These policies are not considered deductible expenses by the IRS. The other qualifying entity for homeowners insurance tax deductions is landlords. If you receive rental income from your home, you may be able to deduct a portion of your homeowners insurance policy on your tax return for the area of the home being used as a rental.
The same rules apply here as they do for home offices: Take the square footage used as rental space and divide it by the total square footage of your home. Apply that percentage to your premium to find the total qualifying deductions for your homeowners insurance policy.
If you own and rent out several properties and the properties are only used as a source of rental income, you may be able to deduct the total amount of homeowners insurance from your tax return.
Consult with a Certified Public Accountant CPA to understand whether or not your homeowners insurance is tax-deductible for your specific circumstances. Mortgage insurance and homeowners insurance are different things. While homeowners insurance protects your property, mortgage insurance protects you in case you are unable to make your mortgage payments. Mortgage insurance premiums may be deducted from both your personal home and rental properties; however, income restrictions apply.
However, this deduction is only available if the property loss occurred in a federally declared disaster area. Real estate taxes, like mortgage insurance premiums and personal property taxes, are itemized deductions. If you take the standard deduction, you cannot deduct property taxes from your tax return. Unfortunately, there are no tax benefits available for those working from home due to the COVID pandemic.
However, if you have a small- or mid-sized business, you may be able to qualify for certain tax benefits for businesses , such as paid leave for workers. How We Make Money. Carly Severino. Written by. Carly Severino has two years of experience in writing for insurance domains such as Bankrate.
She has experience covering a …. Edited By Aylea Wilkins. Edited by. Aylea Wilkins. Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been …. Share this page. Bankrate Logo Why you can trust Bankrate. We guide you throughout your search and help you understand your coverage options.
We provide up-to-date, reliable market information to help you make confident decisions. There are some income tax deductions that are specific to home businesses and not all home businesses qualify. If your home is used as your principal place of business to earn income, meet with customers or patients, you may be eligible to claim business-use-of-home-expenses.
However, it is important to note that you can only claim a portion of the expense. Gather all of your home office expenses such as electricity, property taxes, heating, phone, internet, repairs, and your home insurance and calculate your deductible business portion.
Now you know if you are eligible to claim your home insurance on your taxes. To save on your home business insurance, speak to a member of our experienced team. Get a free, no-obligation quote for your home insurance today. All financial goals ». Investing insights.
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