Buy or lease a car as locums / 1099

[doctorsun]

Hello,

I've been renting cars but now that locums has become more frequent, considering buying/leasing. I sometimes have to drive 10+ hours and not as young as used to be so am looking to buy a decent car ($60K+). My question is, in terms of tax deductions, what is the best way to purchase a car? new / used? lease/purchase (assuming I'd like to hang on to car for 5+ years)? Considering I'll be using it for only locums/independent contractor/business purposes, can I apply the automobile tax deduction rule (for vehicle > 6000lbs)? Bottom line is, rather than throw away 2k/month for rental, what's best way to get own car (assuming locums company does not compensate for rental)?

Thank you

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[sirspamalot]

GVWR over 6xxx and buy and depreciate it if u use it more than 51% of the time for biz u good homie

Or.. lease and write it all off probably. If you like newish cars and no obligations (1-3 year leases) thats fine. I keep mine 20 years... I have one whose last payment was in... (drumroll please).. 2005. A big fat ol' foreign sedan. Serves as a limited use Car #3.

 

[finalpsychyear]

Im considering this as well. The model x meets the section 179 deduction for weight so you can buy it about 100k and deduct about 65k based on claiming 80 percent business use then the trump job cuts has been reduced to 80 percent in 2023. so 80 percent of 80k is about 65k. Tesla won't let you buy a car after you lease anymore but if you lease another brand you can deduct a higher percent possibly then buy it out at the end and deduct a part of that i think. Also consider that model x isn't the best longevity car in terms of needing repairs but not sure what large SUV would be otherwise.

 

[The White Coat Investor]

Hello,

I've been renting cars but now that locums has become more frequent, considering buying/leasing. I sometimes have to drive 10+ hours and not as young as used to be so am looking to buy a decent car ($60K+). My question is, in terms of tax deductions, what is the best way to purchase a car? new / used? lease/purchase (assuming I'd like to hang on to car for 5+ years)? Considering I'll be using it for only locums/independent contractor/business purposes, can I apply the automobile tax deduction rule (for vehicle > 6000lbs)? Bottom line is, rather than throw away 2k/month for rental, what's best way to get own car (assuming locums company does not compensate for rental)?

Thank you

Just buy it and quit thinking there is some sort of tax loophole out there that you just don't know about. You can deduct business miles but not commuting miles. Some interesting opportunities there in locums where you could probably claim some more miles.

Might want to run the numbers on actual expenses instead of just the mileage deduction if you're going to drive something expensive.

Business Mileage Deduction | White Coat Investor

Want to make a profit for driving around town? Look at the business mileage deduction. Perhaps some of those miles can reduce your taxes.

www.whitecoatinvestor.com

Actual Expenses vs Deducting Mileage on Your Taxes | White Coat Investor

Have you ever wondered what is the most tax-efficient way to deduct your vehicle for business purposes? Is it more profitable to deduct mileage or actual expenses?

www.whitecoatinvestor.com

 

[The White Coat Investor]

GVWR over 6xxx and buy and depreciate it if u use it more than 51% of the time for biz u good homie

Or.. lease and write it all off probably.

Hope your side gig isn't tax prep. Leasing does not allow you to magically "write it all off".

Very few docs use their car more than 51% of the time for business. Most doctor miles are commuting miles, which aren't deductible. If you're not rounding at multiple hospitals a day, you're probably not going to get there. And chances are, if you're really spending enough time driving between work sites to get this deduction that you'd be better off limiting your sites (make the patients come to you) than getting an extra auto related deduction.

 

[sirspamalot]

LOL. Mileage write-off game is for suckers. They love to go after lower income W2 earners who try to fudge in a mileage write off on a hobby business or whatever.

The rev service is looking for low hanging fruit from obvious tax cheats. Or form errors. Or greedy idiots (100% business use LOL). Or *****s. Don't be a greedy putz, m0ron or tax cheat, don't be your own tax prep guy either (especially when it runs over 100 pages). You'll do fine. Good luck.

1099 tax hacking is a sport: play to win.