Many jobs require driving on a regular basis, and some of these positions require employees to pay their own commercial auto insurance premiums. While some companies may reimburse employees for this expense, others don’t. If you regularly drive around Huntington, Massachusetts for work and pay your own commercial auto premiums, you might be able to deduct the amount you pay from your taxes.
Taking your commercial auto payments as a tax deduction won’t make you rich, but it Can help you save a little bit on your income taxes
Most tax deductions lower your adjusted gross income by the amount of the deduction, which means that you don’t end up paying income taxes on the deducted amount. For example, if you make $100,000 a year and are able to take a $1,000 deduction for your commercial auto premiums, your adjusted gross income would be lowered to $99,000. You would have to pay income taxes on $99,000, rather than $100,000.
How much you’ll save on your taxes depends on a few different factors, including your annual income and how much you paid toward commercial auto premiums. Any amount you save on taxes, though, is money in your pocket and not Uncle Sam’s.
Claiming Commercial Auto Insurance as a Tax Deduction
Whether or not you’re able to claim commercial auto insurance as a tax deduction will depend on the specifics of your circumstance. In general, sole proprietors and employees can claim commercial auto premiums that are directly tied to their vocation and unreimbursed by an employer.
A certified public accountant (CPA) can help you determine whether your premiums meet all of the IRS’ criteria for tax deductions. There are several CPAs in Huntington and the surrounding communities.
If you’re able to claim your premiums as a tax deduction, you’ll need to fill out either a Schedule C, if you’re a sole proprietor, or Form 2106, if you’re an employee. The CPA you talk with can help you properly fill out either of these forms.
Talk with an Insurance Agent and a CPA in Huntington
If your job requires commercial auto insurance and your employer doesn’t pay for it, there’s no way to avoid purchasing a policy yourself. You can, however, reduce how much you end up spending on a policy. First, talk with an independent insurance agent to find a low premium policy, across Huntington and Hampden County. An independent agent will be able to show you all of the policies offered by insurers serving the area and help you choose an affordable one. Next, contact a CPA in town who can help you determine whether your premium payments qualify as a tax deduction. With both professionals’ advice, you may be able to get an affordable commercial auto policy.