If you are thinking about leasing a vehicle to use in your business and aren't sure whether buying or leasing is the right decision for you, see our discussion of the lease or buy decision for more information.
If you lease a vehicle for your business, you can generally deduct
the lease payments as a rental expense on your taxes. However, when business
use of a leased vehicle is less than 100 percent, the rental deduction is scaled
down in proportion to the personal use. For example, if you use a leased car 75
percent for business, you can deduct only 75 percent of the lease payments. You
can also deduct vehicle operating expenses you pay for if they are for business
use of the leased vehicle. For more information, see our discussion of taxes
and your vehicles.