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Deducting Lease Costs If you choose to use actual expenses, you can deduct the part of each lease payment that is for the use of the vehicle in your business.

The options depend on whether you use actual costs or the standard deduction for the year. You may deduct business driving costs for a leased car under certain circumstances and within limits.

Finally, a higher value leased vehicle may be subject to what the IRS calls an "inclusion amount," which is a reduction in the deduction for the lease cost.

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