What are the tax benefits of buying a car through my business?
Opinions expressed by Entrepreneur contributors are their own.
I own a small retail bead store and am considering purchasing or leasing a vehicle. The car would be used for both professional and personal reasons.Generally speaking, if you intend to use a vehicle only for business purposes, then it would make a lot of sense to purchase or lease the vehicle with the company's funds.
If you intend to use the vehicle for both personal and business purposes, you could still expense the cost but you would only be allowed to expense the portion associated with business use. The IRS makes it very clear that you cannot expense vehicle-related costs for a business if the vehicle is for personal purposes.
Given the nature of your business, I would not recommend purchasing the vehicle through the business. If you rarely use a vehicle for business purposes you would not qualify for the business deductions.
Good luck with the retail bead business and please let us know if you have any other tax questions.