Is Homeowners Insurance Tax Deductible?
Property owners have many tax benefits; however, homeowners insurance isn’t one of them in most cases!
Unless your home includes rental property, you may not be able to deduct the cost of your home insurance for the purpose of tax reporting. If you own Rental Property, the Internal Revenue Service will allow the deduction of all property insurance as a form of business expense.
Dwelling Fire Insurance, Landlords Insurance, Hazard Insurance & Property Insurance are all synonymous as they relate to insurance provided in the eyes of the IRS.
In some areas of the country, homeowners feel it is prudent to provide coverage against the disastrous possibility of an earthquake. Although Earthquake Insurance is never inexpensive and always carries a hefty percentage based deductible, in the event of a total loss, it is most arguably a safe investment compared to the alternative.
Business Use of Your Home
If you rent out part of your home, you may be able to deduct a portion of your home insurance premium based on the declared business-use percentage area of the home. It is important to consult with your tax advisor who may be able to ensure that your deduction is correctly calculated and inclusive of any additional expenses such as property taxes, utilities and other expenses.
Theft or Casualty Loss Deduction
If you have suffered a loss with your property insurance for theft or damage of your property, you may be able to deduct the amount of any loss not covered by insurance; this may be inclusive of your deductible or any additional out of pocket expenses not covered by insurance.
If you are not a tax professional, it is advisable to consult with a tax professional or tax attorney well versed in the area of taxation in order to properly declare income and appropriate expenses as they apply to the current tax code.