Liability insurance and tax return

Car, land and the beloved four-legged friend – all these things can be covered by a liability insurance. Everyone should have a personal liability. The private liability insurance prevents you from having to financially curtail your life because of a short carelessness. The legislature recognizes liability insurance as pension expenses in the tax return. In doing so, he supports his citizens in protecting themselves against risks in life. In addition to the liability insurance, you can also specify other insurance as a precautionary measure in the tax return.

The expenses for the following insurance can be claimed for tax purposes:

  • retirement
  • unemployment insurance
  • Disability insurance
  • Disability Insurance
  • Liability insurance (for example private liability, motor vehicle liability)
  • Health insurance
  • care insurance
  • accident insurance
  • Term life insurance

Claim the private liability insurance in the tax return

Contributions to private liability may be deducted as other pension expenses . You enter your contributions in the “Investment pension expenses” (lines 46 – 50) of your income tax return. All other contributions for other precautionary expenses can also be entered here, such as contributions to motor vehicle liability insurance. In addition to personal liability, you can claim additional liability insurance as a precautionary expense in the income tax return:

  • Animal husbandry liability for dogs and horses
  • House and landowner liability
  • Principal’s liability
  • Hunting liability
  • Boat liability
  • Water damage liability

Which conditions do I have to fullfill?

The basic requirement to be able to deduct the liability contributions in your tax return: You must have taxable income . If this is true, you must pay particular attention to the following: Legislators have set maximum limits up to which pension costs can be taken into account for tax purposes.

  • Maximum limit for salaried employees, civil servants, pensioners and pensioners: amounts up to a maximum of 1,900 euros are deductible.
  • Maximum limit for self-employed: Self-employed persons are granted a higher ceiling for pension costs. Since self-employed pay the health insurance contributions completely themselves, they are granted a maximum amount of 2,800 euros per tax year.
  • Maximum limit for married couples: For married couples who collect their income together, the common maximum amount is the sum of the maximum amounts of each spouse. Who owns many precautionary expenses own, can claim fact only few or no contributions of certain insurance companies like the liability in the tax declaration.

The special case: the motor vehicle liability insurance

A car can put a strain on the household budget. A big cost factor is the insurance for the maintenance of the car. Therefore, it is gratifying that a part of the cost of motor insurance is tax deductible on the tax return.

What costs can be claimed?

It is advisable, in addition to a liability, to take out a partial or full insurance for a car. But not all types of insurance are taken into account by the tax office. Only motor liability is tax deductible. It is considered a precautionary measure because it protects you against any claims against third parties. Motor vehicle liability is mandatory by law. Accordingly, the state comes to its citizens by the motor vehicle liability in the tax return – alternatively – can assert in several places.

Motor vehicle liability is included in the tax return as other precautionary expenses if it is not operating or business expenses. As operating costs, motor vehicle liability insurance from the tax is deductible when you own your own business.

Rides to work can usually be mentioned in the tax declaration on the distance charge as up to an amount of 4,500 Euro / year as income-related expenses. Those who can benefit from this advantage often benefit more than if they deduct the contributions under other pension costs.

Which documents do you require?

The possibility of indicating the contributions of motor insurance and private liability in the tax return is usually used within the scope of the deductibility of other pension expenses. In addition to the necessary forms from the tax office, you will need proof of the contributions made in the relevant tax year . If your insurer has not automatically sent you a statement of contribution, you should request it. In most cases, a copy of the insurance contract and bank statements showing that the payments have been made is sufficient. Often it is also sufficient if you submit a copy of the insurance contract once and only prove the payments in the following years.

Checklist: Is my liability insurance deductible?

  • Taxable income in the tax year had?
  • Liability insurance completed?
  • Maximum limit with other precautionary measures not yet reached?
  • Special case motor vehicle liability: operating costs, advertising costs or pension expenses?
  • Evidence available?

Tip: Let us advise you!

It is advisable to consult with the taxpayer if you are unsure what you can sell. The legislator sees this so, which is why only people with appropriate training may take money for tax advice. These can be tax consultants, lawyers and counseling center managers in employment tax assistance associations . This ensures that support in tax matters is professional and of quality.

Conclusion: deducting liability insurance can be worthwhile

It may be worthwhile for taxpayers to consider whether their liability insurance is deductible. However, there can be no assurance that any citizen with liability insurance can enjoy tax benefits. Many reach the maximum limit for the precautionary expenses by specifying the expenditures for the health insurance. Therefore, it should be carefully examined whether it is possible to offset the cost of motor insurance with the distance charge. Even if it happens that it is not worthwhile or that exceeding the limits does not make it possible to claim liability for tax purposes, this insurance cover should not be waived. Too big is the risk of causing so much damage through negligence in everyday life, for which would have to be paid without liability insurance a lifetime.