If your home is used solely for your personal residence, then your homeowner’s 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 homeowner’s policy.
However, there are some exceptions and here are some instances to consider that could possibly make your homeowner’s insurance tax deductible.
Are you currently running a business out of your home? If you work out of your home, it’s possible that you may be able to deduct a fraction of your homeowner’s insurance costs from your gross income. The deduction is based on the square footage of the workspace in your house, which cannot be applied to a den or other area that serves as an occasional office.
Do you receive any 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.
If any of these situations apply to you, be sure to speak to your accountant or financial professional. They can help guide you in the right direction. If you are looking to obtain a homeowner’s policy, feel free to reach out to Nik at DPA Insurance Services at 402-682-1691 for a free quote.
