Is Homeowners Insurance Tax Deductible?

If your home is used solely for your personal residence, then your homeowners insurance is not tax deductible. According to the Internal Revenue Service, only private mortgage insurance can be deducted – and this does not apply to a homeowners policy.

However, there are exceptions. Here are some instances to consider that could, in fact, make your homeowners insurance tax deductible.

Exceptions that make homeowners insurance tax deductible

Do you run a business out of your home?

If you work out of your home, you may be able to deduct a fraction of your homeowners insurance costs from your gross income. The deduction is based on the square footage of the work space in your house, which cannot be applied to a den or other area that serves as an occasional office. Be sure to check with your accountant or financial professional to make sure your deduction is within legal guidelines.

Do you receive rental income?

If you have a tenant living on your property, you may be able to deduct property insurance for this part of your home as a business expense.

Have you submitted a theft or loss claim?

You may be able to deduct the difference between your insurance settlement and the cost of a loss, if you submit a claim for theft, damage or other type of loss. If the associated costs supersede your policy limit and you end up paying out of pocket for loss or damage, you may be able to deduct it on your taxes the following year. Your accountant or financial professional will be able to help you determine if your theft or loss claim qualifies for this deduction.

If any of these situations applies to you, speak to your accountant or financial professional. They can help guide you in the right direction.

Dan Zeiler

dan@zeiler.com

877-597-5900 x134