Contractor Tax Deduction Calculator
Estimate your total tax deductions from mileage, home office, equipment, tools, meals, and more. See how much you could save.
Enter Your Expenses
Rate: $0.67/mile (2024)
Home Office
Deductible in full (Section 179)
Fully deductible current year
50% deductible
Enter monthly amount
Liability, vehicle, etc.
Estimated Deductions
* Estimates only. Consult a tax professional for advice specific to your situation.
Tax Deductions Every Contractor Should Be Tracking
The IRS allows contractors to deduct ordinary and necessary business expenses from their taxable income. For most contractors, these deductions add up to $15,000-40,000 annually — potentially saving $4,000-12,000 in taxes. But only if you track them.
Mileage: The Biggest Missed Deduction
At $0.67 per mile in 2024, a contractor driving 20,000 business miles has a $13,400 deduction. Automatic mileage tracking captures every deductible drive without any manual logging.
Home Office Deduction
If you use a dedicated space in your home regularly and exclusively for business — even a desk where you do estimates and billing — you may qualify. The deduction is calculated as the percentage of your home used for business, multiplied by qualifying home expenses.
Tools and Equipment
Under IRS safe harbor rules, items costing under $2,500 per unit can generally be fully deducted in the year purchased. Larger equipment can often be fully expensed under Section 179. Keep all receipts.
The Critical Importance of Documentation
Knowing about deductions is step one. Documenting them is step two — and where most contractors fall short. The IRS requires contemporaneous records for mileage and receipts for expenses over $75. Contractor bookkeeping software that captures receipts automatically and tracks mileage in the background eliminates the documentation problem.
Never Miss a Deduction Again
Hardhat Ledger tracks mileage automatically and captures every receipt — so your deductions are documented all year, not scrambled for in April.
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