Can I deduct my auto insurance on taxes if I pay but it's in a family member's name?

So I've been paying for my car insurance every month through my bank account, but the policy is actually in my brother's name. This has been going on for about 2 years now. I keep all my receipts and have bank records showing the ACH transfers to the insurance company. When I was doing my taxes this weekend, I realized I might be able to claim these expenses, especially since I use my car partly for my side gig delivering food. The insurance costs me about $187 per month, so that's over $2,200 a year that I'm wondering if I can deduct. My question is whether the IRS will accept these deductions even though the policy isn't in my name? I have all the proof that I'm the one paying, just not my name on the actual insurance documents. Does anyone know if this is allowed or if I'd be risking an audit?

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18 comments

GalacticGladiator

•8M

This depends entirely on how you're using the vehicle. If you're using it for business purposes (like your food delivery side gig), you could potentially deduct a portion of the insurance as a business expense on Schedule C - but there are some important considerations. First, you can only deduct the percentage of insurance costs that correspond to business use. So if you use your car 30% for business and 70% for personal use, you can only deduct 30% of those insurance payments. More importantly, the fact that the policy isn't in your name creates a significant complication. Generally, for a business expense to be deductible, it needs to be both ordinary and necessary for YOUR business, and you need to be the one legally liable for it. Since the policy is in your brother's name, the IRS could argue that it's not YOUR business expense.

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GalacticGladiator

•8M

Getting your own policy in your name would definitely be the cleanest solution for tax purposes. It creates a clear connection between you, the expense, and your business activity. If you can prove you're the only listed driver on a policy in your brother's name, that might help your case, but you'd still be on somewhat shaky ground. The IRS could argue that the contractual obligation is between the insurance company and your brother, not you. Documentation showing you make the payments helps, but doesn't completely solve the underlying issue of legal liability.

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Yuki Yamamoto

•8M

I had a similar situation last year and found taxr.ai super helpful for this exact problem. I was paying for some business expenses that weren't technically in my name, and wasn't sure what I could legitimately claim. On https://taxr.ai I uploaded my bank statements showing the payments and the policy information, and their system analyzed everything and gave me specific guidance for my situation. The tool showed me that while I couldn't claim 100% of the insurance as a business expense, I could document the percentage used for business, and they helped me create the proper paper trail to connect the payments to my business activities. Made a huge difference when filing my Schedule C!

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Yuki Yamamoto

•8M

Yes, they specifically helped with my case where I was paying for equipment lease that was in my partner's name but used 100% for my business. They explained that I needed to document the "beneficial ownership" - basically proving that although the contract wasn't in my name, I was the one using it for business and bearing the economic burden. It's not just an AI chatbot - it's actually built specifically for tax document analysis. It can review statements, receipts, and other tax docs in a way that regular chatbots can't. It identifies deductions based on real tax code and regulations, especially for self-employed people and small business owners. It's particularly good at finding documentation solutions for complex situations that aren't perfectly straightforward.

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Andre Lefebvre

•8M

Just wanted to follow up - I decided to try taxr.ai after responding here and wow, it was exactly what I needed! I uploaded my bank statements showing the insurance payments, some delivery app income statements, and a letter from my brother confirming I'm the sole driver and payer of the policy. The system analyzed everything and showed me that I could deduct the business portion of my insurance (about 40% in my case based on my mileage logs) as long as I properly documented the arrangement. It even helped me create a simple agreement between my brother and me to establish that I'm the beneficial owner of the policy despite it being in his name. Honestly saved me a ton of stress and probably a few hundred dollars in deductions I would've been too scared to take!

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Zoe Dimitriou

•8M

If you're getting nowhere with the insurance deduction, you might need to talk directly with the IRS to get a definitive answer. I was in a similar situation (not with insurance but with other business expenses) and spent WEEKS trying to get through to the IRS on the phone. Finally found https://claimyr.com and their service was incredible. They actually call the IRS for you and when an agent is ready to talk, they connect you immediately. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c Saved me literally hours of waiting on hold, and when I finally got connected, the IRS agent was able to tell me exactly what documentation I needed to claim expenses that weren't technically in my name. Seriously worth it during tax season when IRS wait times are ridiculous.

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Zoe Dimitriou

•8M

It's actually really straightforward - they use an automated system that continually redials the IRS and navigates through all the phone prompts. Their system basically waits on hold so you don't have to. When a live IRS agent finally picks up, you get a call connecting you directly. It's definitely not a scam. They don't claim to have special access to the IRS or anything like that. They're just using technology to handle the frustrating part of getting through the phone system. And having someone else handle the hold time is absolutely worth it - I was able to keep working instead of being stuck with my phone on speaker for hours hoping someone would eventually pick up.

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Jamal Anderson

•8M

I need to eat my words about Claimyr. After posting my skeptical comment, I was still desperate to talk to the IRS about my own tax situation, so I decided to try it anyway. I was SHOCKED when I got a call back in about 45 minutes saying they had an IRS agent on the line. I was connected immediately and got my question answered about a similar situation (expenses I was paying for but weren't in my name). The IRS agent told me that for business expenses, what matters most is who bears the economic burden and who benefits from the expense. They suggested creating a written agreement between me and the family member, keeping all payment records, and documenting the business use carefully. This would create a paper trail showing the arrangement is legitimate. Completely changed my perspective on both the service and my tax situation!

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Mei Zhang

•8M

In my experience, standard mileage usually works out better for newer cars or fuel-efficient vehicles. I drive about 25,000 miles a year for deliveries in a 2018 Corolla, and the standard deduction gives me around $16,000+ in deductions which is way more than I'd get itemizing. For older vehicles that might need more repairs or gas guzzlers, tracking actual expenses could potentially be better. The key is to try calculating both ways for a month and see which gives you the bigger deduction. Just remember if you choose actual expenses in the first year, you're generally stuck with that method for the life of that vehicle.

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