Income Protection Insurance Australia Tax Deduction

How does the income protection tax deduction work.

Income protection insurance australia tax deduction. Insurance watch is an australian life insurance broker offering life tpd insurance trauma insurance and income protection insurance as a corporate authorized representative of synchron afsl 243313. You can t claim a tax deduction if your income protection insurance comes from your super fund so you might want to compare different insurance options. But don t make the mistake of incorporating life insurance critical care insurance or trauma insurance because these are not eligible elements for deduction. Therefore if you paid your premiums with your own money and you are the listed as the policy owner on the policy you will generally be able to claim the tax deduction in the year you paid the.

Non super income protection insurance fees are tax deductible. 2 if my yearly premium is for example 1500 can i claim the full deduction on the same year. Income protection insurance is primarily designed for those with a quantifiable regular income or who work at least 20 hours a week. If you re looking for last minute tax deductions before the end of the financial year you might consider prepaying for income.

Generally costs you incur directly related to your ability to earn an income may be tax deductible. If you take this after tax deduction into account your income protection cost might be significantly less than the original premium you paid. You must include any payment you receive under such a policy on your tax return. Income protection insurance premiums in australia are generally tax deductible when held outside of your super fund.

The australia tax office ato is of the view that because income protection insurance premiums are there to protect your income which is tax assessable your premiums are tax deductible in nature. The amount you can claim depends on your assessable income and your marginal tax rate. Etax australian tax return online. 1 if i take up an income protection insurance can i claim the yearly premium as a tax deduction.

Income protection insurance tax deductible premium costs are unique to income protection insurance in australia though they apply only if the benefit payments are paid as a regular payment to. It can be an advantage to prepay your income protection insurance. This may include some of the premiums under income protection policies depending on the type of benefits covered.