Is Car Insurance Tax Deductible?
Business Use Only
If you use your car for business purposes, you may be able to deduct the cost of your car insurance premiums on your taxes. This means that if you use your car to drive to meetings or meet clients, you can deduct the portion of your car insurance premiums that relate to your business use of the vehicle.
Calculating Deductible Amount
To determine the deductible amount, you need to calculate the percentage of miles driven for business purposes compared to total miles driven. For example, if you drive 10,000 miles per year and 6,000 of those miles are for business purposes, then 60% of your car expenses are tax deductible.
Record Keeping
It is important to keep accurate records of your mileage and car expenses to support your deduction in case of an audit. You should also keep separate records for personal and business use of your vehicle.
Personal Use Only
If you only use your car for personal reasons, your car insurance premiums are not tax deductible. This means that if you use your car to run errands or go on road trips, you cannot deduct your car insurance premiums on your taxes. In summary, car insurance can be tax deductible if you use your car for business purposes. However, if you only use your car for personal reasons, your car insurance premiums are not tax deductible. Remember to keep accurate records and calculate the percentage of miles driven for business purposes to determine your deductible amount.
1. IRS.gov
2. NerdWallet.com
3. TurboTax.intuit.com
Additional Sources
