# Are insurance deductibles a tax deduction?



## Stevie The magic Unicorn (Apr 3, 2018)

So...

Are insurance deductibles a tax write off if you were using the vehicle for work at the time?

Asking for a friend.. Honest...


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## Launchpad McQuack (Jan 8, 2019)

I want to make it clear that I do not know the answer and this is only an educated guess.

Insurance deductibles are really just the portion of the repair cost that you pay out of pocket. This means that they fall under repairs and maintenance and are not deductible if you are using the standard mileage deduction. If you are deducting actual expenses, then they would be deductible based on percentage of business use of the vehicle.

Again, reemphasizing, this is only a guess.


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## Gandler (Jan 27, 2019)

I was curious, this is what I came up with (source: Nationwide). It seems that if it takes over 2% of AGI and the vehicle meets the criteria, then yes. I am not an accountant, this is just my own quick research out of interest.

*If you do use your car for business-related purposes, you may be able to deduct part of your insurance premium.*
Some taxpayers use their automobile as an integral part of their job, and in those cases insurance costs may be deducted at tax time. You may qualify for this deduction if:

You are self-employed and use your car for business purposes.
You are an employee and your employer is not planning to reimburse you for expenses related to business use of your car.
In addition to insurance premiums, you may also be able to deduct other auto-related costs including gas, repairs, parking and even value depreciation - as long as you can prove that these costs are directly related to business use. In order to take deductions, your auto-related costs must be more than 2% of your adjusted gross income (AGI). In other words, if your adjusted gross income is $50,000 annually, any auto-related costs you plan to claim must exceed $1,000 (which is 2% of $50,000). If auto-related costs do not exceed 2%, you cannot claim these costs on your tax return.


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## lyft_rat (Jul 1, 2019)

It seems unlikely that you could find more honest deductions than standard mileage and if you did you would be a candidate for audit. You would better off fudging the mileage if you are desparate for more deduction.


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## Uber's Guber (Oct 22, 2017)

My CPA writes off the portion that is applied to the rideshare endorsement on my policy.
(PS, I am not a tax professional, that is why I hire one.)


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## Stevie The magic Unicorn (Apr 3, 2018)

I wasn't asking about the premium, i was asking about a deductible.


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## TPAMB (Feb 13, 2019)

Plain answer, no!


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## Seamus (Jun 21, 2018)

Stevie The magic Unicorn said:


> I wasn't asking about the premium, i was asking about a deductible.


If you use the standard mileage deduction the answer should be no. (But I'm not a tax professional) However, the best source of knowledge on taxes related to rideshare is @UberTaxPro who is a tax professional and perhaps can answer this question definitively.


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## UberTaxPro (Oct 3, 2014)

Seamus said:


> If you use the standard mileage deduction the answer should be no. (But I'm not a tax professional) However, the best source of knowledge on taxes related to rideshare is @UberTaxPro who is a tax professional and perhaps can answer this question definitively.


Correct, ALL vehicle repairs are included in the SMR



Uber's Guber said:


> My CPA writes off the portion that is applied to the rideshare endorsement on my policy.
> (PS, I am not a tax professional, that is why I hire one.)


Do you use the SMR or actual expenses?


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## Stevie The magic Unicorn (Apr 3, 2018)

Let's assume i use actual expenses and the deductible was/is on a rental car used for business use/


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## FLKeys (Dec 27, 2018)

Uber's Guber said:


> My CPA writes off the portion that is applied to the rideshare endorsement on my policy.
> (PS, I am not a tax professional, that is why I hire one.)


I asked 5 different CPA's about the extra rideshare portion of my car insurance premium. I got multiple answers. I decided to deduct mine based on all the responses I got. Considering I have accurate detailed records and mileage logs and the additional rideshare premium is less than $200 per year, most likely if I ever do get audited it is a 50/50 chance that the deduction would or wouldn't be permitted based on the auditors opinion. As best as I can tell no IRS decision has been made on this question. If it is determined not to be a lawful deduction most likely I will be hit with additional taxes on the deduction and maybe interest. Most likely any penalties would be waved upon request since I do not have a past history of improper returns filled.

I'm willing to take my chances as I feel I can argue that rideshare endorsement is an extra coverage that would not be needed if I was not doing rideshare and therfore should not be part of the standard mileage deduction.


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## Stevie The magic Unicorn (Apr 3, 2018)

UberTaxPro said:


> Correct, ALL vehicle repairs are included in the SMR
> 
> 
> Do you use the SMR or actual expenses?


What if i'm using actual expenses?


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## UberTaxPro (Oct 3, 2014)

Stevie The magic Unicorn said:


> What if i'm using actual expenses?


Business % of repairs (not reimbursed from insurance) and business % of insurance both deductible


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## Stevie The magic Unicorn (Apr 3, 2018)

UberTaxPro said:


> Business % of repairs (not reimbursed from insurance) and business % of insurance both deductible


Let's throw out a _hypothetical_... (Hypothetically it's hypothetical)

(Let's assume that i rent a car to use for business purposes, It's not a lease, it's a RENTAL)

I drive a different car from home to pick up the rentals from the shop and return the car back to the shop before going home, making the use of the rented taxis _100% business use_. (I previously consulted a tax pro) {this is the same as writing off your miles going from one work location to another. But NOT to/from home}

I paid $800 for an insurance deductible (Let's assume i %*%& up a bumper)

Then the $800 insurance deductible would be a 100% business deduction? Because the rentals are 100% business use? (or the rented car i "hypothetically" Fed the bumper on?


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## UberTaxPro (Oct 3, 2014)

Stevie The magic Unicorn said:


> Let's throw out a _hypothetical_... (Hypothetically it's hypothetical)
> 
> (Let's assume that i rent a car to use for business purposes, It's not a lease, it's a RENTAL)
> 
> ...


I think you mean you paid $800 for insurance that had a deductible? Which vehicle did you buy this insurance for? (the rental car or the vehicle you used to drive to the shop). I'm not sure if you're asking whether the cost of the insurance is deductible or the out of pocket expense incurred due to the deductible is deductible.


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## Stevie The magic Unicorn (Apr 3, 2018)

UberTaxPro said:


> I think you mean you paid $800 for insurance that had a deductible? Which vehicle did you buy this insurance for? (the rental car or the vehicle you used to drive to the shop). I'm not sure if you're asking whether the cost of the insurance is deductible or the out of pocket expense incurred due to the deductible is deductible.


1 Idiot does not drive the rented car home, the idiot drives his own vehicle home making the rented car 100% business use with zero personal miles by IRS standards.

2
The Idiot wrecks bumper, the idiot is found to be _at fault_. (there is zero arguing this fact)

3
The rental includes all insurance.

The Idiot is charged $800 deductible to replace+ custom paint new bumper (Everything past $800 is covered by the company renting the car, the $800 is the deductible for being "at fault")

Is the $800 deductible on the idiots taxes?


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## UberTaxPro (Oct 3, 2014)

Stevie The magic Unicorn said:


> 1 Idiot does not drive the rented car home, the idiot drives his own vehicle home making the rented car 100% business use with zero personal miles by IRS standards.
> 
> 2
> The Idiot wrecks bumper, the idiot is found to be _at fault_. (there is zero arguing this fact)
> ...


Actual expense method-yes
Mileage method - no


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## Stevie The magic Unicorn (Apr 3, 2018)

UberTaxPro said:


> Actual expense method-yes
> Mileage method - no


OKie dokie,

I'm on actual expenses so yes...


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