No one likes tax day because it is preceded by weeks of shuffling important documents, finding all necessary receipts, printing out important tax forms and paying an accountant hundreds of dollars just to save you hundreds of dollars. Tax season really can feel maddening sometimes, but if you look at the whole tax season as a way to recoup some losses from the previous year you can get some money back (or owe less, if you’re self-employed). What’s important is educating yourself on tax laws because most accountants are not psychic and cannot save you money if they don’t know your situation in full. The following are some tips on how your car can possibly save you money. Your Auto Insurance, too, could be a write-off and you didn’t even know it. Hopefully, the following tips will benefit you or a loved one so share this article with anyone you know who uses their car for business reasons. Also visit Part I of our Tax Series.
Is My Auto Insurance Tax Deductible?
You’re probably thinking it’s too good to be true, right? Well, if you use your car to drive to and from a full-time job, you’re not going to be able to reap the benefits of this deduction, unless you drive during the day to run errands for your employer and do not get reimbursed. If you use your car (and Auto Insurance) for only personal use you won’t be able to deduct your Car Insurance either. However, if you use your car for business-related reasons like delivering products/documents or driving to clients or conferences and seminars, you can certainly get some money back on your car in taxes. Ask your accountant if you’re eligible to write off your Car Insurance premium, possibly even depreciation of the value of the car, not just gas fare.
How Much of My Car Costs Are Tax Deductible?
If you’re self-employed and use your car for reasons related to your job, you must tell your accountant and have all the necessary documents showing how much money you spent on your car in a year. You may be able to deduct gas, repairs, parking and value depreciation. You must be able to prove that these expenses are related to business use otherwise you will not be eligible for the deduction. To take these deductions, your auto costs must be more than 2% of your annual income. If your costs do not exceed 2%, you’re not eligible to claim a deduction on your taxes.
My Car Got Stolen – Can I Deduct it from My Taxes?
This is one that applies to everyone across the board, regardless of whether you use your car for a 9-to-5 job or you use the vehicle for freelance work. If your vehicle was stolen or deemed a total loss (“totaled”), you qualify for a tax deduction. To be eligible, you must show that you filed an Auto Insurance claim. The accident can’t be due to negligence (or fraud) and your insurance provider will not have reimbursed you for the loss or could not pay out the entire amount of the loss due to the limits on your policy. In some cases, you can deduct your Auto Insurance deductible on your taxes too.
To find out how to earn deductions on your car, gas and Auto Insurance, visit here.
Having solid Auto Insurance is just as important as having a good accountant. If you want to save money, the best way is to find the lowest possible quote on Auto Insurance without compromising on the quality of coverage. Speak with a trusted Insurance Specialist about your needs and see which discounts you qualify for. Call AIS today: (888) 772-4247.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.