Van insurance is not tax-deductible unless you are using your van for specific purposes. This includes:
- Your van is used for your business.
- It is for business and personal purposes.
- You own an Airbnb and use your van for that.
- You are an Uber or Lyft driver and use your van for transporting.
Though van insurance is not generally considered to be tax-deductible, there are a few instances where it might be. In general, tax deductibles can be very complicated and confusing for most people.
This is why it may be worth the money to hire an accountant to help you figure out what your tax-deductible may be. This way, you can do your taxes confidently and know that you are doing everything legally and in your best interest.
Van Insurance Isn’t Always Tax-Deductible
For the most part, van insurance is not tax-deductible if you use that van for personal use. This also means that you cannot deduct the expense of buying a van from your taxes.
Tax deductibles are very specific things and must fit into the right categories. You cannot simply deduct just any kind of expense because it is there.
There are specific criteria that you must match to be able to deduct your van insurance from your taxes. These are very specific, so you have to make sure that they actually apply to you.
If you can deduct your van insurance from your taxes, you may find it to be well worth the time and hassle. This can greatly cut back on your yearly costs if you have tracked your expenses very carefully.
In many instances, it is a good idea to hire an accountant to either do the tax work for you or to at least look it over. This is complicated stuff, and it is easy to misunderstand it or try to get the wrong tax deduction.
If you do not understand tax-related stuff easily or do not know what deductions you apply for, an accountant can help you with all of that.
When Van Insurance is Tax Deductible
The rules about what is and what isn’t tax-deductible can easily become very overwhelming and confusing for most. Many of us only do this kind of tax-related work once a year and aren’t necessarily skilled at doing it.
That is why it is always good to start off knowing some of the basic rules, especially the ones that apply to you.
If you are trying to find out if your van insurance is tax-deductible, there are a few questions to ask yourself to find out. I will talk about those below so that you can figure out if any of these apply to you.
This should be pretty simple even if you aren’t tax-savvy, just find out if any of these options apply to you, and if they do, you qualify for tax deductions.
When It Is Used for Business
Just about any kind of business expense can be deducted from your taxes in one way or another. The same rule applies to a van that is used for business purposes.
This can be as marketing, transporting, or hauling. As long as it is used for business purposes, it can be deducted from your taxes.
Any cost in relation to your business van can be tax-deductible as long as you keep good records of those expenses. This includes repairs, maintenance, insurance premiums, and so on.
This can greatly add up over the year, and being able to deduct taxes from these expenses can be a huge help for business owners. Just make sure you can back up any expenses with proof just in case you are asked for it.
When It Is For Both Personal and Business Purposes
You can still claim tax deductions on van insurance that is used for both personal and business uses. This is very useful as many people will use their personal van as their business van half of the time.
This just makes the process a bit more complicated as you have to separate your van costs throughout the entire year. You cannot deduct taxes from any of your personal van costs as they do not apply.
You will have to separate your costs to find out what your business and personal expenses were. Then you can get tax deductions on the expenses for business that you had to pay throughout the year.
Even if you don’t necessarily use your van for business but occasionally drive for your employer, you can still deduct tax for these things. This is because doing so is not a personal task but a business one, this being tax-deductible.
There are several little loopholes like this that can help you deduct more business expenses from your taxes. This includes little expenses, such as driving to business meetings, attending conferences, and transporting business goods or coworkers.
When You Own an Airbnb or Rent
Another van insurance tax-deductible expense that might surprise you applies to Airbnb owners. This will not apply to all Airbnb owners, but some may benefit from it.
You can claim tax-deductible expenses as an Airbnb owner if you have van expenses in relation to your Airbnb work. This would often include driving to the Airbnb location to either clean it, decorate it, or otherwise upkeep it for guests.
This also applies to people who have property for rent, such as land or housing. If you regularly make trips to that location for any kind of upkeep or to check on renters, you can get tax deductions.
The downside to these tax deductions is that the likelihood of them adding up substantially, is very minimal. These are most likely short trips and will not add up to many gas or vehicle expenses.
Depending on how often you drive to these locations, it may not even be worth keeping track for tax deductions. Not unless you believe you can get a substantial return on those expenses.
Uber and Lyft Drivers
Many Uber and Lyft drivers, as well as other types of transportation services, are able to claim tax deductions on their van insurance.
It is important to keep in mind that certain states within the U.S. require these kinds of drivers to have special insurance. This is often called rideshare insurance and is designed to protect the driver and passengers more than normal vehicle insurance.
Whether or not you are required to have this kind of insurance will dictate whether or not you can get tax deductibles.
You will also have to keep track of your professional driving expenses vs your personal driving expenses. This is because many drivers like Lyft and Uber drivers use their personal vehicle for their work.
This makes it a little more complicated as you have to divide the personal from the business expenses. You cannot deduct personal van expenses from your taxes, they must be work-related in some way or another.
Because of this, it is a good idea to invest in a car accessory that will track your gas and miles. This will greatly help you keep track of your work-related expenses to deduct from your taxes.
Common Van Insurance Tax Deductible Things
If you are still not completely certain what kinds of things are tax-deductible for your van, there are several things that may apply to you.
