Your pay a lot of expenses when you own a home, many of which you can deduct on your taxes. Even with the latest tax reform, there are still many tax deductions available which help homeowners decrease the cost of owning a home.

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One expense you cannot deduct, however, is hazard insurance. Your home insurance premium, deductible, and co-insurance are your responsibility – you cannot deduct them on your taxes. However, just like most tax laws, there are a few exceptions that may apply to you.

DO YOU HAVE A HOME OFFICE?
If you have a home office, you may be able to deduct the portion of the home insurance that covers the office itself. You will have to talk with your tax advisor to find out how much of your home qualifies for the tax deduction. Your home office is the part of the house that you use exclusively for your business – you don’t use it for living purposes. You can deduct the portion of your home insurance that correlates to this percentage. For example, if 20% of your home is your home office, you can deduct 20% of your home insurance on your taxes as a business expense.

Your tax advisor will inform you that the home office must only be used for business. For example, if you use a separate building attached to the house for your business, you must not use it for any other purpose. The IRS considers home insurance an expense of having a place to live, and like utilities, you cannot write it off. If you prove you use the area solely for business, though, it becomes a business expense.

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DO YOU HAVE A RENTAL PROPERTY?
Like the portion of your insurance that you could write off for your home office the IRS allows you to write off insurance on rental properties. The amount of the premium you can write off depends on what you are renting. If it’s a portion of your house, you can only write off the portion of the insurance that covers that part of the home. If you rent out an entire property, you can write off the entire homeowner’s insurance premium.

DID YOU EXPERIENCE A NATURAL DISASTER?
If you live in an area that experienced a natural disaster, such as Hurricane Katrina, you may be able to write off some of your loss. The loss must be due to the federally declared disaster. While you can’t directly write off the insurance premiums, you can write off the portion of the damages that you had to pay because your insurance wouldn’t cover it as well as the deductible you paid for the insurance coverage.

Hazard insurance is a necessary expense, especially if you have a mortgage. While in most cases, you can’t write it off on your taxes, it helps protect you financially should you face disaster. If any of the above situations apply to you, though, take advantage of the deductions and enjoy the tax savings.