Can You Write Off Commercial Auto Insurance on Your Taxes?
Business owners must be proactive in their financial management. Many people get commercial vehicle insurance to mitigate the risk of financial loss as a result of an accident. Coverage can be rather costly, unfortunately. Can you write off commercial auto insurance on your taxes? Read on to find out more!
Commercial auto insurance may be beneficial to business owners for a variety of reasons. It reduces the likelihood of you having to pay out-of-pocket expenses following an accident. Most company owners can deduct the cost of their insurance as a tax deduction to help offset the expense. For every business owner, this is a win-win situation.
To be clear, every firm should discuss this advantage with their tax advisor. Not every vehicle or driver will meet the requirements. Only those that are owned and operated as a part of the business are usually eligible.
When Can It Apply?
In most circumstances, cheap commercial auto insurance is tax deductible. It will, however, normally apply only if the firm utilizes the automobile as part of its activities. The automobile you drive to work, for example, is not always a tax deduction. The insurance you pay to protect your company’s fleet of delivery vehicles, on the other hand, might be.
What About Self-Employed Individuals?
Whether business auto insurance provides tax benefits to self-employed persons depends on how the car owner utilizes the vehicle. On your Schedule C tax form, you may be entitled to deduct the cost of commercial motor insurance.
Employees who have this coverage may be eligible to deduct it on their Form 2106, Personnel Costs and Expenses. This typically applies only if you haven’t been reimbursed for car-related expenditures. It also doesn’t apply to cases when you get reimbursed for driving for business.
We hope we have answered all of your questions regarding if you can write off commercial auto insurance on your taxes. Reach out to Serenity Group today to get an affordable commercial auto insurance policy with no hassle.