Business Insurance and Taxes:

Each time tax season rolls around, the question of what is and is not deductible for insurance coverage comes up. In order to make sure that you are utilizing all of your available deductions, and avoiding potential problem areas, you can save money on your taxes and reduce worries over potential tax problems.

Here are some tips to assist you in determining your deductions. It is a good idea to provide your tax preparer with this list to ensure that they are utilizing all of your deductions as well.

1. Don't forget your commercial vehicles. If you have vehicles that are for company use and you opt to deduct actual expenses instead of mileage, you may be able to deduct your vehicle insurance costs. Since only one of the above options can be used, it is a good idea to figure up both amounts, your actual expenses and the mileage, to see which one will allow you the best deduction. If you pay high insurance premiums for commercial insurance, you may be best served by selecting the actual expenses option.

2. Don't forget your health care and long-term care premiums. If you are self-employed, you are allowed to deduct 100% of your costs for health and long-term care not only for yourself, but your dependants and spouse. However, this deduction may only be used if you or your spouse is not covered by a company health plan.

Business can typically deduct the premiums that they paid for their employees' health insurance coverage under a group plan. If you have questions on your allowed amount for this deduction, contact your group plan administrator for more information.

3. Don't forget moving expenses. If you had to move your business location, the costs for moving can be deducted.

4. Don't forget your medical expenses. If your income is below a certain amount, you may be able to deduct not only your health insurance premiums, but your actual expenses for your medical care. Check with your tax preparer or the IRS to see if you are eligible for this deduction.

5. Don't forget to amend past tax returns. If you failed to take one of the above deductions, the IRS will allow you to amend your tax return for up to three years if you have a qualifying deduction that you neglected to include. This can mean significant savings.

6. Don't deduct losses that were covered by your insurance plan. If you have property insurance you cannot deduct the losses you experienced from damage or theft if the insurance company provided you with reimbursement.

7. Don't report worker's compensation benefits as income. If you have received benefits from worker's compensation coverage this should not be reported as income. This also includes child support payments, welfare and veteran's benefits and any cash rebates you received over the course of the year.

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