Tax deductions for insurance expenses?
As an insurance CSR, every year several insureds ask me for their expenses on home insurance and auto insurance policies. Yes, not commercial auto or commercial property, but personal-sounding expenses. Is there an itemized deduction for this stuff that I'm just not thinking of, or is there probably a vehicle being used for business, and a home office or investment property concerned?
it is likely a home based business they are using the deduction for. you can not use these items as deductions from wages earned as an employee.
There is not a personal deduction on the income tax return for home or auto insurance premiums. As you have indicated, you would have to be using the home or auto for business purposes to be able to deduct against a home business, employee business expense, or possibly a rental or investment property.
Laura H – H&R Block – Senior Tax Advisor 5
**This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.
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it is likely a home based business they are using the deduction for. you can not use these items as deductions from wages earned as an employee.
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this advice is worth every penny you paid for it
Sounds like they use their cars for personal/job/business like many people do. May have a home office as well so they're taking portions of the expenses. For example they aren't required to have commercial insurance on their personal car that may get used for running errands weekly for their boss, travel for their job, so it can be a misc. deduction on schedule A for unreimbursed employment expenses (if they have a lot of other misc. expenses and can exceed 2% of their agi then they can use it). Also, if they are self employed full time or part time or their boss requires them to maintain a home office away from work they don't need commercial property coverage – it's not commercial property – but they are allowed to take a portion of the personal insurance expense on their Schedule C or as a misc deduction on Schedule A depending on the circumstance. I could keep going with reasons personal insurance expenses could end up as a deduction on a tax return. So it's not necessarily people not having proper policies on their home/car.
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