Home Business Insurance & Tax Deductions: Maximize Savings

If you own a home business, your home based business insurance will be tax deductible. Working from home provides a number of tax incentives including deductions of phone, Internet and portions of mortgage or rent. Do not forget to look into a few key areas of your insurance plan as well to find tax incentives.

Home Insurance Deduction

One obvious deduction will be portions of your home insurance. To determine what you are eligible, find out how much of your home is specifically dedicated to your workspace. To qualify as a workspace, the area must be the primary place you do business, and you must not have another office. If this is 10% of your home, then 10% of your home insurance can be deducted for home based business insurance.

Health Insurance Deduction

Employers can deduct the cost of employee health insurance from their taxes. Because you employ yourself, you may be able to deduct your own health insurance in a similar manner. If you hire your spouse or child, the home based business insurance deduction can apply to them as well.

Auto Insurance Deduction

Depending on how much you drive for work, your auto insurance may be deductible. If you use your car for 50% business-related activities, 50% is deductible. You should document your mileage and usage of your car as if you are running an expense report. This way, your home based business insurance tax incentives will be protected in an audit.