Barrington, IL asked in Business Law and Tax Law for Wisconsin

Q: If I lease a vehicle for business use, how do I calculate percent business use vs percent personal use for tax purposes.

I want to know if in leasing a vehicle for Uber I can deduct roughly, say 80 percent (percentage of business use), of monthly payments minus the inclusion on my year end taxes.

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1 Lawyer Answer
Matthew M Montoya
Matthew M Montoya
  • Tax Law Lawyer
  • Lone Tree, CO

A: The rules are a bit different depending on whether your business is a Sole Proprietorship (Schedule C), a C-corporation, or S-Corporation. If you're like most taxpayers, you're probably using a Schedule C to report this to the IRS. In claiming business use of a vehicle, strict rules must be followed. Many taxpayers lose significant amounts of their deduction in an audit because they didn't properly document their business usage.

The IRS publishes a number of guides to provide the information you are seeking. In particular, IRS Tax Topic 510 and IRS Publication 463 will be helpful to you. For Publication 463, pay special attention to the recordkeeping section as well as the leasing a vehicle section.

If you still have questions, feel free to contact me and we can discuss a reasonable fee for reviewing and advising you on your specific factual situation as well as clarifying any remaining tax questions you have.

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