage Deduction
    • For 2025, the IRS standard mileage rate is 70 cents per mile for business use (updated annually).
    • Multiply the business miles driven by the mileage rate to calculate your deduction.
  2. Actual Expense Method
    • Deduct a percentage of your lease payments based on business vs. personal use.
    • Eligible expenses include lease payments, fuel, maintenance, insurance, and registration fees.

IRS Lease Inclusion Rule

If your leased car’s fair market value is above a certain threshold, the IRS requires a lease inclusion amount to account for buyers’ depreciation benefits. Be sure to check IRS guidelines to see if this applies to your lease.

Maximizing Your Write-Off

  • Keep detailed mileage logs using an app or a mileage tracker.
  • Save receipts for fuel, repairs, and maintenance to justify deductions.
  • Consult a tax professional to ensure compliance with IRS regulations.

Drive Smarter with AutoFlex Leasing

Leasing a vehicle for business can provide financial flexibility and tax advantages when managed correctly. At Autoflex Leasing, we make car leasing easy by fitting your company’s needs while helping you keep costs in check.Ready to explore business lease options? Contact us today to find the perfect car lease deals in Dallas for your company!