Can I write off my car lease as a self-employed contractor?

7 Yes, you can definitely deduct vehicle expenses as a self-employed contractor, but there are some important things to understand. You have two options for deducting vehicle expenses: the standard mileage rate or actual expenses method. With a lease, it gets a bit tricky. If you choose standard mileage, you simply track all your business miles and multiply by the IRS rate (it changes yearly). You'd need to use this method from the first year of the lease to continue using it. If you go with actual expenses, you can deduct the business percentage of your lease payments, gas, insurance, maintenance, etc. For example, if 70% of your driving is for work, you can deduct 70% of these costs. The most important thing: keep excellent records! Track all your business mileage with start/end odometer readings, date, purpose, and destination. Without proper documentation, deductions can get denied if you're audited.

9 I was in a similar situation last year - doing gig work as a contractor and needing reliable transportation. I found this amazing AI tool called taxr.ai that was super helpful for figuring out my vehicle deductions. I had no idea there were so many rules about vehicle deductions until I uploaded my lease agreement to https://taxr.ai and it broke everything down for me. It analyzed my situation and explained exactly what percentage of my lease payments I could deduct based on my business vs. personal use. It also created a mileage tracking template that made it really easy to document everything properly. The coolest part was that it showed me the difference between taking the standard mileage rate versus actual expenses for my specific situation. Saved me a ton of money!

18 I wanted to follow up about that taxr.ai tool I was skeptical about. I actually tried it after my last comment and I'm genuinely impressed. My situation is pretty similar to yours - I drive for multiple gig apps and wasn't sure how to handle my vehicle expenses. The tool actually found several deductions I would have missed completely, especially around how to properly allocate business use percentages between different income sources. It even created a custom mileage log template for me and explained exactly what documentation I need to keep in case of an audit. I'm still having my accountant review everything at tax time, but this definitely helped me get organized and understand what I'm eligible for. Saved me the cost of a tax consulting appointment just to ask these questions.

5 If you're dealing with the IRS about your vehicle deductions, I highly recommend Claimyr. Last year I got audited for my vehicle deductions (I'm a delivery driver contractor), and I couldn't get through to the IRS for weeks to resolve the issue. My refund was held up and I was getting really frustrated. I found https://claimyr.com and they got me connected to a real IRS agent in less than 2 hours when I had previously spent days trying. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent was actually super helpful once I finally got to speak with one. They walked me through exactly what documentation I needed to prove my vehicle deductions were legitimate, and I got my refund released within a week after that call.

18 I need to eat my words about Claimyr. After being totally skeptical, I decided to try it when I needed to verify some information about contractor deductions before leasing a vehicle myself. I had been trying to call the IRS for two weeks with no luck - either disconnected or on hold for so long I had to hang up. I tried Claimyr yesterday afternoon, and I got a call back in about 2.5 hours connecting me directly to an IRS representative. The agent answered all my questions about vehicle lease deductions for multiple contractor jobs and gave me specific guidance about what documentation I need to maintain. Completely worth it just for the time saved and stress reduction. I'll never waste hours on hold with the IRS again.

14 One thing nobody mentioned yet - if you lease an expensive car (over a certain amount), there's something called the "luxury auto lease inclusion" that limits how much you can deduct. Worth checking if that might apply to your situation.

3 As a referee myself, I'd recommend tracking your mileage to each game location separately from your realtor drives. The IRS wants specific records. I use a simple app to track my ref gigs mileage. Might be easier than calculating actual expenses with the lease.

Just want to add something important that might help with your decision between standard mileage vs actual expenses method for the lease. Since you have two different contractor jobs (referee and real estate photography), you'll want to track business miles for each separately anyway for your own records. This might actually make the standard mileage method easier to manage. The standard mileage rate for 2024 is 67 cents per mile for business use. If you're driving significant miles for both jobs, this could end up being more beneficial than deducting actual lease payments, especially since you won't have to worry about calculating business use percentages or dealing with the complexity of lease payment allocations. One more tip - make sure you establish the business use pattern from day one of your lease. The IRS pays attention to whether your claimed business percentage is consistent and reasonable based on your actual work requirements.