Are you an employee who uses their vehicle for business use? If you’re not reimbursed by your employer for using your vehicle you do qualify to write off your auto insurance costs off on your taxes.
Many employees and self-employed business owners do this every year and are able to save a lot of money but the trick is to be able to actually prove that your vehicle was being used for work or business use. The IRS actually requires that people who want to write off their auto expenses to keep a log and track their business, commuting and personal miles.
Employees or self-employed business owners who use their vehicles for work or business can write off every vehicle related cost. You can either take a deduction that’s equal to the miles driven for business times a standard per mile rate or deduct the percentage of vehicle expenses equal to those miles you drove for work or business represent.
It’s important to note that only miles driven for work or business are deductible. Personal or recreational miles are not deductible. Many people think that they can deduct all of the costs for the vehicle that they drive but the reality of the situation is that unless you leave the vehicle parked when not driving it for work or business you will only be able to deduct 50% of your vehicle expenses.
The IRS is always looking for good records to justify auto related expenses so always be sure to keep track of everything. If you don’t know how many miles you drive on average each week for business, commuting or personal use you can get a good estimate by reviewing your appointments for one week. Once you have a mileage number for one week, multiply that estimate by 52 so you can get the best estimate of the total miles that you drove on that vehicle.
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