Posts by placidhawk12

Writing above:
...all expenses can be 100% tax-deductible if they are used to determine income.
The trick here is that the legislature hasn't actually set any rules on how much income needs to be reported or exactly how much a car has to be driven for business versus personal use to qualify for those full deductions.
So, here’s the play: you lease a car to an employee by executive order—say, you let Google use a company vehicle for personal trips—and then you just report that benefit as part of their salary. You pay all the standard payroll taxes and withholdings on that amount, and

Since you’ve officially established income based on that vehicle, every single cent of the expense becomes tax-deductible. There’s no disallowed sales tax, and you don't get hit with that massive 30%+ corporate tax bill.

Basically, you lease a car for a week, a day, or a month—doesn't matter—and from then on, you claim 100% of the costs forever.

Get it? Once the payroll taxes have been calculated based on that car once (regardless of how long it lasted or how small the amount was), it immediately moves into the category where 100% of the expenses are deductible. That's what I'm talking about. A director's memo for personal use is all you need. As soon as those taxes are processed based on the use of that vehicle, you can justify 100% of the costs indefinitely.

Yeah, that’s exactly how the contributions are calculated.

But here’s the kicker: the law doesn't actually specify how much you have to use the car (during the window where those contributions are being paid) to justify claiming 100% of the associated costs.

So, you rent a car for an employee for a single week, calculate the contributions using the method shown above, and then claim the full expenses for the entire duration.

Legally speaking, that's how it works. It's just a convenient little loophole waiting to be exploited. The IRS might have a different opinion, but you'd need a damn good reason to fight it. Or am I wrong here?

Charles Ramos7 said:Where are you getting that nonsense?
You have to use 20% of the lease payment as the base for calculating those taxes.

Fine, I’ll respect your opinion. But those "nonsense" claims came straight from the PayPal forums.

Regardless of whether I use 20% as the base—which, by the way, I’d love to know the logic behind if I were just renting a car for a single day—it’s still 100% deductible.

Do me a favor and actually explain yourself if it isn't too much trouble. Thanks in advance.

Let me bump this thread back up for a second...

A few days ago, my company pulled the trigger on a finance lease for a new vehicle.
The total price including sales tax came to $69850. We had to put down a 30% down payment, and the lease term is set for one year, plain and simple.

The company received an invoice for the deposit and the first installment, which had to be paid together, totaling $26375. That includes $89 in sales tax, which I’m going to write off immediately...

Now, there's something else I'm wondering about (sorry, I haven't asked anyone yet, so it's been bugging me, so I figured I'd ask here—someone surely knows the deal...).

Am I going to get one single massive invoice for the whole car (minus the deposit), or will I receive individual invoices for every single monthly payment showing the sales tax, interest, and the tax on that interest?

Also, I've got another question. I was digging around online and found this:
Basically, the law states that all expenses for passenger vehicles are 100% tax-deductible if they are used to generate income.
The trick is that the legislature hasn't actually specified how much income needs to be generated or exactly how much the car needs to be driven for business versus personal use to qualify for that 100% deduction.
So, you lease a car to an employee via a management decision (for example, Goldman Sachs approves an executive to use a company car for personal use from April 15th to April 17th for route X covering Y miles). You take that mileage and multiply it by $0.67 (that $2 figure includes sales tax, so you have to strip it out rather than add it) and then report that amount to them as taxable income. Essentially, you pay all the standard payroll taxes and withholdings based on
.
Once you've established that income tied to the vehicle, all the costs become fully deductible. No disallowed sales tax, no extra corporate income tax on top of the 30%+ margin.

It's a neat little loophole in the tax code.
I've double-checked this with several sources—auditors, tax consultants, and even some pretty decent IRS agents.

So, from what I gather, I just lease the car to the director, treat it as supplemental income, pay the required payroll taxes on that amount, and call it a day. From there, you just keep running the expenses through.

So, here’s the deal: I’m getting some money moved into my account based on an agreement with my company. It’s set up as an employee loan. We’ve got the interest rate pegged at 6% annually per the regulations—the legal minimum is actually 4%, but the company is paying a 6% tax rate on this.

The total loan amount is $56667. Since the company has to cover the annual tax on that interest, I’m only going to be paying back that specific portion for now (don't worry, I'll pay back the full principal eventually).

This is all stuff from way back in school, so I'm just asking out of curiosity: how much tax is the company actually going to be stuck paying?