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posted Mar 16, 2024 8:15:29 AM

Can I deduct the replacement cost of my totalled car with no collision insurance?

i totalled my car and had no collision insurance and replaced it. Is this deductible?

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2 Replies
Level 15
Mar 16, 2024 8:25:39 AM

If this is for a personal vehicle, not used in a business, it is not deductible on a tax return.

Expert Alumni
Mar 16, 2024 8:28:48 AM

No.  If this was a personal expense, this is not at all reportable or deductible on your return.

 

If this is a business used vehicle, meaning you use it for self-employment work, not work as an employee, then you would be able to list the new vehicle on your return as a vehicle and then decide how you want to take the business vehicle deduction.  By taking the standard mileage deduction or the depreciation deduction. 

 

You will also need to report the disposition of the vehicle you totaled on your return this was a business use vehicle and you claimed expenses for it in past years. You will walk through the business vehicle section and select that you stopped using the vehicle in 2023, then continue through to report the sale of the vehicle.

 

Deducting Auto Expenses

Sale and Disposition of Assets for Business