Are car extended warranty refunds, and gap insurance refunds taxable?

[KrisD15]

Only if the vehicle is a business vehicle, in which case the portion of the cost in relation to the business use would be an expense. 

If the business use is 75%, 75% of the cost is an expense. 

For a personal use vehicle, those expenses are not deductible. 

[gilmonstr]

Ok. If I received GAP, and extended warranty refund checks from Toyota do I report this as income, and where would I report it on my tax return?

[AliciaP1]

If you used the vehicle for business and received the checks in 2022 you can add the business percentage of the amounts to the sales price of the vehicle you stopped using in 2022.  If you received the checks in 2022 but stopped using the vehicle in 2021 and reported the "sale" then, you will need to add the business use percentage of the income as Other Self-employed Income on your Schedule C.

If you did not use the vehicle for business these refunds are not taxable income and do not need to be reported.

To enter Other Self-employed Income in TurboTax Online you can follow these steps:

1. Open or continue your return in TurboTax
2. Search for self employed income (use this exact phrase, don't add a hyphen) and select the Jump to link at the top of the search results
3. Answer Yes on the Did you have any self-employment income or expenses? screen
   • If you land on the Your 2022 self-employed work summary page, select Review next to the work you're adding income for
4. Answer the questions on the following screens until you arrive at Let's enter the income for your work
5. Scroll down to the Income section and click Add income for this work
6. Choose Other self-employed income and Continue
7. Apply the Business use percentage of the vehicle as the last use percentage claimed on your return to the income totals and enter the reduced amount here

@gilmonstr