Semi Truck Leasing and Tax Benefits

Row of US Trucks - Semi Truck Financing

What is it that first comes to your mind when you think about a brand new semi truck? Do you think of all the vast business possibilities and ways to make your passion for trucking profitable or do you think about the financial barriers that seem so hard to overcome?

Many future owner-operators tend to look away when they read the term leasing and miss out on all the benefits it can bring. We’ve already touched upon what some of them are in one of our previous articles, but today we’d like to expand on the topic of the tax benefits that come with this type of semi truck financing.

Types of Lease and Tax Benefits

If you’ve ever filed taxes, you know that calculating your tax benefits is not that simple, which is why we want to guide you through the process as it relates to semi truck leasing. As you already know, there are two types of semi truck leases: operating and capital lease. The differences between the two wary in many aspects, including filing for taxes and how it could affect your business.

The operating lease allows you to use a semi truck for a certain time period. What’s important here is that you aren’t held responsible for any ownership aspects apart from those connected to the use of the truck. This determines how this type of lease affects your taxes. When filing for taxes you will be deducting the operating lease payments. This makes this type of lease extremely beneficial in tax terms.

Capital lease is in many ways similar to its operating counterpart. You are allowed to use a semi truck for a certain period. On the other hand, unlike with the operating lease you are partially responsible for some risks and benefits associated with owning. This makes the lease a liability and the truck an asset. When filing for taxes, the interest paid on the lease is deducted and the truck’s value deprecated for the duration of the lease.

How to Choose?

Now that you know what kind of benefits and risks each type carries with it, you can make the best decision for your company. Before you reach the decision, there are some other factors you have to consider.

As we already discussed, leasing has other benefits that are not tax related. Through leasing you are more flexible which is very important in today’s constantly shifting economy. Owning a semi truck or a piece of equipment binds you to it, which can be very frustrating with regulations constantly changing. Leasing allows you to adapt to all the current and future trends.

Of course, not every semi truck financing option benefits every owner the same. This decision often depends on your current position. Small trucking companies choose leasing as it not only has numerous tax benefits, it removes the inherit risks of ownership. This is why you have to take a good look at your profitability and future goals and choose the option that will benefit your business the most.

The details regarding tax benefits are prone to change, which is why it’s very important to have a reliable semi truck financing company behind you. Go Truck Capital can offer expert advice on which financing option is best for your situation. We are a respectable company that offers a wide variety of bad credit semi truck financing options. If you have any questions about our leasing programs feel free to contact us at (855) 396-3600.

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