Inclusion Amount

If you’ve ever leased a car at least partially for work, you might have heard of the inclusion amount. If you leased the car entirely for work, you can take advantage of tax deductions. If the car was partially for work, you can deduct the work-time part.

The inclusion amount makes that car lease deduction a little less. It depends on the car (or truck) type leased, how much it was to lease, how many days it was leased for, and what percentage of the time it was used for business. The inclusion amount isn’t a big amount, but it does decrease the size of the lease deduction, and is required by the IRS (they have a whole table and everything).

Once you find your inclusion amount on the table, that’s the additional income you must report as a result of the lease. The IRS doesn’t want you to be able to claim the amount that would be deductible as depreciation if you owned it. That’s reserved for car owners, not car leasers.