Can I Deduct Homeowners Insurance Premiums as a Business Expense?

Answer:
If you work from your home such as if you are

a self-employed individual who uses a dedicated space at your residential property, you may be able to deduct a portion of your homeowners insurance as a business expense. Before doing so, you must thoroughly explore this option to make sure you qualify to do make this deduction.

First, the area that you use must be used exclusively and regularly for business purposes. If you use a room in your home as an office where you conduct your business but you or your family members also use the room for other purposes, the home office does not qualify and you many not deduct the homeowners insurance premiums.

If your space does qualify, you can’t deduct the full amount of the premiums but rather a percentage in proportion to the size of the office in relation to the size of your home. For example, if the home office is 240 square feet and your house is 2400 square feet, you may be able to deduct 10% of your insurance premiums.

Before you begin measuring and deducting, you may also be limited as to how much you can deduct. If your gross business income from your home is less than your business expenses, you will be limited in what you can deduct. Because home office deductions are tricky, see your tax advisor before deducting your home expenses.


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