Can my wife lease a car for work and then write it off if she is an independent contractor?

Question

My wife is in the medical field, she currently works for two different Dr's providing the same service. One Dr is close to home while the other is quite a distance. Both of the Dr's pay her without taking out taxes so we would like to maximize her write offs. There is a good chance she will find another Dr to work for in the near future, so we would like to know what our options are with leasing a car.

Answer 1

She is working as an independent contractor, as the doctors are not withholding social security and medicare taxes. So this is her income for self-employment.

She has to report her income and expenses on Schedule C or C-EZ. She can deduct many business related expenses on schedule C. If she is leases a car, she may be able to deduct proportionate expenses based on her business commute and personal commute or she can take standard mileage deduction for business commute. Home to first job is personal commute. First job to second job is business commute. Second job to back home is personal commute.

Her net income on schedule C is subject to 15.3% SE tax.

Answer 2

Maybe. This is a complicated question that partially depends on whether or not the car is used for personal reasons. The best thing to do is consultant an attorney or accountant. However, I can say that business use of a vehicle is potentially deductible, but whether or not the entirety of the lease payment can be deducted will depend on her specific situation.

Answer 3

yes, you have to itemize. a 1040, 1040 schedule a, and form 2106 is for un-reimbursed business expenses. My husband works in construction and is on the road a lot, the 2106 is where you get to deduct mileage, meals, motels, certain business expenses like special work clothing, union dues, special work equipment, tolls, vehicle rental and leasing- pretty much anything you need and purchase in order to go to work that is not reimbursed by an employer. My husband is considered an independent contractor even though he gets dispatched to jobs through the union hall.

Answer 4

If she is getting paid under the table, I would not consider "telling the IRS the reason for your writing off the leased vehicle". You either have the choice of your wife getting paid under the table OR when she has employment deductions, then she can claim the tax write off for a vehicle IF she uses it traveling repeatedly during job hours and doesn't collect for millege. Hope this helps. :D

Answer 5

Form 2106 is for employee business expenses. If your wife is self employed she can write the business portion off on Schedule C or C-EZ

Answer 6

Maybe. She needs to log all miles driven, and whether they are commuting miles, business miles or personal miles. She could deduct the business miles, not the others.