Tag Archives: auto insurance

Is Auto Insurance Tax Deductible?

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Tax season FAQ: Is Auto Insurance Tax Deductible?

The world of taxes is one that most people avoid talking about. For roughly eleven months out of the year they may as well not exist – an evil we fear because we’re confused, or we’re confused because we fear. However, once spring rolls around and only a few weeks remain before the tax-filing deadline, people come out of the woodwork to investigate any and all ways to limit the size of their payment, or increase the amount of their refund. A few big questions that often comes to peoples’ minds are, when is auto insurance tax deductible, and in what scenario would it be beneficial to do a little more investigating?

Take a peak below for the tax season FAQ you’ve been looking for.

Personal Auto Use

If you are using your vehicle for personal reasons, including commuting to work, driving to the store, taking road trips, or even just keeping it parked in the garage, then your car is basically a luxury and not a necessity. It may help you with respect to making life easier, but that doesn’t mean it is tax deductible. In short, if your car isn’t being used in the course of operating a business or through donations of time with respect to volunteering then you don’t “have” to do it in the eyes of the IRS, and therefore you shouldn’t expect any sort of write off. Just remember that tax breaks come in the form of doing things to produce additional income, giving back, or necessity.

 

Small Business Vehicle

If you bought a truck for your contracting business, you primarily use the truck for business, and it has a nice company slogan and name right on the side of the vehicle, then this is a business vehicle. You may “technically” use the vehicle for personal use from time to time, but the primary use of the vehicle is for business purposes, meaning the operation and maintenance of the vehicle should be classified as a business expenses. The lines may become blurred slightly from time to time, for example if you work for a company during the day and have a side operation at night, or if you drive a small commuter vehicle as opposed to a huge contracting truck. That being said, if the vehicle is being used primarily for business use then you should have no problem with writing off the accompanying costs of keeping it going.

Specialty and/or Necessity Insurance

If you happen to be a delivery driver (or have some sort of job where driving is required), then you should be able to be reimbursed to some extent by the company you are doing work for. That being said, any time you are not reimbursed, or if you are a 1099 worker, you can always look to write off your expenses on maintaining that vehicle and paying costs including your car insurance premium. The specific deduction strategy will depend upon the type of work as well as the classification of your employment. The question “is auto insurance tax deductible?” is one that’s likely to continue getting asked, as according to insurance comparison and shopping company CoverHound, no definitive answer exists.

 

Sales and Support Roles

If you are in a sales role (which most small business owners are), then you’re already aware of all the conventions, business lunches, appointments, deliveries, and whatever else you have to do on a regular basis. As the IRS intention says, if you need to do the operation in the course of your business, then you are likely to be able to write it off. Because driving is a necessity of a small business owner (in most cases), you should have no problem writing off the majority (or however much you actually use the vehicle for business purposes) of your auto maintenance fees and insurance premium.

In summary, the most important thing to know when it comes time to determine whether or not your auto insurance and other car expenses can be written off is your classification and role. If you own your business and use your vehicle for that business, then there’s a good chance you can make some sizable deductions. If you don’t own your own business but you still frequently use your vehicle for work, then there’s still a chance you can write off those miles and related expenses. The most important thing is to keep records, so that you’ll be organized when the time comes to file.

Thanks,

Chase

How To Get Cheaper Auto Insurance

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Blue Truck

Get cheaper car insurance

How to get cheaper auto insurance 

Auto insurance costs us hundreds of $ every year, and it can often be very expensive. However, there are some simple things we can do to try and get it cheaper. To get a cheaper insurance policy, you need to first identify what sort of insurance policy you need for your vehicle, once you have this in mind, you can start searching for cheaper policies. Here are a few simple tips: 

Decide on the type of coverage you need 

Saving money on your auto insurance could be as simple as deciding on the type of policy you need. For example, if your vehicle is only worth a few hundred dollars, is there much point in you purchasing full cover? This is just something you should consider. 

Compare different insurance providers 

Comparing as many insurance policies as possible gives you the best possible chance of finding the best deal for you; it also gives you a great view of the wider options available. Using a price comparison website is the best way to compare a lot of quotes; they basically do the hard work for you so you don’t have to. Be sure to check what each quote is offering before making a final decision, check the level of insurance and the level of deductibles and adjust accordingly. 

Are there extras included in the policy? 

When you purchase auto insurance there are sometimes extras that are included in the policy. These extras sometimes include health or legal cover, but do you really need them? If you already have health or legal cover, then you should try and get them removed from your policy, this will reduce the cost of the policy as a whole.   

Have you considered higher deductibles?  

By requesting higher deductibles in your insurance policy does bring the cost of your insurance down substantially. If you raise your deductible amount from say $150 to $300 you could typically save around 10% on your full coverage. The higher your deductible amount the higher the % you save will be, however, you have to remember that if you need to make a claim then you will have to pay the deductible amount before your policy comes into action. 

See what special offers are available 

When people think about auto insurance, many people don’t think about special offers, but as a matter of fact, there are a lot of special offers currently available. For example, if you have two vehicles at home have you considered a multi car policy? They offer fantastic discounts for people who have more than one vehicle. There are also special offers for young drivers who are just learning to drive. You can be rewarded for good grades in school by getting a discount percentage off your insurance policy. There are plenty of special offers available; you just have to find the offer that suits your own circumstances. 

Have you checked your credit record? 

Maintaining a good credit record is a good way to save money on your auto insurance. Insurance providers often look at your credit record when you make an application, so maintaining a good record tells the insurance provider that you are a reliable customer. Keep your record clean by making any regular payments on time and try not to get yourself in to debt. 

I hope these simple tips put you on the right path to getting cheaper auto insurance, remember that every little bit of money you save helps. 

This article was provided by Andreas Nicolaides, a personal finance author at UK-based MoneySupermarket.com.