Are Car Insurance Premiums Tax Deductible?

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The answer to whether or not car insurance premiums are tax deductible depends entirely on what type of car insurance you have and how you use your car. For personal auto insurance, the answer is that you can’t deduct your premiums from your tax return.

However, if you have a commercial auto insurance policy and use your car for legitimate commercial purposes (including being a deliver drive), you likely can deduct the cost of your auto insurance from your tax return. However, be advised that your policy must be one that allows for the business use of your car.

If for example, you work part time as a pizza delivery driver and fail to get proper commercial auto insurance, then not only may your deduction be denied, but you may not even be covered by your current auto insurance policy.

To learn more about how you can deduct your car insurance premiums from your tax return please talk to your tax adviser and/or the IRS. They can review your situation and give you definite answer about whether or not your car insurance premiums qualify for a tax deduction.

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