Depending on your occupation’s requirements, you may or may not be able to deduct your professional liability insurance on your taxes.
As an entrepreneur or small business, you have a lot of costs to consider throughout the year. From professional liability insurance to employee salaries, the list of expenses that you need to stay on top of may seem never-ending.
One way to offset the operating costs of any business is through eligible deductions at tax time. Of course, in order to take advantage of these write-offs, you first must know what can and cannot be expensed.
Below, APOLLO explains who is eligible to deduct professional liability insurance as an expense on their company tax return. Our team also covers how to write it off, as well as other expenses that you may be able to deduct come April.
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Who Can Claim Professional Liability Insurance?
Just because you’ve purchased professional liability insurance, doesn’t mean you get to deduct it on your taxes.
In fact, you may only write off your insurance premiums for this type of coverage if you are a service professional who is required by law to maintain a liability policy.
Liability coverage is often a regulatory requirement for occupations like:
- Accountants and tax professionals
- Lawyers and legal professionals
- Doctors and medical professionals
Uncertain whether or not your occupation requires you to have liability insurance? Try checking with the professional association located in your region.
How to Deduct Your Professional Liability Insurance
If your professional liability insurance is deductible for your occupation, you may be wondering how to write it off.
The process is actually quite simple. Tally up the total cost of the plan premiums that you’ve paid over the course of the year. Then add it as a deduction on Line 212 of your income tax return.
Please note, the above should not be taken as formal financial advice. For expertise regarding your specific situation, please consult a financial professional.
What Other Kinds of Operating Costs Are Tax Deductible?
Once you’ve determined whether or not your professional liability insurance premiums are tax deductible, you may be wondering what else you can write off.
Of course, most personal and living expenses are not eligible for deductions on your business taxes. That is, unless you have a home office, or otherwise use a portion of your living space for work.
However, there are quite a few other costs that may be eligible for your business to write off, including:
- Accounting and legal fees
- Advertising costs
- Fees for business licenses
- Maintenance and repairs
- Business-related travel costs
- Office expenses
For a complete list of operating costs that you may want to consider, visit Canada Revenue Agency (CRA).
Looking for Professional Liability Insurance for Your Business?
Finding the right professional liability insurance for your company can feel overwhelming and, at times, confusing.
APOLLO’s custom coverage can help make the insurance part of running your business feel effortless. Find out how you can get covered in minutes with our quick, easy, and entirely online application process.
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Get the protection you need in minutes with custom Professional Liability Insurance from APOLLO.