It is once again tax time! And let's face it, there can be much confusion surrounding all the tax regulations, rules and laws, especially when it comes to homeowners insurance. While you can't deduct homeowners insurance premiums if your home is only for personal use, there are some situations that may make you eligible for some tax relief when it comes to your home. The specific situations are outlined below.
Home Office Tax Deduction: If part of your home is used as a home office, a portion of your homeowners insurance premiums may be deductible on the federal income tax return. Like with other home expenses that can be used for a deduction for a home office, the insurance premium deduction is based on what percentage of your home is used for the office space. Moreover, if you have a business insurance policy for your home-based business, those business insurance premiums can be fully deductible against the income of the business.
Deductible Payment Tax Deduction: If you've had home possessions that have been damaged or stolen and you were only partially reimbursed for the losses by your insurance policy, you may be eligible for a tax deduction on the remaining damages that you were not reimbursed for. Additionally, if you paid a deductible before the insurance policy made its contribution for the damaged or stolen items, you may be able to write off part of your personal monetary loss from the deductible payment on your federal tax return.
Casualty Loss Tax Deduction: If your homeowners insurance policy did not fully reimburse you for the damage, destruction or theft of your home and/or its possessions due to an accident, natural disaster or robbery, you may be eligible to claim a casualty loss tax deduction on your federal income tax return. In the case of theft, there are specific forms for the federal tax return that must be filed and there are certain stipulations that must be followed. Please consult with your tax adviser for these regulations. Additionally, any amount you are reimbursed from the insurance policy must be deducted from the reimbursement amount for tax filing purposes.
Having homeowners insurance is of great benefit to the protection of you, your home and your possessions all year round. It is important to know your specific policies in regards to your coverage for every day occurrences, as well as for year-end tax purposes. By understanding both the benefits and limitations, you can make sure to utilize all the options that are available to you during tax season.
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Sargeant Insurance is located in Los Angeles, CA. We specialize in personal and business lines insurance. Request a quote online by visiting our website at http://www.sargeantinsurance.com. Also, be sure to sign up for a monthly news, exclusive offers and tips at http://eepurl.com/tMPkL
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