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Certain insurance products can be deducted on your taxes. But only under specific circumstances. For more information, visit the IRS site on insurance deductions or check in with your accountant.
As of 2020, you can deduct health insurance premiums and other healthcare costs that exceed 7.5% of your adjusted gross income on your personal income taxes. But you can’t deduct any healthcare costs before that, and you can’t deduct premiums your employer pays.
For example, if your adjusted gross income is $35,000, you could deduct any healthcare costs over $2,625, or 7.5% of your income. So if you pay $600 a month out of pocket for health insurance, you could deduct $7,200 for the year. But if you pay $300 a month and your employer pays $300, you’d only be able to deduct $3,600 for the year.
The exception is if you’re self-employed, in which case you can deduct premiums you pay for health, dental and long-term car insurance for you and your family. You can also get a premium tax credit for health insurance subsidies paid if your family meets certain income requirements, you lost your job due to global trade agreements or your pension plan qualifies.
No, you can’t claim life insurance as a tax deduction on your personal income taxes. But if you own a business and pay for life insurance for your employees, you may be able to deduct it — though it depends on who benefits from the policy.
This is true for all types of life insurance, including critical illness insurance, private disability insurance and term life insurance.
Sometimes. If you use your car for business purposes, you may be able to deduct some or all of your costs on your taxes. But if you use your car for both business and personal use, you can only deduct costs associated with the business use of your car.
You can generally either deduct specific expenses or you can figure out your deduction based on mileage.
Generally, no — but there are exceptions. If a dedicated part of your home is used for business, like a home office, you may be able to deduct part of your home insurance costs for expenses, repairs, utilities and home or renters insurance.
And if your home is damaged in a federally recognized natural disaster, like a hurricane, you may be able to write off expenses that your home insurance didn’t cover.
Maybe — but it depends on your adjusted gross income, when you took out your loan and what your expenses are. You’ll have to itemize your taxes to get this deduction. You can use the IRS online quiz to determine what mortgage-related expenses are tax deductible for you.
US tax laws are constantly changing and are a little different each year. While most types of insurance are only deductible if purchased for business purposes, it’s a good idea to look up the most recent tax guidelines on the IRS website and consult a professional if you’re unsure. And for up-to-date information, check out our guide to income tax deductions.
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