Deducting insurance costs from your taxes

Many people don’t realise that they can deduct their insurance costs from their taxes and, in this way, save money. You can actually receive money back from the government for many insurance premiums. However, this does not apply to all insurance, instead for those that have personal insurance (health care or income protection) or due to occupational and/or vocational training requirements. You can’t deduct purely property insurance from your taxes, because this does not serve for the care or education of you and it is not something required to do your job.

INSURANCES THAT YOU CAN DEDUCT FROM YOUR TAXES

  • Insurance for health care & income security: e.g. health insurance, liability insurance, accident insurance, disability insurance or retirement insurance.
  • Insurances for occupation and education: e.g. Versicherungen für Beruf & Ausbildung: z.B. occupational insurance, occupational liability insurance, service liability insurance.

INSURANCES THAT YOU CANNOT DEDUCT FROM YOUR TAXES

  • Property insurances: e.g. household insurance, auto liability insurance, home-owners insurance, bicycle insurance, travel luggage or canceled flight insurance.

DEDUCTING CONTRIBUTIONS AS MARKETING COSTS OR MISCELLANEOUS EXPENSES?

In order for insurance contributions to apply, you need to know a few basics: There is insurance that covers occupational risks and then there is insurance that covers occupational and private risks. These two categories are critical for knowing if you have contributions that you can deduct either as marketing costs or miscellaneous costs from your taxes. A more detailed look in the following.

INSURANCE FOR OCCUPATIONAL RISKS → ADVERTISING COSTS

  • Occupational liability insurance
  • Accident insurance (for accidents that happen while at work)
  • Legal insurance (only for labor law)

INSURANCE FOR PRIVATE RISKS → INCIDENTAL EXPENSES

  • Statutory rent, unemployment, health and long-term care insurance
  • Private health and long-term care insurance
  • Disability insurance
  • Auto liability insurance
  • Liability insurance (also pet owner liability insurance)
  • Life insurance
  • Endowment assurance
  • Legal insurance
  • Travel health insurance
  • Riester pension

Note: There may be cases where an insurance not only covers private claims, but is can cover occupational risks as well and thus, cannot be delegated into two categories so easily. This is often the case with legal insurance, which a small component thereof is occupational legal insurance. The premiums are divided respectively into advertising costs and incidental expenses on the tax declaration. Here you have to distinguish which share of the insurance premium is for private risks and which for occupational risks. This certification should be submitted to the tax office in addition to your tax declaration.

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