As with any insurance policy, the amount you spend annually on your home insurance policy is not tax-deductible. However, if you claim on your home insurance policy and receive a reimbursement, that amount is tax-deductible. Keep excellent records to ensure you have all the necessary documentation for your home insurance claim. Contact Smith Insurance Agency of West Virginia for questions in Kingwood, WV.
Know About the Tax Deductibles
Though the IRS does not currently offer a deduction for home insurance, it may be possible for you to deduct other expenses related to your homes, such as property taxes, mortgage interest, or utility bills. To claim these deductions, you must meet specific requirements, such as the amount of your income versus your expenses. To learn more about these requirements, visit the IRS website at irs.gov.
The Internal Revenue Service (IRS) requires home insurance policies to be bona fide and tax-deductible. To be bona fide, the insurance must be for something that has financial value and be covered by the policy. Common examples of non-deductible home insurance may include earthquake or flood insurance, certain types of liability insurance like workers’ compensation, car insurance, and life insurance.
The Internal Revenue Service (IRS) specifies that only certain types of home insurance are tax-deductible. The most common types of home insurance tax-deductible include: Mortgage interest — Interest paid on your home loan is usually tax-deductible.
Most policies have an annual premium, and it is best to keep track of these expenses throughout the year to ensure you don’t miss out on a tax deduction. You may also have to fill out a form (Form 1040) to deduct certain expenses that exceed 10% of your adjusted gross income.
To be eligible to deduct home insurance premiums on your taxes, you need to have a valid reason for buying it – like a significant risk to your property if you don’t have insurance. You can’t deduct the cost of a policy that only covers your health care expenses or a policy that covers a liability you might have if someone is hurt on your property. For help, call Smith Insurance Agency of West Virginia if living in Kingwood, WV.