Do you have homeowners insurance? If you’re a homeowner, you probably do. And it probably takes a lot out of your pocket. Wouldn’t it be great if you could save some money on this expense? Many people think so. That’s why they want to know if homeowners insurance is tax deductible.
According to the Internal Revenue Service, homeowners insurance is, unfortunately, a nondeductible expense, although it is be included in your property payments. You can’t itemize payments for insurance as deductions in your tax return.
There are, however, two instances in which you can deduct insurance payments from your home:
- Let’s say you use your home or part of your home for business. Based on the area of your home that you use for business, you may be able to deduct a portion of your homeowners insurance.
- If you are a landlord and claim rental income on your property, the IRS will allow you to deduct property insurance as a business expense on the portion of the home used for rental. The same goes if you own several properties and use them only for rental income. However, in this situation, all of the homeowners insurance is tax deductible.