Are homeowners insurance premiums tax deductible?
Owning a home can be costly, however, there are certain tax deductions that you may be eligible for which can save you some money come tax season. As a homeowner, it’s important to know which parts of your home payment are tax deductible and which are not. Your tax attorney can help you answer these questions as well, however, here is a brief outline of what the IRS has published as acceptable and non-acceptable home-related tax deductions.
Your monthly home payment likely includes several expenses including real estate taxes, your mortgage payment (interest and premium), your homeowners insurance premium and possibly mortgage insurance. According to the IRS.gov, the only deductible portions of your home payment are your real estate taxes, mortgage interest and mortgage insurance.
Homeowners insurance on the other hand, is not tax deductible. Another non-tax deductible portion of your home payment is any amount you have paid to reduce your loan premium.
Here are some other home-related expenses that that IRS says are NON-deductible:
- Utilities such as water, heat and electricity
- Most closing costs that are paid when you purchase a home
- Deposits put down on a loan
For more information, visit the IRS.gov website or consult your tax attorney.