Can I deduct car payments and car insurance?

You can — but only if you don’t deduct your mileage! 

People who drive for work have two options when deducting expenses:

1) The actual expense method: You can deduct the cost of their actual car expenses (such as gas, maintenance, car payments, and a few others).

OR

2) The standard mileage method: You can deduct a standard amount for every business mile driven. The standard mileage rate for 2024 is 67 cents per mile. 

Stride will automatically calculate your mileage deduction for you based on the year in which you're driving.

If you deduct both your mileage and your car payments and car insurance, you’d be double-deducting the same expense (since the mileage rate includes the cost of gas and maintenance already).

Not sure which method is best for you? No problem. The mileage deduction typically gives the highest deduction, especially if you drive a lot for work.

That being said, you might as well track both your mileage and your actual car expenses. Then you can determine at the end of the year which expense method is best for you!