It's time to get your documents together for tax season, but now you have an important question that needs to be answered. It's your first time signing a VW lease. Does it impact your taxes?
At Patrick Volkswagen, we know how stressful tax season can be and we definitely want to make sure that you have all of the info you need heading into it. Here's what you should know about your lease and taxes.
Can I Write Off my Payment?
This is usually at the top of a driver's mind when tax season rolls around. Having more write-offs is always a great thing. If you're a business owner and you're using the car for business, you actually can write off the cost of your payment and some other operating costs.
However, you often can't write off the entire thing. This is because there are going to be times when you're not just using the leased vehicle for business. If you use the car for business only half the time, that could limit how much of the lease payment you would ultimately be able to write off.
SALT Deductions
You should also be aware of the SALT deduction, which allows you to deduct certain local and state taxes when you're filing your return. The tax on your leased vehicle can potentially be deducted on an itemized tax return.
Sometimes this can work out better than taking the standard deduction, but sometimes it won't. There's also a cap on SALT deductions that can change based on federal legislation and rules. You'll definitely want to talk to an accountant if you're trying to capitalize on the SALT deduction because going it alone can be a bit confusing.
If you have more questions for our Volkswagen financial department, visit our website or drop by our Volkswagen dealership serving Worcester, MA. We're ready to answer any questions that you have!