Scenario: It’s tax season. I paid $3,000 in premiums this year for my rideshare endorsement and gap coverage. I wanted to deduct it, but my TurboTax software asked if I used the “Standard Mileage Rate.” I was confused—does taking the mileage deduction mean I can’t deduct my insurance premiums? I called a CPA to get the definitive 2026 answer.
Key Takeaways
- Standard Mileage Rate Includes Insurance: Generally, if you take the Standard Mileage Rate (e.g., 71 cents/mile in 2026), that number includes depreciation, gas, repairs, and insurance. You cannot double dip.
- The “Business Portion” Exception: However, if you use the “Actual Expenses” method, you can deduct the business percentage of your premiums.
- Rideshare Endorsement is Unique: Some CPAs argue that the extra cost of the specific Rideshare Endorsement is a direct business expense, separate from the base policy, though this is a gray area.
- Commercial Policies: If you buy a full commercial policy, that is 100% a business expense (if 100% business use), and usually pushes you toward the “Actual Expenses” method.
The “Why” (The Trap): The Double Dip
The IRS sets the Standard Mileage Rate to simplify deductions. They calculate the average cost of owning a car, including insurance.
If you deduct 71 cents per mile AND deduct your $200 insurance bill, you are deducting the insurance twice. This triggers audits.
- Exception: Parking and Tolls are separate.
- Exception: Interest on the car loan (business %) is separate.
- Insurance? Usually bundled into the rate.
[IMAGE: Visual chart: “Standard Mileage Rate” bucket vs. “Actual Expenses” bucket]
The Investigation: CPA Advice
I spoke with a tax expert specializing in gig economy workers.
Question: “Can I deduct my rideshare insurance premium?”
CPA Answer: “If you take the Standard Mileage Rate, NO. It’s built in. If you take Actual Expenses, YES, but only the percentage you drove for business.”
Question: “What about the extra $20 I pay for the specific Rideshare Endorsement?”
CPA Answer: “Aggressive filers deduct this as a ‘Business License/Fee’ line item, arguing it’s a requirement to work, but conservative filers bundle it. The safest bet is to stick to the Standard Mileage Rate unless you drive a very expensive car with high premiums.”
Comparison Table: Deduction Methods
| Expense | Standard Mileage Method | Actual Expenses Method |
| Gas | Included | Deductible |
| Repairs | Included | Deductible |
| Insurance | Included | Deductible (%) |
| Loan Interest | Separate Deduction | Separate Deduction |
| Cleaning/Supplies | Separate Deduction | Separate Deduction |
Step-by-Step Action Plan
- Track Your Miles: This is more valuable than tracking insurance costs for 90% of drivers. If you drove 30,000 miles, that’s a ~$21,000 deduction. Your insurance cost is likely far less than that.
- Calculate Both Ways: At year-end, do the math. (Total Miles x Rate) vs (Gas + Insurance + Repairs + Depreciation). Pick the higher number.
- Label Expenses Correctly: If you buy “Optional Injury Protection” or “Legal Defense,” those are not auto insurance. Those are “Business Insurance” or “Professional Fees” and are deductible on top of mileage.
- Save Your Endorsement Page: If you are audited, you need to prove you actually had the coverage required for the business.
FAQ
Is the car wash deductible?
If you take Standard Mileage, no (it’s maintenance). If you pay a “Cleaning Fee” due to vomit, that is a specific business expense.
Can I deduct my health insurance?
Yes, as “Self-Employed Health Insurance” (Adjustment to Income), not on Schedule C, provided you made a profit.
What about my cell phone bill?
Yes, the business percentage is deductible on top of the mileage rate.