Checkmark iconCan I Write This Off?

Can I write off business insurance premiums for my small business?

TL;DR

Yes, you can generally deduct business insurance premiums for your small business.

Detailed Answer

Business insurance premiums are considered a necessary and ordinary business expense, and are therefore generally deductible. This includes insurance for property coverage, liability coverage, malpractice coverage, and even business interruption insurance. However, life insurance where you are directly or indirectly a beneficiary, or insurance to secure a loan, is not deductible. The insurance must be directly related to your business operations.

Where to Put It on the Tax Form

Schedule C (Form 1040), Line 15

Real World Example

A freelance graphic designer pays $500 a year for a business liability insurance policy. This $500 is a deductible business expense and can be written off on the designer's tax return.

Audit Risk & Documentation Tips

The risk of audit for this deduction is relatively low, but it's always important to keep accurate records. Maintain copies of your insurance policies and premium payment receipts. If you are ever audited, these will serve as proof of your deductible expense.

IRS Reference

IRS Publication 535 (Business Expenses)

Relevant Industries

Small BusinessFreelancersConsultantsRetailers

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 7, 2025

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