Can a car loan get you a tax refund?

I want to maximize my tax refund this year to add to my down payment for a house. Can I get a tax refund from my car loan?

Answer
Getting as much as possible back on your tax refund is always a smart and exciting move. But unless you use your car for business purposes, you can’t deduct your car loan or any related expenses related to car ownership.
Unlike a mortgage, the interest on a car loan is not tax-deductible. In addition, you can’t deduct any expenses related to car ownership, including gas, maintenance, or mileage.
However, the situation changes if you own a business and use your car for business-related purposes. In this case, you can deduct:
  • Car loan interest
  • Maintenance
  • Mileage (56 cents a mile)
  • Car insurance
You can also deduct a portion of these expenses if you use your car part of the time for business. Say you use your vehicle for 60% business and 40% personal. As a result, you could deduct 60% of these expenses on your taxes.
And although you can deduct car insurance as an expense, don’t leave money on the table by failing to shop around. The Jerry app gathers personalized quotes from 50+ top insurance providers, finding you the best rates and coverage in seconds!
Eric Schad
Answered on Dec 10, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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