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Can I reduce my tax bill via a car loan?
I was thinking of getting a car loan anyways, but I wanted to know if it will reduce my tax liability. Would a car loan reduce my tax payment at all?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Good question! You can use a
car loan
to lower your tax liability only if you use the car for business purposes. If you use the car for business, you can write off a few different expenses, including:- Mileage (56 cents per mile)
- Car loan interest
- Maintenance
- Gas
You can also deduct a portion of these costs for business if you split time in the car between business and personal use. For example, if you use the car 50% of the time for business, you can deduct 50% of these expenses.
For a regular passenger car, unfortunately, you cannot get a tax break for your car’s expenses. But cutting costs is usually more effective than tax breaks, especially when it comes to car insurance. One of the easiest ways to cut car insurance costs is through the
Jerry
app—we’ll get you personalized quotes from top insurers in seconds, so all you have to do is pick the plan that works best for you. And once you pick, we’ll even help you switch.Best of luck with cutting those costs!
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- Gregory R.
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