What can independent contractors write off on taxes - travel, gas, meals and phone expenses?

You've got a good start with tracking gas, meals, and your phone! As an independent contractor, you have access to quite a few tax deductions that can really help reduce your tax burden. For your vehicle expenses, you actually have two options: you can either track all your actual expenses (gas, maintenance, insurance, depreciation) and deduct the business percentage, OR you can use the standard mileage rate (currently 67 cents per mile for 2024) which is often easier. If you choose the standard mileage rate, keep a detailed log of business miles driven. Meals while traveling for work are 50% deductible (100% for restaurant meals in 2021-2022, back to 50% for 2023 onward). Beyond what you mentioned, you can also deduct: - Business insurance - Professional development (courses, certifications) - Work-specific tools and supplies - Software subscriptions used for work - Marketing expenses (business cards, website) - Health insurance premiums (potentially) - Retirement plan contributions (SEP IRA, Solo 401k) For home office, you need a dedicated space used regularly and exclusively for business, but if you do administrative work at home, you might qualify even if you're on the road most of the time. Remember to set aside money for your quarterly estimated tax payments since you don't have an employer withholding taxes from your paychecks.

I was in a similar situation last year with a ton of travel for my contractor work. I was so confused about what I could write off that I almost gave up and just took the standard deduction. Then a buddy told me about https://taxr.ai and honestly it was a game changer for me. Their AI thing scanned all my receipts, bank statements, and even my calendar to find deductions I didn't even know existed. It caught over $3,800 in home office expenses I was going to miss because I thought I wouldn't qualify since I was on the road most days. Turns out the days I was doing paperwork and scheduling from home totally counted! It also helped me decide whether to take the standard mileage rate or actual expenses for my car. In my case, the standard rate was better but it showed me both calculations.

Just wanted to follow up about that taxr.ai thing I was skeptical about. I decided to try it for my lawn care business taxes and wow, I'm actually impressed. It found like $2,400 in deductions I was missing from tool depreciation and partial vehicle expenses when I thought I could only claim mileage. The coolest part was it helped me correctly categorize some equipment repairs that I wasn't sure about. It asked questions about whether the repair extended the life of the equipment or just maintained it, which apparently matters for tax purposes. Also helped me figure out the whole estimated quarterly tax payment thing which I was completely messing up before. Definitely using it again next year.

For anyone who needs help figuring out their contractor deductions, I strongly recommend calling the IRS directly to get clarification. They can answer specific questions about your situation. I know what you're thinking - "Yeah right, like I can actually get someone on the phone at the IRS!" I felt the same way after spending HOURS trying to get through. But then I found this service called https://claimyr.com which somehow gets you through the IRS phone tree and holds your place in line. When an agent is available, they call you back. I used it last month to ask about deducting my work boots and specialized clothing as an electrical contractor. Got connected to an IRS agent within 40 minutes instead of the 3+ hour wait I had before. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that my specialized electrical safety gear was deductible but regular clothes, even if only worn to work sites, weren't. Saved me from making a costly mistake on my return.

Okay I have to eat my words about that Claimyr thing. After my skeptical comment I decided to try it just to prove it was BS, and I'm actually shocked that it worked. I needed to ask about contractor expenses for my photography business since I wasn't sure if certain camera equipment was a direct expense or needed to be depreciated. I've literally never gotten through to an IRS agent before despite trying several times during "off-peak hours" as suggested. With this service I got a call back in about 35 minutes with an actual IRS agent on the line. The agent walked me through exactly how to handle my equipment purchases over $2,500 and confirmed I could deduct my photography website and cloud storage as business expenses. Just wanted to post this follow-up since I was so negative before. It definitely works and saved me hours of frustration.

Don't forget about the Qualified Business Income deduction (Section 199A). As an independent contractor, you might be able to deduct up to 20% of your qualified business income. This is separate from your regular business expense deductions and is a huge tax savings that many self-employed people miss! Also, since you're traveling for work, if any of your trips require an overnight stay, you can deduct lodging costs too, not just meals. And one more tip - keep a separate business checking account and credit card if possible. Makes tracking expenses SO much easier and looks way better if you ever get audited.

Quick tip from someone who's been an independent contractor for 7+ years: GET QUICKBOOKS SELF-EMPLOYED! It links to your bank accounts and credit cards, automatically categorizes expenses, tracks mileage with GPS, and separates business from personal stuff. Makes tax time so much easier! The mileage tracker alone saved me almost $3k in deductions last year because i literally just open the app when i start driving to a job site and it does everything automatically.

As someone who's been doing contract work for about 3 years now, I can definitely relate to the overwhelming feeling of trying to figure out all the deductions! A few things that really helped me: 1. **Set up a simple system NOW** - I wish I had started tracking everything from day one instead of trying to reconstruct expenses later. Even a basic spreadsheet with columns for date, amount, category, and description works wonders. 2. **Don't forget about business use of your home** - Even if you're on the road most of the time, if you do any administrative work from home (scheduling, invoicing, etc.), you might qualify for the simplified home office deduction. It's $5 per square foot up to 300 sq ft. 3. **Consider forming an LLC** - This won't help with this year's taxes, but for next year it can provide liability protection and potentially some additional tax benefits depending on your situation. 4. **Save for taxes religiously** - I learned this the hard way my first year. Set aside 25-30% of every payment you receive. Open a separate savings account just for taxes so you're not tempted to spend it. The learning curve is steep but once you get a system down, it becomes much more manageable. You're already ahead of the game by thinking about this stuff early in the year instead of scrambling at tax time!