I currently have pretty basic car insurance (because I’m poor), but my job sometimes requires me to drive participants in my personal vehicle. There is a certain, minimum level of insurance required. $30,000 per person, $60,000 per accident and property damage coverage in amounts not less than $25,000. Because this is a work required expense, can I write off my car insurance on my taxes?
I don’t know about auto insurance in specific - but unreimbursed business-related expenses in general can be deducted.
However, they have to exceed a certain percentage of your income. 2%, according to Personal Finance Advice and Information | Bankrate.com. So if you earn 50,000 a year, the expense would have to exceed 1000 a year. And it’s apparently only useful if you itemize (the link didn’t mention whether there was any provision for such expenses for folks who don’t itemize).
If you do wind up doing this, keep good documentation of what your premium would be with and without the required liability figures, and a hard copy of the work policy that states you have to have that limit.
That said: 30,000 etc. are not especially high limits (my own job requires 300,000 in coverage); do they really exceed whatever state-mandated liability insurance you must carry? And, it’s possible the IRS, on audit, would disallow most of the deduction using the argument that, say, 90% of your driving was done for personal reasons, so only 10% of that premium difference would really apply as a business expense.
Business use of a personal vehicle is potentially deductible. You have a choice of deducting actual expenses (including insurance) multiplied by business miles divided by total miles (i.e. a pretty small percentage for most people) or the standard mileage rates (55 cents/mile currently). As an employee, these are limited to the amount over 2% of AGI and listed with other itemized deductions. For most people, there’s no real deduction.
I do not see that an extra insurance rider would change the default situation. The extra rider would just be added to your actual expenses.
My recommendation is to request that your company reimburse you either for the insurance cost or based on the mileage rate.
Ditto everything that Dracoi said.