Great question! Your insurance payments are deductible. Your car payments are less straightforward. You can’t deduct your monthly car payments, but you can depreciate the total cost of the vehicle over its useful life (5 years). Your vehicle might also be eligible for bonus or 179 depreciation, which means you could write off even more of it in the first year.
For more information, check out our guide to car depreciation here!
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Sarah is an Enrolled Agent with the IRS and has 6 years of tax and accounting experience. She's an avid hiker, animal lover, and self-proclaimed chocolate connoisseur.