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Owning a car is expensive. However, the cost of car insurance can be deducted from your taxes. Here’s how you can claim this on your tax return.
Frankfurt – Filling out the income tax return is a tedious task for many people. Taxpayers can often get some money back through the tax returnAnyone who prepares their 2024 tax return themselves should urgently meet the deadline for submitting the tax return in order to avoid a late filing surcharge.
If driving a car is already expensive due to high fuel prices, car owners must also prepare for rising premiums for motor vehicle liability insurance. However, according to the wage tax assistance association, vehicle owners can United Income Tax Assistance Association deduct certain costs of your car insurance from your taxes. There are a few things to consider here.
Driving a car is expensive – but certain costs of car insurance can be partially deducted from taxes (symbolic image) © Ivana Kojic/ Imago
Tax advantage: Which car insurance costs are tax deductible
Insurance offers protection – some of them are, according to the ADAC even “tax-privileged”. Third-party vehicle insurance is required by law, but partial or fully comprehensive insurance is voluntary. The price of a policy depends heavily on individual characteristics such as age, occupation, place of residence and the car.
Ten tax tricks: How to save money on your tax return
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According to the wage tax assistance association, motor vehicle liability insurance is tax deductible for private individuals. However, the part of the premium that relates to comprehensive insurance is not. This is because the tax office only takes into account policies that “cover the taxpayer’s personal life risks and thus fall under the category of ‘other precautionary expenses’,” writes the online portal lohnsteuer-kompakt.de.
Comprehensive insurance, on the other hand, refers to property insurance and therefore cannot be deducted from taxes. Exception: Self-employed people. In addition to liability insurance, they can also claim contributions from their comprehensive insurance.
Deduct car insurance from your taxes: These are your options
Where exactly vehicle owners declare their car insurance premium in their tax return depends on the employment relationship and use. According to the online portal, there are the following options:
- Special editions: If the car is used exclusively for private purposes, the motor vehicle liability insurance is deducted from taxes as a special expense. It is considered “other precautionary expenses”.
- Advertising costs: If the vehicle is used purely for business purposes, the vehicle liability insurance premiums are declared as business expenses in the tax return. The extent to which and up to what maximum limit you can deduct vehicle insurance varies from taxpayer to taxpayer.
- Vehicle used privately and professionally: Here, the liability premium for professional use falls under business expenses and the private portion falls under special expenses.
- Distance allowance: Trips to your home and your first place of work, as well as trips home as part of maintaining two households, can be claimed in your income tax return using the travel allowance. All travel costs are then covered by this. Car insurance can no longer be deducted as a business expense.
Anyone who uses the car as a self-employed person or self-employed person purely for business purposes must list the premiums for the car insurance as operating costs. The costs of comprehensive insurance can then also be deducted from the tax return. The prerequisite is that the vehicle has been included in the company assets.
Deduct car insurance from your taxes: These are the requirements
In order to declare motor vehicle liability insurance in the tax return, the following requirements must be met:
- You are both the vehicle owner and the policyholder.
- You have taxable income.
However, according to the wage tax assistance association, the costs for liability insurance, like contributions to health and nursing care insurance, are considered other precautionary expenses. This means that a maximum of 1,900 euros in annual precautionary payments can be deducted from taxes. For self-employed people, the maximum is 2,800 euros.
Tax return 2024: Tax relief for people with disabilities
In order to keep insurance costs as low as possible, it is worth it, according to the comparison portal Verivox Not only should you look at comparisons online, but you should also regularly check and adjust your existing insurance. This is an effective way to save money.
Also People with disabilities can deduct some of the costs from their taxes. Depending on the degree of disability (GdB), the amount of support varies. with a disability level of 50 total of 1140 euros in tax according to the United Income Tax Assistance Association be estimated. Also Parents caring for a disabled childcan also claim tax relief. (vw)
