Written by Dylan Tate
Dylan Tate is an insurance content expert for SmartFinancial with 70+ articles about home, auto and life insurance under.
Edited by Dan Marticio
Dan Marticio is the content manager at SmartFinancial and has written 150+ articles across multiple insurance verticals.
Published February 29, 2024Expert Reviewed
Expert ReviewedOur panel of insurance experts has reviewed the content to ensure that our reporting and statistics are accurate, easy to understand and unbiased.
Editorial Standards
SmartFinancial Offers Unbiased, Fact-based Information. Our fact-checked articles are intended to educate insurance shoppers so they can make the right buying decisions. Learn More
You may be able to deduct various types of insurance premiums from your taxes including the amount you pay for car insurance, home insurance, health insurance, life insurance and more. However, these premiums are not universally tax deductible. Rather, you must meet certain requirements to qualify for an insurance premium tax deduction such as buying a policy that serves a business purpose.
Keep reading to learn more about when insurance premiums are tax deductible including what types of coverage you can write off and how you can know if you are eligible.
Key Takeaways
Multiple types of insurance are predominantly tax deductible for self-employed individuals such as auto insurance, homeowners insurance and health insurance. The below sections will go over the specific requirements for deducting certain types of insurance premiums and when you are allowed to deduct insurance costs even if you aren’t self-employed.
Each major type of insurance has its own stipulations set by the Internal Revenue Service (IRS) regarding when you can deduct the amount you pay in premiums from your federal tax return. Continue reading for a breakdown of the rules associated with several types of tax-deductible insurance premiums.
Car insurance premiums are tax deductible along with other vehicle expenses like gasoline and car repairs for self-employed people, military reservists, qualified performing artists and fee-basis government officials who use their vehicles for business purposes. [1]
If you use an employer-provided car to conduct commercial activities but don’t fit into any of those categories, then your vehicle expenses are only tax deductible if your employer doesn’t reimburse you for them. For example, you can’t write off commercial auto insurance on your taxes if your employer pays the premiums or if you pay the premiums but your employer pays you back. [2]
You can also deduct your vehicle expenses if you use your car for medical or charitable purposes or if you’re an active-duty service member using your car to move.[3] If you are eligible for a car insurance tax deduction, you have two options for deciding how much money to subtract from your taxable income:
Vehicle Use
2023 Standard Mileage Rate
2024 Standard Mileage Rate
65.5 cents per mile
67 cents per mile
Military moving use
22 cents per mile
21 cents per mile
22 cents per mile
21 cents per mile
14 cents per mile
14 cents per mile
Similarly, homeowners insurance premiums are tax deductible along with other expenses related to maintaining your home if you are self-employed and regularly use part of your home or another structure on your property exclusively as your main workspace. There are two ways to calculate your insurance deductions for taxes if you have a home office: [4]
In addition, you can deduct 100% of your landlord insurance premiums and other expenses related to maintaining a rental property unless the property is a vacation home that you personally use for part of the year. In this case, you must calculate the percentage of the year that you rent out the home at a fair rental price and only deduct that percentage of your rental property expenses on your tax return. [5]
If you are self-employed, your health insurance premiums are tax deductible in full as long as your business has a net profit for the year and neither you nor your spouse is eligible for an employer-sponsored health plan at any point during the year. [6][7]
Otherwise, you can deduct health insurance premiums and other medical expenses like out-of-pocket health care costs that exceed 7.5% of your adjusted gross income. [6] This includes Medicare premiums but generally doesn’t include employer-sponsored health insurance expenses since your share of the premium payment is usually subtracted from your paycheck on a pre-tax basis, meaning it isn’t ever part of your gross income. [8]
You may be able to deduct life insurance premiums from your taxes if you designate a qualified charity as both the owner and beneficiary of the life insurance policy. [9] However, these premiums aren’t tax deductible if the charity ends up paying any premiums and you or any of your family members end up as beneficiaries of the policy. [10]
For example, you may not be able to write off your share of the premiums after donating a life insurance policy to a charitable organization if your brother works there and his children are named as beneficiaries of the policy.
Since individuals can only write off insurance premiums for policies that serve a business purpose in many cases, it naturally follows that small business owners are allowed to write off numerous types of commercial insurance premiums. Specifically, the following types of business insurance are tax deductible: [11]
Dental expenses including dental insurance premiums are tax deductible in the same way as medical expenses. [6] Meanwhile, long-term care insurance premiums are also tax deductible for individuals but the amount you can deduct depends on your age. See the below table for a rundown of the amount of your long-term care insurance premiums that you can deduct at various age ranges. [8]
Age
Maximum Deduction
