Standard mileage vs actual expenses deduction for my new car as a real estate photographer?

This is a common dilemma for self-employed folks with vehicles! Here's what you need to understand about the two methods: If you choose the standard mileage rate in the first year you use a vehicle for business, you can switch between standard mileage and actual expenses in later years. However, if you choose actual expenses in the first year, you're locked into that method for the life of that vehicle for business purposes. Since you already filed using actual expenses for 2022, then tried to amend to standard mileage (which is allowed if it was the first year), Quickbooks is calculating the tax difference. The $2,750 likely represents the difference between the deductions plus any penalties/interest. For a high-mileage business like real estate photography, standard mileage is usually more beneficial in the long run. If you're putting 15,000+ business miles annually, paying that $2,750 now might save you much more over the car's lifetime.

I went through something similar last year with my delivery business. I found this tool called taxr.ai (https://taxr.ai) that really helped me sort through my vehicle deduction options. It analyzed my specific situation and showed me that even though I had to pay about $1,900 to amend my return and switch to standard mileage, I'd save over $8,000 in the next four years based on my driving patterns. The nice thing was that it showed me the exact calculations side-by-side and explained why the standard mileage makes more sense for high-mileage business use like yours. I didn't have to guess what would be better in the long run.

I just wanted to follow up about my experience with taxr.ai. After being skeptical in my earlier comment, I decided to try it anyway since my vehicle deduction situation was similar to the original poster's. I uploaded my previous tax return and vehicle information, and it immediately flagged that I could switch to standard mileage since I was still in my first year of business use. It showed me I would save about $3,200 over the next three years by making the switch and paying a smaller amount now. The analysis broke down exactly how much I'd save each year based on my driving patterns and showed me the specific IRS rules that applied to my situation. Definitely worth checking out if you're trying to make this decision - it made everything much clearer than what my previous accountant had explained.

If you're planning to call the IRS to confirm any of this vehicle deduction info, good luck actually reaching someone. I spent 6+ hours on hold last month trying to get answers about amending my return for a similar issue. I ended up using a service called Claimyr (https://claimyr.com) that got me connected to an IRS agent in about 15 minutes instead of waiting for hours. They have a demo video of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that I could switch from actual expenses to standard mileage since I was still in the first year of business use, and explained exactly what forms I needed to file. Saved me a ton of stress and uncertainty.

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it myself because I was desperate to resolve some questions about my vehicle deductions before filing this year. The service actually worked exactly as advertised. I got a call back in about 20 minutes, and was connected to a real IRS agent who verified my identity and helped explain my options for switching deduction methods. The agent confirmed that I could switch from actual expenses to standard mileage only in the first year, and walked me through the amendment process. They even sent me to a specific department that handles business vehicle deductions. Definitely saved me from making an expensive mistake on my taxes this year.

Just want to share some actual numbers from my experience as a courier with high mileage (18,000+ business miles per year): Year 1 with actual expenses: $7,400 deduction Same year if I'd chosen standard mileage: $10,260 deduction Difference: $2,860 MORE with standard mileage! And the gap only widens in subsequent years as the vehicle depreciates. By year 3, actual expenses gave me about $5,200 while standard mileage was worth $11,070. OP, definitely consider taking the hit now to switch to standard mileage if you're a high-mileage business. The math strongly favors standard mileage for real estate photography where you're constantly driving to different properties.

Has anyone used QuickBooks Self-Employed for tracking both methods simultaneously? I heard there's a way to set it up to compare them at tax time.

As someone who's been through this exact scenario with my photography business, I completely understand your frustration! The "locked in" rule for actual expenses is one of those tax traps that catches a lot of small business owners off guard. Given your high mileage (15,782 business miles), the standard mileage deduction would give you about $10,337 this year alone (at 65.5 cents per mile). With actual expenses, you're probably looking at significantly less unless you have unusually high vehicle costs. Here's my take: if you're planning to keep this car for several more years and maintain similar mileage patterns, paying the $2,750 now is likely worth it. You'll probably recoup that cost within the first year of using standard mileage, and then continue saving thousands annually. Before making the final decision, I'd recommend calculating your total actual expenses for this year (including depreciation, gas, insurance, repairs, registration, etc.) and comparing that to what standard mileage would give you. If the gap is as wide as I suspect, the math strongly favors taking the hit now. Also consider consulting with a tax professional who specializes in small business returns - they can run the numbers for your specific situation and help you avoid any pitfalls with the amendment process.