Real Estate Agents can deduct many forms of insurance on Schedule C, Profit and Loss from Business. This article will discuss premiums deducted on Line 15 of Schedule C, Insurance (other than health). It will share some forms of coverage deducted on different lines of Schedule C and provide an overview of self-employed health insurance. This article also covers types of insurance not deductible on Line 15, and one form of coverage an owner should not deduct, even when allowed.
Insurance (other than health), Line 15: Several forms of insurance are deducted as Insurance (other than health). Deductible policies protect the business from losses related to business errors, property damage, accidents on business property, and other unforeseen mishaps. Here’s a brief overview of insurance deducted on Line 15:
Insurance NOT Deducted as Insurance on Line 15: Several forms of coverage are deducted other lines of Schedule C or other areas of the agent’s tax return, and not on Line 15. Here are a few:
Insurance You Do Not Want to Deduct: Disability Insurance: The treatment of disability premiums has a direct impact on the taxability of benefits paid by the policy. If the business pays the premiums tax-free for an employee’s policy, any benefits received are COMPLETELY TAXABLE to the insured. Benefits are also taxable when premiums are deducted from an employee’s pay pretax (as through a cafeteria plan). If, on the other hand, business-paid premiums are added as income to the employee’s W2 or paid by the employee with after-tax dollars, benefits received by the insured employee are TAX-FREE.
Premiums paid for an owner’s disability policy is not deductible on Schedule C or as a Self-Employed Insurance adjustment on Form 1040. Mistakenly deducting these payments can result in benefits being taxable.
Take Away: Many types of insurance paid by a real estate agent for their business are deductible as Insurance on Schedule C, Line 15. Other business policies are deducted elsewhere on Schedule C. Premiums paid for the owner’s health insurance are deducted as an adjustment to income on Form 1040. One should refrain from deducting disability insurance premiums or paying them with pre-tax dollars. Doing so may result in policy benefits being taxable.
Summary and Invite: We hope this article helped you to understand the costs deductible on Line 15 as Insurance. If you’d like to learn more about cutting your most significant expense, TAXES, check out our Real Estate Agent Tax Cut Library. The Real Estate Agent Tax Cut Library includes over eight hours of video broken into twenty-nine searchable volumes and covers every possible deduction a Real Estate Agent can take on their tax return. Our Broker Version will help your entire agency cut their taxes! We also invite you to browse our courses.
All courses and articles are for informational purposes only and do not constitute tax advice. Taxes are complicated - do not act on course information without consulting a professional. Always refer to treasury regulation before making any tax decision. Read the full disclaimer.
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