Tax Deductions for Insurance Agents
By Fraser Sherman, eHow Contributor
When you run your own insurance agency, you should track every penny you spend on business, because almost all your expenses are tax deductible. Deductions not only reduce your income tax, but also the 15 percent self-employment tax -- your tax contribution to Social Security and Medicaid. If you're running your own agency, keep receipts of everything you claim, so that you can document them to the IRS if you have to.

Car Expenses
If you drive to meetings with clients, or to look at a home someone wants to insure, those are a deductible expenses, according to the IRS. You can take a deduction for each mile that you drive on business, or deduct the actual expenses such as maintenance, gas and repairs. If you use your car for personal travels as well, make sure you only deduct the expenses or mileage from using your car for insurance work.
Home Office
If you run your agency out of your home, you may be able to claim a home office deduction. If you devote one of your rooms exclusively to your insurance business, you can deduct a percentage of your housing costs based on the size of the room: If it's 8 percent of the floor space, you can deduct 8 percent of costs. The space has to be exclusively for business, though: Working in the living room surrounded by your family does not qualify.
Office Expenses
You can deduct whatever money you spend to equip and furnish your insurance office, including computer equipment, insurance-application forms, insurance-information brochures, printer paper and business cards. You can deduct office supplies the year you buy them; you can deduct furniture and equipment in the year you buy them or depreciate them gradually over time.
Professional Expenses
Not all your business expenses will be material things. You'll need a license to sell insurance, and to keep it current you'll have to take continuing education classes. You'll need a local business license with your county or city government and you may want to join professional groups, whether it's your local Chamber of Commerce or an insurance industry group such as the National Association of Professional Agents. All these fees and dues are legitimate business expenses.
Health Insurance
If you're paying for your own health insurance, rather than using your spouse's or your former employer's plan, a new law allows you to deduct 100 percent of the premiums, according to the National Association of Professional Agents. If you're paying for your family as well, you can also deduct the premiums for them.
Self-Employment Tax
After you've calculated your self-employment tax on Schedule SE, take half the amount and include that as a deduction on your 1040. If your insurance business makes you $100,000 net for instance, your self-employment tax would be roughly $15,000; you could deduct $7,500 from your taxes.
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