Can I Deduct Auto Insurance Premiums as a Business Expense?
Answer:
It depends on how you use the car. If you use the car for business and pay insurance that covers liability, damage, and other losses these premiums can be deducted as a business expense.


However, certain conditions apply including how the vehicle is used and whether or not you have claimed the standard mileage deduction.

If the auto insurance is for vehicles that are strictly for business use, such as a fleet of plumbing trucks, then yes, you can deduct the auto insurance premiums as a business expense.

If you use your vehicle for both business and personal use, you can deduct a portion of the premiums as a business expense in proportion to the usage. For example, if you use the vehicle for business 40% of the time and for personal use 60% of the time, you may deduct 40% of the insurance premiums. But, if you use the IRS’s standard mileage rate to calculate your auto expenses, you may not deduct your auto insurance premiums because the mileage rate takes insurance into account.

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