If you use your motor vehicle only for personal purposes (like most people), you can't deduct your auto insurance premiums on your tax return.
It is possible to claim a deduction for your car that's used for your job. However, the fact that it's "taken out of your check" brings up the question, if this is a charge for an employee's use of a company vehicle. If you have any other details regarding this question, please feel free to post them in the comment section.
Assuming that you do own the car, the following may help, but it depends on how many miles you drive, how expensive your car is and several other factors.
This would involve deducting actual expenses for your vehicle.
Here are some of the items you can include in your deduction:
· A portion of your lease payment (if you are leasing your vehicle)
· Auto loan interest (if you’re financing the purchase of your vehicle)
· Auto Insurance
· Maintenance and Repairs (like oil changes, new tires, replacing brake pads, etc.)
· Depreciation
Example You drove 10,000 miles in the year 2017, and 5,000 of those miles were for business. Here’s how you would break down your deductions using the Actual Expenses method:
· Gas: $1,000
· Insurance: $1,500
· Repairs: $400
· Lease Payments: $6,000
· Oil: $100
· Car Wash: $500
These figures total to $9,500 in car-related expenses. Since you used your car for business purposes 50% of the time, you would multiply your total expenses by 50% to get your actual deduction, which comes out to $4,750.
If you use these same figures to calculate your reimbursement using the Standard Mileage method, you would multiply your business mileage (5,000 miles) by the standard mileage rate (53.5 cents per mile for 2017), which comes out to $2,700.
This would leave you with a net savings of $2,075 ($4,750-$2,675) by using the Actual Expenses method over the standard mileage for the deduction.
Of course, your mileage may vary, but TurboTax will allow you to easily determine whether this is a good strategy for you.
