If you're a business owner, tax time is likely causing you quite a headache. Getting all your expenses/receipts in order, knowing what tax breaks you qualify for and what you can deduct... the list goes on. While we're not accountants, we are insurance experts -- so we can help you out with one particular deduction. Namely:
Can I deduct my business insurance?
Yes. Yes you can.
According to IRS.gov, business expenses are the cost of carrying on a trade or business. These expenses are generally deductible if the business operates to make a profit. The IRS specifies that expenses that are "ordinary or necessary" are eligible for deductions:
Luckily for business owners, most business insurance is deemed as necessary as long as it's used "for the business's trade, business, or profession."
- Necessary: The expense must be helpful and appropriate for your business.
- Ordinary: The expense is common in your line of work.
What does this mean? Well, that you can usually deduct the premiums paid for:
Of course, each situation is unique -- and we recommend reviewing everything with your business accountant!
- General Liability Insurance
- Professional Liability Insurance
- Commercial Property Insurance
- Business Interruption Insurance
- Cyber Liability Insurance
- Workers' Compensation Insurance
- Commercial Auto Insurance -- you'll have to choose between this deduction and the mileage deduction
Sources: IRS.gov, Deducting Small Business Expenses | Insureon, Reminder: Small Business Insurance is a Tax Write Off | Zacks, Can I Deduct My Car Insurance on Mu Business Taxes?
Photo credit: Phillip Ingham