Financing and or leasing new car this year 2023

[modern27]

Hello,

My husband and I are in the process of possibly leasing or financing a new vehicle under our llc for business purposes this year 2023. We're weighing the options which option is better and if is beneficial for our company. In terms of taxes what type of credits is available if we lease the vehicle or if is financed?

Also for tax purposes which option would be best? this vehicle will only be used for our real estate business.

Thanks in advance! 

Denise

[JBedford]

Hi, @modern27 , thanks for the question! There is no easy answer, as there are many factors to consider. If you purchase the vehicle, you may be able to claim a deduction for depreciation. And in some cases, a Section 179 deduction may enable you to deduct the full cost in the year or purchase. Interest and financing expenses may also be deductible.

On the other hand, lease payments are generally deductible if you lease. Additionally, there may be other non-tax considerations that you should weigh. You may also find this TurboTax article helpful, as it goes into some detail. 

Hope this helps, please let me know if this raises additional questions!