Insurance agents can take a handful of tax deductions whether they are self-employed or work for someone else. Employees can deduct unreimbursed work expenses on Form 2106. Self-employed insurance agents can list deductions as expenses on Schedule C. You can only deduct expenses that have not been reimbursed by anyone else, such as a client or an employer.
If you're out on the road visiting clients, all those miles can add up. For 2015, the IRS offers a standard mileage rate of 57.5 cents per mile driven. This rate covers not only the gas consumed, but depreciation, maintenance, car insurance, registration and fees for owning a vehicle. Any miles driven to visit clients or conduct business outside of your office can be deducted, but the miles driven during your daily commute are not. For example, say that your regular commute is 10 miles round trip and you spent all day at a client site instead. If the client site was a 30-mile round trip, only 20 miles are deductible because you have to subtract the 10 miles from your normal commute.
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If you go out of town and leave overnight to visit clients or conduct business, most of your travel expenses are deductible. The full cost of any parking fees, tolls, train tickets, airplane fares and bus tickets are deductible. The cost to stay in a hotel when you're gone can also be fully deducted. You can deduct half of the total cost of any meals, including food, drinks, tax and tip, that you purchase on the trip.
Dues and Licenses
The cost you pay to maintain professional licenses is deductible as either an unreimbursed work expense or a business expense. Any professional dues you pay -- like those to a state insurance agent organization -- are also deductible.
Both self-employed and employed agents can deduct costs they pay for continuing education. For employed agents to take this deduction, the education must either maintain or improve skills necessary for their current jobs. The cost of registration fees, tuition, materials and travel expenses are all deductible.
Self-employed insurance agents can deduct any necessary and ordinary costs they paid to run their businesses. The list of potential expenses is endless, but the most common ones include:
- Office expenses such as pens, paper, printers, and staplers.
- Professional fees such as accounting, marketing and legal fees.
- Health insurance, dental insurance and business insurance premiums.
- Rent, utilities, real estate taxes, cleaning, maintenance (if you have your own office).
- Depreciation on office equipment like computers and laptops.