Are insurance deductibles tax deductible? This question comes up frequently. As with everything in the tax world, the answer is “maybe.”
Health insurance deductibles are counted along with other medical expenses and may or may not be deductible, depending on if the total of all medical expenses exceeds 7.5% of your income.
It’s more complicated when the deductible relates to personal property such as damages to roof shingles on a home after a storm.
Damage to your roof from a storm is considered a casualty loss. The amount of casualty loss deduction depends on a number of factors, including your basis in the home, its market value prior to the storm, its market value after the storm, and the amount of reimbursement received from insurance policies.
Deductibles could factor into the calculation, too, if everything is reimbursed by the insurance company except for the deductible. But remember, personal casualty losses are reduced by $100 and then by 10% of your income. So if you have $50,000 of income, you would have to have paid more than $5,100 ($100 + 10% of $50,000) of insurance deductible in order to take a casualty deduction at all.
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”