I need help understanding lease write off and how it will affects my tax return.

Example: I earn $50,000 per yr in my career and have a small business (sole proprietorship) that I earn $2,000 per yr. If I lease a vehicle under my business that costs me $1000 per month I understand I can write off that expense. Therefore my taxable income is reduced to $40,000. Given this basic example approximately how much tax would I get back (or what I really want to know is what is the “real” cost to me for the leased vehicle)

Thank you!

Scottish2008

For example
If you make $50,000 / 12 m you make a month
out of the $4,166.67 the government takes $1,100.00 for taxes
Take the $10,000 for the expense and divide it into how much you make a month $4166.67
which then gives you 2.39 that's is how many months you loss from that $10,000
take the 2.39(months you loss) and multiply it into the tax the Government toke from you a month #1,100.00 = $2,629.00
That is what you are expected to get back
You only will get the money from the taxes you paid into that year.
I hope this helped you out. That's what my wife's accountant explained to us for her small business. In a simpler aspect.

AtlantaTaxExpert

That sounds about right.

Scottish2008

Also keep in mind that when you are leasing a vehicle you can claim more out of it as well. I am no expert but it would be a good idea to get an accountant to do it for you as well you can claim the cost from your accountant next year on your tax. Having an accountant well maximize your return. But it would be a good idea to find one with years of experience. Best of luck with it.

AtlantaTaxExpert

Noted!

mommieof2

Do you have to claim a foreign pension that you receive in the US as income?

MukatA

Yes, you must declare your world wide income.