Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

If I deduct mileage as a business related expense, can I also deduct car insurance expense?

Some of my the people that I do business require a one million$ liability policy, so I spend more for car insurance than I would need to if it was just transportation...

If I were to lease a car, would the answer be different?

4 Answers

Relevance
  • ?
    Lv 6
    1 decade ago
    Favorite Answer

    You can either take standard mileage or actual expense that would include the car insurance but not both. You might consider getting a separate liability policy for the Million $ and expense that as business insurance.

  • Anonymous
    1 decade ago

    Car insurance as a business expense, no, if you drive the car all year for business, while deducting mileage.

    As a taxpayer deducting auto expenses, you have two choices: You can itemize all your expenses and report them. This means keeping your receipts and tracking the mileage and apportioning your gas bills by filling up more often, etc. and breaking these expenses out by mileage. You also get to deduct depreciation too, based on the number of miles you drove. And, of course, auto insurance.

    Or, you can take your total miles you drove for business and apply the applicable federal rate. Add to that expenses paid for bridges, tolls and parking. The second method is meant to include all your expenses in one shot including wear and tear (depreciation) of your car.

    With both methods, though, you still must keep a travel log of how many miles you drove for business. Same applies to leases, except under the first method, you also get to deduct a small amount for a lease inclusion payment.

    If you are renting a car just for a day or so for business, I would write the entire cost of that off, including insurance as rent expense.

    Source(s): Tax consultant.
  • Judy
    Lv 7
    1 decade ago

    No, if car expenses are deductible for you, you have a choice of taking the flat mileage allowance, OR actual expenses. Covering the expenses is what the flat rate is for. And no, the answer doesn't change if you lease the car.

  • Anonymous
    1 decade ago

    No, you can't do both. You either itemize all of your expenses and claim those or you do the mileage thing.

Still have questions? Get your answers by asking now.