Taxes weigh on everyone’s minds, and many are looking for deductions relevant to their circumstances in order to reduce or eliminate an onerous tax bill. Oftentimes, we are familiar with deductions related to our homes or businesses but are less certain about one daily part of our lives: our cars.
Do you use your car for business-related purposes?
While pure personal use of your vehicle is not tax-deductible, there are certain situations where you may be able to deduct car insurance premiums from your taxes. A word of caution: commuting to and from work in a personal vehicle does not qualify for a tax deduction.
The two most common ways to deduct car insurance premiums are:
1. If you are self-employed and the vehicle is used to further your business (such as a house painter using his truck to complete jobs)
2. If you are an employee but your employer does not reimburse you for business-related expenses related to your case (such as a personal assistant getting an employer’s dry cleaning or driving an employer around town)
Are there any other deductions when it comes to my vehicle?
Yes, you may also be able to deduct other costs such as fuel, parking fees, car repairs, and even depreciation if your costs are more than 2% of your adjusted gross income (AGI). Every penny counts, so don’t miss out on auto expense deductions that could benefit you this tax season.
Contact our office today with any of your insurance coverage questions or concerns. We’re here for you.