Insurance Deductions and Expenses for Small Businesses

[roseline371274]

It always pays to know what tax deductions you can make as a small business owner. In fact, do you know if you are missing some deductions for the business insurance policies you carry?

Is business insurance tax deductible?
Generally, yes, according to the Internal Revenue Service. If you operate a for-profit business, "generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession."

"The most common mistake I see is that small business owners forget to new zealand phone number search deduct their self-employed health insurance," Gabriel Sandler, enrolled agent and financial advisor at Wolverine Tax and Financial, told business.com. "This can include out-of-pocket premiums covering their whole families, Medicare premiums, and even long-term care insurance."

Business owners don't often forget to deduct general liability insurance, Sandler said, "but it is important to remember that if you maintain a home office and use the actual expense method, a portion of your homeowners insurance should be included on Form 8829. … I do [also] often see small businesses with employees forget to deduct their workers' compensation insurance."

Unfortunately, as Sandler noted, disability insurance for yourself or your employees is not generally deductible.

Need help choosing an insurance provider?
Speak to a USA-based licensed agent for help navigating your insurance options and comparing the plans that best meet your needs.
Call anytime 24/7:

888-784-3754
 
 
What types of insurance payments (premiums) can businesses write off?
In general, you can deduct the following common commercial insurance policies, as listed in IRS Publication 535, Business Expenses.

General liability insurance: This covers third-party liability claims for injuries to other people.


Commercial property insurance: This covers loss and damage to your commercial business property due to fires, storms, and other causes.


Business owners policy: A business owners policy includes commercial liability, commercial property and business interruption insurance.


Business interruption insurance: This pays for lost profits if your business shuts down because of a fire or other cause.