Flood insurance, along with premiums for other common forms of personal insurance like homeowners, don’t qualify as a tax-deductible expense. These include premiums for life, automobile, and home insurance. That being said, flood insurance premiums may be a tax deduction for commercial properties (i.e., real estate used for business purposes or generates rental income).
Exceptions for home-based businesses
While you usually can’t deduct the flood insurance on a personal home, you may be able to if you run a business out of your home. According to the IRS, explanation about use your home for business may make certain expenses deductible, including:
-
Real estate taxes.
-
Insurance.
-
Mortgage interest.
-
Rent.
-
Utilities.
-
Maintenance.
-
Repairs.
You can’t deduct these expenses in their entirety – just the portion specific to your business. The IRS also lists six at-home business practices that make these deductions allowable. Ultimate, you’ll want to speak to your tax consultant to make sure you’re eligible to deduct any of your business expenses.
