While life insurance is not tax deductible, income protection insurance is.
Payments are typically made monthly on these policies but can usually be paid up to a year in advance.
June is a great time to maximise your tax deductions. If you pay your annual premium now as a lump sum, you can then claim a tax deduction for the full amount in this years tax return.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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How can I work out the deductible Income Insurance protection amount for the tax return? Is it total premiums for 12 month or only portion? For example: $40 per month *12 months= $480.(deductible expenses)
Hi Summer,
If the insurance is solely income protention, the total premium is 100% deductible. However, if the insurance is a combined life insurance/income insurance, you’ll need to contact your insurer to find out the actual break-up of the premium due to the fact that Income protection insurance can be claimed whereas any life insurance component cannot.
I hope that helps.
Income Protection is a big help in times of unemployment happens due to accident or illness. You will no longer worry regarding your everyday expenses for income protection can provide you with your monthly expenses. And all you can focus on recovering.
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