Quote:
Originally Posted by mikemhg
Can you expound on this in terms of leasing?
I've heard so many arguments about financing vs. leasing. I lease my vehicle myself, but it's not written off for business purposes.
I'm legitimately curious your thoughts on how leasing is a bad idea, financing is preferred?
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How indepth do you want to tallk about tax impact on lease vs buy?
Leasing a car is preferred from a tax-savings point of view since the whole payment can potentially be used to reduce taxable income (up to $800/month). When the car is purchased, only the
interest portion of the loan payment (if any) and the
CCA "depreciation"of the car (valued up to $30,000) can be used to reduce taxes. What i mean is that, if your purchase/financed a car worth more than $30k, the amount exceeding $30k doesn't benefit you for tax purposes. This is where leasing is an advantageous.
When the car is leased, there are more tax deductions, but the trade-off normally is a higher cash outflow. If your business can handle that cash outflow, great, lease it up.