Tax season is here! While preparing all of your documents for filing, you may have asked yourself if your car insurance premium is deductible. The short answer? It’s definitely possible! Depending on how you’re using your car, you may be eligible to deduct expenses when filing your taxes this season.
How Do You Use Your Car?
If you solely use your car for personal matters, you will not be able to deduct your car insurance premium on your taxes. On the other hand, certain business uses may allow you to claim your auto insurance premium. Do you use your car to transfer business supplies or materials? Do you drive to visit clients? If you answered yes to either qualifying question, it will certainly be worth exploring whether you should deduct these expenses with your accountant. On the other hand, simply commuting to work is not considered a business-related purpose and should not be deducted.
If you’re using your car for business purposes, you might be able to deduct part of your insurance premium this tax season. Most often, individuals that rely heavily on their vehicle for work purposes and fall into these categories are eligible to deduct their car insurance premiums:
- Self-employed individuals that use their car for business purposes
- Employees using their car for business purposes and do not receive company reimbursement
If either scenario applies to you, you may be eligible to deduct these other car-related expenses in addition to your insurance premiums:
- Car repairs
- Gas and oil
- Garage rent
- Lease payments
- Registration fees and licenses
- Tolls and parking fees
Keep in mind that you will be expected to prove that these costs are directly linked to business uses.
Choose Auto Insurance Coverage that Works for You at Freedom Insurance
We offer comprehensive, customized coverage from numerous major insurance carriers and make it easier than ever to find affordable policies that are exactly what you need. We have been serving clients throughout the greater Howard County and Carroll County areas since 1979, and we look forward to helping you and your family thrive. Get in touch today by calling (410) 795-2000 or requesting a free quote.