Unfortunately, when it comes to tax season, homeowners won’t be happy to know that they won’t be able to deduct their insurance premiums. This includes any damage or liability coverage for their residences. However, it’s important to note that there are some exceptions to this rule. Let’s take a closer look at what you need to know about homeowners insurance and taxes.
Homeowners insurance premiums are not eligible for deduction on personal tax returns.
However, if the home is used for business purposes, then the premiums may be tax-deductible.
If a homeowner experiences property damage, such as a fire or flood, and their insurance covers the cost of repairs, then any money received may not be taxable.
In contrast, if the homeowner receives a payout for injuries or emotional distress, then that may be considered taxable income.
If a homeowner operates a rental property and purchases rental insurance, those premiums may also be tax-deductible when filing their taxes.
Overall, while homeowners insurance premiums themselves are not tax-deductible, there may be some exceptions based on certain circumstances. It’s always important to consult with a tax professional or financial advisor to determine what tax deductions you may be eligible for.