Key Things to Know When Deducting Your Auto Insurance on Taxes
February 11, 2015
Having a Tri-State auto insurance policy in place can provide you with exceptional coverage and peace of mind, as well as aid you on your taxes. There are a few key things to know when pursuing auto insurance deductions on your taxes.
What Vehicle Uses Qualify for a Deduction?
There are 4 instances in where driving a car or truck can count towards a deduction:
1. Business purposes
2. Medical purposes
3. Moving or relocating
4. Charitable services
What Counts as an Expense?
If your car use falls within one of the aforementioned categories, then you can claim certain expenses. A few of the common choices include:
A standard mileage rate can be used instead of actual expenses. It focuses on the miles that were driven to fulfill the deduction purpose. This option requires less paperwork, and can also include parking fee and toll expenses.
Where do I File?
If you are self-employeed you would claim the deduction on your Schedule C, and if you are an employee you claim it on Form 2106. For medical and charitable expenses it should be reported on Schedule A.
By taking time to understand these key things for your auto insurance deduction, you can make your Tri-State auto insurance policy work in your favor on your taxes.