Deducting insurance costs from your taxes (Versicherungen)

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 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. Krankenversicherung, Haftpflicht-, Unfall-, Berufsunfähigkeits- oder Rentenversicherung.
  • Insurances for occupation and education: e.g. Arbeitsrechtsschutz, Berufshaftpflicht, Dienst-Haftpflichtversicherung

INSURANCES THAT YOU CANNOT DEDUCT FROM YOUR TAXES

  • Property insurances (Sachversicherungen): z.B. Hausratversicherung, Kfz-Kaskoschutz, Gebäude-, Fahrrad-, Reisegepäck- oder Reiserücktrittsversicherung.

DEDUCTING CONTRIBUTIONS AS MARKETING COSTS (Werbungskosten) OR MISCELLANEOUS EXPENSES (Sonderausgaben)?

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 (Werbungskosten) or miscellaneous costs (Sonderausgaben) from your taxes. A more detailed look in the following.

INSURANCE FOR OCCUPATIONAL RISKS → ADVERTISING COSTS (Werbungskosten)

  • Berufshaftpflichtversicherung
  • Unfallversicherung (für beruflich veranlasste Unfälle)
  • Rechtsschutzversicherung (nur Arbeitsrecht)

INSURANCE FOR PRIVATE RISKS → INCIDENTAL EXPENSES (Sonderausgaben)

  • gesetzliche Renten-, Arbeitslosen-, Kranken- und Pflegeversicherung
  • private Kranken- und Pflegeversicherung
  • Berufsunfähigkeitsversicherung
  • Kfz-Haftpflichtversicherung
  • Haftpflichtversicherungen (auch Tierhalter-Haftpflichtversicherungen)
  • Risikolebensversicherung
  • Kapital-Lebensversicherung
  • Rechtsschutzversicherung
  • Reisekrankenversicherung
  • Riester-Rente

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 (Rechtsschutzversicherung), which a small component thereof is occupational legal insurance (Arbeitsrechtsschutz). The premiums are divided respectively into advertising costs (Werbungskosten) and incidental expenses (Sonderausgaben) on the tax declaration. Here you have to distinguish which share of the insurance premium is for private risks and which for occupational risks.

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