Owning a home is often one of the more expensive facets of your life. Luckily with the many tax breaks available, you can find ways to save money.
Homeowner’s insurance is one of the many expenses associated with owning a home. While you typically cannot deduct this insurance from your taxes, there are other deductions you can claim on your home. Deducting these expenses is easy as long as you keep track of them throughout the year and itemize your taxes.
What Is a Tax Deduction?
The amount you pay in yearly income taxes is the percentage of taxable income based on your tax bracket. A tax deduction lowers your amount of taxable income. To claim a tax deduction, instead of subtracting the deducted amount from your taxes, report less income than you expected to earn. For example, if you earn $50,000 a year and claim $2,000 in tax deductions, you would pay income taxes for the $48,000 income bracket.
How Homeowner’s Insurance Is Tax-Deductible
While you cannot deduct homeowner’s insurance as a whole from your taxes, there are certain instances where you can deduct part of it. These instances include:
- You run a business on your property: If you run a small business such as lawn care, your homeowner’s insurance may cover a portion of it. If you run a larger business such as a daycare, you would not deduct homeowner’s insurance and may need to take out a commercial policy.
- You work from home: If you work from home and have a designated home office space where you do your work, you may be able to establish this space as tax deductible from the home’s total square footage.
- You rent part or all of your home: If you rent part of your property, then the leased square footage is tax-deductible. If you own multiple rental properties, then the entire homeowner’s insurance policy is tax deductible for these properties.
Seven Additional Tax Deductions for Homeowners
Along with the tax deductions listed above, here are seven other areas where you can receive a tax reduction on your home:
- Mortgage points
- Mortgage interest
- State and local property tax
- Home improvement
- Energy efficiency
- Medical home improvement
- Capital gains tax exclusion
Contact Strock Insurance Today!
Strock Insurance provides low insurance rates and quality coverage to our customers. With locations in Camp Hill, Harrisburg and Lebanon, we’re ready to help residents of central Pennsylvania find the perfect insurance plan. For a personalized homeowner’s insurance quote, contact Strock Insurance today!