Did you know that if you have a home-based business, you may be able to deduct some of your home and auto insurance premiums from your 2017 taxes?
To deduct an insurance premium from your taxes, you’ll have to use the long form 1040 rather than the simpler 1040A or the 1040EZ. You’ll also need the Schedule C (Profit or Loss Form). You’ll need to decide whether to use a simplified method or the actual insurance expenses for both auto and home. This sounds a little complex, but we easily can help you with it. The extra effort could be worthwhile if you are looking for some additional savings on your taxes.
For business use of your car, the simplified method allows you a deduction of 53.5 cents per mile for 2017. You’ll need to have a record of all the expenses for insurance, fuel, repairs, maintenance and depreciation. The deduction is calculated on the percentage of total car expenses as well as the total number of miles you drive vs. the number of miles driven for business.
Incidentally, if you’ve received a payout from your insurance company for damages to your home or car, these are usually not taxable unless it’s a large amount, worth more than what you paid for the property. Along the same line, if you had an insurance payout that was significantly less than the actual expense of the damage, you could be eligible to take a deduction for the loss. Likewise, a theft can be written off it if exceeds 10 percent of your adjusted gross income.
To get a jump on your 2017 tax planning, give us a call! Tushaus & Associates, LLC has been providing quality accounting and income tax services since 1965.