When it comes to vehicles, we have many expenses to take care of. This is especially true with vehicles used for business purposes as they can often be put through more wear and tear.
Some things that are often tax-deductible for vehicles include:
- Vehicle repairs
- Gas and oil
- Tolls and other parking fees
- Garage rent
- Lease payments
- Registration fees and licenses
- Vehicle maintenance
These are some of the common van-related expenses that you can expect to get a tax deduction for. As with any tax-related deductions, it is critical that you save all receipts or proof of the expense.
If you don’t do this, you will have no proof and will not get reimbursed even if you did have to pay for the expense.
These also do not apply to vehicles for personal use; if you use your van for business and personal use, you may be able to get away with still having a tax deduction.
Van Insurance is Sometimes Tax Deductible for Self Employed People
Since many people who use their van for professional purposes are self-employed, these tax deductions usually apply to self-employed people as well.
This would include anyone who does not have an employer or anyone to give them tax papers for their business expenses. Being self-employed, you will be held even more accountable for keeping stellar records of your write-offs.
Typically, people who are self-employed should hold onto their records for a minimum of three years just in case the IRS ever asks for proof of their business expenses. They do this to avoid people getting away with unnecessary tax deductions that do not apply or are not legal.
Though understandable, this can make getting tax deductions for your van insurance quite complicated. That is why it is important to keep a clear record of your van’s business expenses, as well as to understand what is and isn’t deductible for you.
This is why it is highly recommended that those who work for themselves hire an accountant. This will help them find those legal loopholes and do everything legally.
It is an added security measure to help you do your taxes the right way.
Commuting Expenses are Not Usually Tax-Deductible
Even if you use your van for business purposes, you cannot include commuting in your tax report. Commuting is not covered and cannot be used as a tax-deductible in most instances. Only in certain situations is commuting ever considered a deductible expense.
Even though it may seem like commuting to and from your business is a business expense, it isn’t. This is why commuting is not usually tax-deductible, whether your van is a business van or used for other purposes.
This includes Uber and Lyft drivers, as their personal commuting will not be considered a business expense.
In order for it to be tax-deductible, it has to be a true business expense, such as driving to a location for work or to a conference. It does not cover driving to and from work since that is a daily commute, which isn’t necessarily a business expense.
You Have to Keep Good Records
An important thing to remember with any kind of tax deduction is that you need to have proof. You may not always have to show this, but you never know when the IRS may want you to show proof of your expenses.
This can get you into a great deal of trouble if you have not been keeping track of all of your records. Records should be held for about three years just in case.
You will want to keep an accurate driving record throughout the year to record them for tax deductions. One of the best ways to do this is to buy some kind of vehicle accessory that tracks your miles and gas.
These are common for businesses that reimburse their employees for driving expenses. This is especially useful if you use your van for personal and professional uses as you can keep track of them more accurately.
If you do not use your van for many trips that could be deductible, you may be able to simply write it all down as you use your van. This isn’t as precise but is still considered a reliable record of your expenses.
Van Insurance Tax Deductions are Done Through a Schedule C Tax Form
It is important to know that those who are self-employed will have to fill out a different form than those who got a W-2 from their employer. Even if you got a form from an employer, you can still have tax deductions if you drove a van for business purposes.
If you are self-employed, you will need to fill out a Schedule C tax form and attach it to your tax return. This will allow you to track and document van insurance costs as well as some other vehicle-related expenses.
This is how you will get your tax deductions for your van insurance if it is used for business uses in any way.
Just remember that you cannot claim tax deductions on vehicle expenses that your employer reimburses you for. If they reimburse you, those expenses no longer apply for tax deductions.
It Is A Good Idea to Hire an Accountant
No matter what kinds of tax deductions you are allowed with your van insurance, it is always a good idea to cover your bases. If you are confused by all of the loopholes and rules around these kinds of tax deductions, you may want to hire an accountant.
An accountant is going to understand all that there is to know about van insurance tax deductions and the rules that apply. They will be able to keep you from making any mistakes or missing out on any deductions that apply to you.
Many people try to avoid hiring an accountant as it is just one more extra expense to have to pay at the end of the year. But it could very well be worth the expense if they can help you get better tax deductions.
Hiring an accountant will also act as a safety precaution in making sure that you are doing everything legally. This is very important and can help you sleep better at night knowing everything was filed correctly.
Some accountants even file away your records and hold on to them for the future. This can act as an extra security measure if the IRS ever needed those records.
Speeding Tickets Are Not Tax-Deductible
One important thing to note is that speeding tickets are in no instances tax-deductible, even for business vehicles. This is because they are not a business expense and cannot be covered.
This is a good example of how not all van expenses will be tax-deductible despite your van being a business van. Even if it is used for business purposes, deductions only apply to strictly business-related expenses.
If you were to take your business van for a drive to get lunch, that isn’t going to be covered because it was a personal trip. The same rule applies to a speeding ticket, as it is not a business expense.
This can make tax deductions for van insurance feel more complicated, but it just takes a little thought to work through it. As a rule of thumb, if the expense does not apply to business, it is not tax-deductible.
You will significantly save yourself time doing taxes if you remain realistic about what you can actually deduct from your taxes.