Can You Write Off Home Insurance?

Homeowners insurance might be a write-off.

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When it comes time to file your annual tax return, you'll gather information related to potential write-offs, also known as deductions. The cost of personal homeowners insurance is not typically a tax write-off. In some circumstances, however, you may be able to earn a deduction for your homeowners insurance.

Rental Property Exceptions

If you act as a landlord and claim a rental income on your home, the Internal Revenue Service will allow a partial deduction of your property insurance. The deduction will be based on the percentage of your home that is used as a rental property. If you own another residence or multiple residences that are used exclusively as rental properties, the full amount of your annual homeowners insurance policies on those rental properties can be written off as a business expense.

Home Business Exceptions

If you use a portion of your home as a business, the IRS will allow a partial deduction of your property insurance. The deduction is calculated using the percentage of your home space that is used for your business. Homeowners insurance is considered a legitimate business expense.

Casualty Loss or Theft Deductions

If you've made a claim with your homeowners insurance company for theft, environmental damage, fire or casualty, you could qualify for a deduction. Laws vary by state, but you may be able to deduct the difference between the amount awarded by the insurance company and the actual cost of your loss, if a gap exists.

Other Deductions

There are other insurance- and property-related deductions available to homeowners. If you pay private mortgage insurance, or PMI, you can deduct its cost. Property or real estate taxes charged by your municipality are also deductible. Other expenses related to your home business, such as utility costs, are deductible as well.