Could your Car Insurance Be Tax Deductible?
If you don't itemize your deductions when you file your taxes, you could be missing out on the chance to write off any business-related car insurance. Although many taxpayers may not be aware of it, auto insurance is one of those expenses that nearly always qualifies as a write-off.
When you first sit down to work out your taxes for the previous year, it can be pretty intimidating to think about itemizing everything, especially if you haven't planned ahead by saving and organizing your receipts and other expenses along the way. In fact, sometimes no matter how much you have planned everything out, it's still a complicated process!
If you think that you may be able to save on your annual income taxes by itemizing your deductions, a qualified tax accountant can help you get your paperwork in order, and usually for a reasonable fee (which is also often tax-deductible). A trained tax professional can let you know exactly what types of expenditures can be claimed on your taxes, and guide you through the process. The average layperson simply isn't aware of just which expenses can be written off. Monthly insurance premiums for a business vehicle are the perfect example.
Qualified Business Expenses
There are many deductions you can claim if they're related to your career. Common examples include your vehicle insurance premiums, health insurance premiums if self-employed, monthly cell phone charges for a business phone, and the purchase of gadgets and equipment for your home office like desk chairs or printers. All of these items, once added up, can often total quite a bit more than the standard deduction you would normally be eligible for.
Bang for your Buck
Through careful planning, you can reduce the amount of taxes you pay each year just by keeping close track of deductible expenses and itemizing them at tax time. There are plenty of computer programs designed to streamline the process and make itemization as painless as possible. Once all your work-related expenses and receipts are totaled together, you may find yourself eligible for a refund rather than having to write a check to the IRS. Keeping track of all your auto insurance premium payments and other business expenses can really pay off in the end.