tax help center

Is Car Insurance Tax Deductible?

The US tax code is one of the most complex series of documents outside of the scientific world. What has happened is that the code has been amended so many times as pressure groups and special interest groups add their slice to get a better price. That is why it is possible for thirty different tax assessors to assess a family of four, and for each one to come up with thirty different quotes, all of which are “Provably” correct. To say there is contradiction in the US tax code is like saying the sea is blue or the sky is up. Yet, where does that help you with your deductions? Here are a few thoughts on the subject that may help you avoid another trip to the tax help center.

Car Insurance is Often Deductible In Parts

Your car insurance is deductible as part of a list of expenses for certain individuals. As mentioned in the introduction, the tax code in the US is a mixed bag, which means what counts as a deduction for you may not count for other people. If your car counts as part of your expenses for you to get to your job, or for you to run your business, then insurance can be counted as a deductible.

The Deduction Inclusion Problem

What confuses some people is that if they are claiming a deduction for their car, they often portion it out as a percentage. For example, if you were claiming gas money for your car, you may claim at a rate of 40% because you figure that you use 40% of your yearly gas getting to work, doing work errands, etc.

Some people think that if they are deducting car insurance, then they should also deduct 40% of their insurance costs because they are driving 40% for work and 60% for home/pleasure, etc. However, that is not how you need work it out. In most cases, you can deduct all of your car insurance. You can check with your tax help center, but there are several cases where you can deduct 100% of your car insurance with no fear of any negative repercussions.

Can I Deduct All of my Car Insurance and Not Just 40%?

In many cases, you can deduct 100% of your car insurance. This is especially true for self-employed people who need a car, and for certain members of the military, or for people who need their car in order to do their job.

The examples given earlier mentioned how some people deduct 40% of their insurance costs same as how they deduct for their gas money. But, in order to drive your car, you need insurance. It is an unavoidable expense of having a car. Even if your job only asks you to use your car once per week or per month, you 100% need insurance in order to use your car, so you can deduct 100% of your car insurance from your taxes. The fact that you also use your car (and its insurance) for pleasure and leisure is not relevant.

Getting a Good Car Insurance Policy

Whether a car insurance policy is tax deductible is one thing, but actually having a good policy that is fairly priced is what really matters. That is why, before you head off for help from your local tax help center, go online and get a quote from Mona’s Insurance. You will find an insurance policy that covers you fully and that charge you a fair price.

No Comments

Be the first to start a conversation