Claiming Commercial Auto Insurance On Taxes

If you use your car for business purposes, you can deduct all of your car expenses on your taxes. This includes all costs that come with ownership, including gas, maintenance and car insurance premiums. 

This applies if taxpayers drive for a company car or if they are self-employed. If you use your car for business and personal use, keep detailed notes of when it is used for business. You will only be able to deduct the time it is used for business purposes. 

Some examples of professionals who can claim commercial car insurance include: 

  • Rideshare drivers
  • Delivery drivers
  • Roadside assistance mechanics
  • Freelancers 

What’s not eligible for deductions

There are a few exclusions on what you can deduct on taxes when it comes to commercial vehicles. A person’s commute is not tax deductible. Any travel expenses that a person was previously reimbursed for are also not tax deductible.

Tax Forms Needed

Self-employed taxpayers need to file a Schedule C form. The Schedule C form includes a section to deduct car insurance expenses. Employees of a company need to fill out a Form 2106 Employee Business Expense, but only if the employee was not reimbursed already.

If this is the first time you are using the car insurance tax deduction, it is best to consult a tax professional to thoroughly explain the options you have available. 

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