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Are Auto Insurance Costs Tax Deductible
Auto insurance costs can be a real downer when planning your yearly budget. However, one thing a lot of people don’t realize is that there are ways to get some of your insurance expenses back through your income taxes. Below are some common tax deductible insurance scenarios that could help you save money come April.
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Work Related Deductions
Your auto premiums are not tax deductible if you are only using your car for personal use. However, if you are self employed or have a job that requires you to use your vehicle for work related matters then you may be eligible to deduct a portion of your annual fee. Typically commuting does not count as a work related matter unless you are traveling a very far distance. Also, if your employer compensates you fully for using your vehicle at your job you cannot claim any deductibles.
Theft or Casulty Loss Deductions
If your car is stolen or damaged, and your insurance company has not fully covered your expenses you may be able to claim a theft or casualty loss deduction. To qualify for this tax break your loss must be at least $100, and be greater than 10% of your adjusted gross income for that tax year. Also if the accident or damaging event is ruled to be your fault then you cannot qualify for this deduction. You may also be able to apply your insurance deductable as a casualty loss under the right circumstances.
Time Away from Work Deductions
One other way to claim a deduction is if you have missed time at work due to personal injury from an accident. Estimated wages lost during your injury are the only deductable expense however. Vehicle repair and hospital expenses are not included for the tax break.
As with any matter of this nature, it is always a good idea to consult a tax lawyer. Using this article as a guideline, you should be able to determine if you’ve been missing out on some auto insurance tax breaks that you are entitled too.
