When tax season rolls around, many homeowners look for every possible deduction to lower their taxable income. One common question is:
Can you deduct homeowners insurance from your taxes?
The answer depends on how your property is used. While most homeowners can’t deduct their insurance, there are a few important exceptions where you can. Let’s break it down.
❌ Homeowners Insurance Is Not Deductible for Personal Residences
If your home is used solely as your primary residence, your homeowners insurance is considered a personal expense—and personal expenses are not deductible on your federal income taxes.
This includes premiums for:
- Homeowners insurance
- Personal liability insurance
- Earthquake or flood insurance
- Renters insurance (if you’re renting and not using the property for business)
Bottom line: If you’re a typical homeowner not using your home for business or rental purposes, you won’t be able to deduct your homeowners insurance premium.
✅ When You Can Deduct Homeowners Insurance
There are some key scenarios where part (or all) of your homeowners insurance can be tax-deductible:
1. 🧑💼 Home Office Deduction
If you’re self-employed and use a portion of your home regularly and exclusively as a home office, you may qualify for the home office deduction.
What this means:
You can deduct a percentage of your homeowners insurance based on the square footage of your home office.
📌 Example: If your home office takes up 10% of your home’s total square footage, you could deduct 10% of your homeowners insurance premium.
Note: This deduction only applies to self-employed individuals—not W-2 employees working from home.
2. 🏘️ Rental Property Insurance
If you own a rental property, homeowners insurance becomes a deductible business expense. This includes:
- Landlord insurance
- Hazard coverage
- Liability protection
- Loss of rental income coverage
You can deduct 100% of the premiums on your Schedule E when you file your taxes.
3. 🏢 Mixed-Use Properties or Duplexes
If you live in part of your home and rent out another section (like a duplex), you can deduct the portion of the homeowners insurance tied to the rental unit.
🔎 What About HOA Fees?
If you live in a property managed by a Homeowners Association (HOA), and your dues include insurance coverage, that portion may also be deductible if the property is rented. Again, this only applies to investment or rental properties.
🧠 Final Thoughts
For most homeowners, homeowners insurance isn’t deductible. But if you run a business from home, rent out your property, or own a mixed-use home, you may qualify for a deduction.
💬 Need Help With Rental or Business Insurance?
At Eugene C. Yates Insurance Agency, we understand how to structure insurance policies to protect your assets—and help you make the most of potential tax benefits.
Whether you own a home, a rental, or run a business from your property, we can customize coverage that fits your needs and budget.
📞 Call us today or request a free quote online.
Serving Sacramento homeowners since 1946—with dependable advice and affordable protection.