If you are thinking about leasing a vehicle to use in your business and aren't sure whether buying or leasing is the right decision for you, see our discussion of the lease or buy decision for more information.
If you decide to lease a vehicle for your business, you can generally deduct the lease payments for tax purposes. However, when business use of a leased vehicle is less than 100 percent, the rental deduction is scaled down in proportion to the personal use. For example, if you use a leased car 75 percent for business, you can deduct only 75 percent of the lease payments. You can also deduct vehicle operating expenses you pay for if they are for business use of the leased vehicle. For more information, see our discussion of taxes and your vehicles.