Can I take homeowners insurance and deduct it from my taxes?
A tax deduction is simply the amount that you have to pay at the end of a tax year for your overall income over the year. It’s the job of the Internal Revenue Service (IRS) to evaluate your overall income over the year and determine how much you will need to pay.
However, you are allowed to claim some of your taxable income when filing, this will reduce the overall amount you will need to pay, and you will be able to use the money for something else.
There are two basic types of deductions that you can claim: a standard deduction and an itemized deduction. A standard deduction is a fixed amount that is calculated by your filing status. An itemized deduction is determined by listing how you spent your money over the year.
Tax-Deductible Home Insurance Policies
One of the questions that a lot of people that are interested in acquiring a home always ask is that is homeowners insurance tax deductible? And as I mentioned earlier, some cases allow you to claim deductions from your taxes.
One of the few exceptions is if you have a rented property, you can deduct the payments from your taxes which can be claimed as an itemized deduction. Your landlord insurance should also cover your liability and hazard expenses.
Also, if you run your business from your home or maybe you have a part of your home that you are using as an office, you may be able to claim deductions from your taxes. The IRS allows citizens to list certain expenses and utilities as itemized deductions.
Other Tax-Deductible Home Insurance Considerations
There are other few considerations which include mortgage, federally declared disaster, and health reasons. If you acquired your home after December 15, 2017, the IRS allows you to deduct the interest paid on your mortgage insurance; all you need to do is file the interest as an itemized deduction.
In the case of a loss experienced by a federally declared disaster, although you will not be able to get any claim on your taxes, however, you can get part of the settlement from your insurer and you will be able to deduct the rest from your taxes. IRS also allows citizens to deduct taxes on medical costs as itemized deductions.
No one loves paying more than necessary, it is always economically reasonable to have a reputable insurance company. Always consult your insurer or tax expert on how you can save more.