How do I calculate interest paid on a leased vehicle that I use for my business?

[MinhT · Accepted solution]

If you lease a car (instead of having a loan on the car), there is no interest part in the lease amounts that you pay.

If you use the car exclusively for business, you can deduct the full lease payments as a business expense.

[KatDesign]

I read that interest is included in the lease payments.

[MinhT]

There is an interest component which is used by the leasing companies for the pricing of leases. That interest component is not disclosed to the client. For tax purposes, you can be deduct the business portion of the lease payments as a business expense.

[spamdavy]

The interest component of a lease is the money factor multiplied by 2400. Money factor can be found on the lease agreement.

With this knowledge, can I deduct the interest paid on 2018 on my next tax return?

[SweetieJean]

No, as it is already included n the lease payment