You can claim many insurance premiums as income-related expenses or special expenses for tax purposes.
Which types of insurance are tax deductible?
Many people are unaware that they can include their insurance contributions in their tax return and thus save money. For many insurance contributions, money is also received from the state. However, this does not apply to all insurances but only to those who take out personal care insurance (healthcare or income protection) or for vocational or educational needs. On the other hand, you can not deduct tax from property insurance because this is neither for prevention nor necessary for the pursuit of a training or a profession.
Insurances that are tax deductible
- Insurance for health care and income protection: e.g. health insurance, liability, accident, disability or pension insurance
- Insurance for professional and educational purposes e.g. labour protection, professional liability, civil liability insurance
Insurance that is not tax deductible
- Property insurance: e.g. home insurance, comprehensive vehicle insurance, building, bicycle, baggage or travel cancellation insurance
Contributions to health care and income protection are tax deductible.
Work and education
Contributions for occupational and educational insurance can be deducted from tax.
Contributions to insurance policies that cover only material assets are not tax deductible.
Should contributions be deducted as income-related expenses or special expenses?
In order to make insurance contributions tax deductible, you need to understand a few basics: there are insurance companies that cover occupational risks and insurance companies that cover private risks. These two categories determine whether you can deduct contributions. Depending on the category, the insurance premiums may be deducted from the tax either as income-related expenses or as special expenses. See below for more details.
Insurance for professional risk → Advertising costs
- Professional Liability Insurance
- Accident insurance (for work-related accidents)
- Legal expenses insurance (employment law only)
Private risk insurance→ Special expenses
- Statutory pension, unemployment, health and long-term care insurance
- Private health and long-term care insurance
- Disability insurance
- Automobile liability insurance
- Liability insurance (also livestock liability insurance)
- Term life insurance
- Capital life insurance
- Legal expenses insurance
- Travel insurance
- Riester pension
Note: It may well be that insurance covers not only a private but also a professional risk at the same time and thus can not clearly be classified in one of the two categories. This is often the case with a legal expenses insurance, in which the labour law protection is only a small part. The contributions are then split in the tax return under income-related expenses and special expenses accordingly. You must have it certified by your insurer as to which share of the insurance contribution falls on occupational risks and which on private. You should submit this certificate together with the tax return to the tax office.
The amount you can deduct for insurance premiums
- Old-age provision (basic provision: statutory pension insurance, Rürup contracts): The tax office has set the maximum contribution rate at € 23,712.
- Riester contracts (supplementary pension): Riester contributions up to € 2,100 can be deducted from tax as special expenses. In addition to your own contributions, the state allowance can also be claimed.
- Other pension costs (eg unemployment insurance, health insurance, long-term care insurance, liability insurance, occupational disability insurance): employees can deduct up to € 1,900, self-employed persons up to € 2,800.
- Professional policies (accident insurance, professional liability, labour law protection): these insurance policies can be claimed in full as income-related expenses.
What documentation do you have to submit to the tax office as evidence?
Insurance contributions, which are registered on the employment tax bill, do not have to be proven, so you only have to cancel your payroll tax assessment. For all other insurance, you can only declare what was actually paid. The tax office therefore requires not only invoices but also appropriate transfer documents (bank statement).
Where should you specify insurance in your tax return?
At wundertax.de, you can choose different insurance categories (statutory and private health insurance, and other insurance) simply by clicking on “Add Expenses” and entering your expenses accordingly in the fields provided. Our tax tool automatically translates your information into the official tax forms/attachments. You do not have to worry about the categories and the divisions made by the tax office, our software does this for you automatically.