Is car insurance tax deductible?

Answered by Home Insurance, Car Insurance Expert Shannon on February 25, 2021

I had a car for the first time this year. So naturally I also had car insurance for the first time ever. Is that deductible on my taxes?

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Home Insurance, Car Insurance Expert

The answer to this question is, maybe! Car insurance is only tax deductible under certain circumstances. If your vehicle is used for personal purposes or to commute back and forth from work, then your insurance is probably not tax deductible. However, if your car is used for business purposes, it may be.

Keep in mind that there are other ways your car can help you save money on your taxes! If you have gotten rid of your old clunker by way of donation, it can be claimed as a charitable donation. You can also see if your state gives credit for alterations made to your car that reduce emissions, or for electric and hybrid cars.

It would be wisest to discuss this with your tax preparer or a tax professional. Also, many tax preparation programs have questions built in to determine if your vehicle expenses are tax deductible. Check out these articles for some more detailed information on this topic:

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