When it’s time to file your taxes, you likely look for every opportunity to make the process smooth and save money along the way. Understanding your eligibility for different deductions, including potential deductions from your auto and home insurance premiums, can help. Typically auto and home insurance premiums are not tax deductible, but there are few instances where you may be able to claim a deduction. In this article, we’ll dive further into those cases where car insurance and home insurance are tax deductible.
Is car insurance tax deductible?
If you use your car for personal use only, you likely can’t deduct your car insurance costs on your tax return. If you use your car for business-related purposes, though, you may be able to deduct some of your insurance premium. This is just one of the ways in which your care insurance premium would be tax deductible. Learn more about the different ways below.
When Car Insurance Can Be Tax Deductible:
There are a number of instances to claim your car insurance on your taxes. They include:
- If you use your car for business – Whether you’re self-employed and use your car for business purposes or your employer doesn’t reimburse you for expenses related to business use of the car.
- If you suffered a vehicle loss or theft – You may be able to claim loss deduction if your car was stolen or deemed a “total loss.” In order to qualify for this kind of deduction, you typically have to file a claim, ensure the accident wasn’t a result of your negligence, your insurance company cannot completely reimburse you for the loss, and your costs must be greater than $100.
Is home insurance tax deductible?
Home insurance is not usually tax deductible, but much like auto insurance, there are a few circumstances where it is. Knowing where you can claim a deduction on your home insurance can help you save money on the amount you owe after you file your taxes. Learn more about the opportunities to deduct your home insurance premiums from your taxes below.
When Homeowners Insurance Can Be Tax Deductible:
There are a couple instances where your home insurance can be tax deductible, including:
- If you rent out your home or are a landlord – Renting out a home is considered work (i.e. the income you generate is taxable) so spending money on a rental property can often count as a business expense.
- If you work from home – The amount deducted is calculated by determining what percentage of your house (in square footage) is used for work. Certain conditions must apply here and your workstation often has to be in a condensed, specified area of your home.
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