If you’re self-employed and work from home, you may be able to deduct retirement insurance from your tax return

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If you're self-employed, you may be able to write off rental deposit insurance through the home office deduction.

Annuity insurance may be tax deductible if you use part of your home for business and work for yourself.
You can only claim a deduction if you use the space exclusively and regularly for work purposes.
People who receive a W-2 or do not work from home do not qualify for the deduction.
Check out Personal Finance Insider's tips for the best tax software.

As more people have worked from home in recent years, questions often arise about what work-related expenses are deductible on your tax return. You may be wondering if renters insurance is one of them.

While it is not deductible for most taxpayers, if you are self-employed and work from home, you may be able to claim a deduction for a portion of what you paid for renters insurance.

Is rental deposit insurance tax deductible?

Homeowner's insurance is generally not tax deductible. After the passage of the Tax Cuts and Jobs Act in 2017, W-2 employees could no longer deduct labor costs on their federal tax returns. Business owners can, however, qualify for tax deductions on renters insurance, says Sarah York, staff writer and in-house tax expert at Keeper Tax, a startup focused on helping freelancers and gig workers maximize their tax savings.

When is rental deposit insurance tax deductible?

As with homeowners insurance, you can deduct renters insurance if you are self-employed and use part of your rental unit as a home office. However, your home office must be used regularly and exclusively for business purposes IRS. A tax-deductible home office could include a room in your unit that you have specifically designated for business activities.

When is rental deposit insurance not tax deductible?

If you receive a W-2 from an employer, you can't use it to deduct retirement costs, even if you work from home and have a home office, York says.

Even if you are self-employed, you may not be able to deduct rental deposit insurance. If your home office is used for other than business purposes – for example, as a guest room, it wouldn't meet IRS requirements and therefore wouldn't qualify for deductions, says Audrey Blanke, certified financial planner with Atlatl Advisers, an asset -management firm in Madison, Wisconsin.

Here's how to calculate your renter's insurance deduction

There are two ways to claim renters insurance deductions for your home office: the simplified method and the regular method.

Simplified Method

The simplified method is based on the square footage of your office. It allows you to claim $5 per square foot up to 300 square feet or 1.Deduct $500. If you didn't use the space for a home office throughout the year, that amount should be prorated.

"If you're a business owner with a traditional office that you rent out in addition to a small workspace in your home, you and your tax advisor need to consider the time spent in each space and the types of tasks performed," Blanke says.

Regular Method

The regular method is a little more complicated. It has two components: direct expenses and indirect expenses. Direct expenses are 100% deductible and include things like office supplies, the cost of a phone line or the cost of furnishings. Indirect expenses don't relate solely to your business, including things like your mortgage, property taxes, and renters insurance.

To use the standard method, divide the square footage of your home office by the square footage of your entire home. This gives you the base percentage of your home office that you can claim. Assuming your base percentage is 5%, you are allowed to claim a 5% discount on all office-related expenses, including tenant insurance.

Because the simplified method is easier to use, it may be a better option for people who want to save time and forgo the hassle of keeping track of all business expenses. It also minimizes the risk of an IRS audit, York says.

Here's how to claim the renter's insurance deduction

After you determine your deduction using the simplified method, you can claim this amount on Schedule C on line 30. If you use the standard method, you'll need to fill out Form 8829, Business Use of Your Home. Include your renters insurance on line 18 under "indirect expenses". After you fill out your form, enter the entire home office deduction amount on your Schedule C.

The home office deduction may result in increased scrutiny from the IRS. So be sure to include your actual business expenses. Remember that your home office must be used regularly and exclusively for business operations. In addition, office-related expenses must be used exclusively for your business to claim this deduction. York suggests using the simplified method if you have concerns about IRS audits.

"Don't be too aggressive," York says. "As tempting as it is to write off major home expenses, if you can't defend it when the IRS comes knocking, you'll face additional taxes and penalties."

Yext hosted a number of panel discussions with managers from leading marketing and digital companies across different areas of financial services to understand the impact of the Corona pandemic on the financial sector. In these discussions, we were able to outline findings from our research on industry trends and tell executives about the impact of the Corona pandemic on their businesses. Also discussed were changes in customer behavior and best practices for dealing with these new realities.

Financial services respondents anticipate the following impact of the Corona pandemic on their businesses:

43% of respondents report record levels of business activity and performance
14% report a sharp increase in activity, which has since dropped off again
29% report some positive, some negative impact on a variety of areas
14% report a predominantly negative impact

The Corona pandemic has profoundly changed the financial services marketplace. On 22. January, the U.S. officially confirmed the first infection with the novel coronavirus. What followed was a wave of macroeconomic and legislative impacts on all industries in the financial services sector. First, regulations were introduced on domestic isolation, which particularly hurt the travel and hospitality industries. Then the crash in oil prices began. On 23. February was also followed by the crash of the S&P 500. In response, the Federal Reserve System decided to (U.S. Federal Reserve System) on 3. March an interest rate cut to stabilize national liquidity. The result was a boosted mortgage market, leading small and midsize businesses to borrow heavily under the Coronavirus Aid, Relief, and Economic Security Act prompted. They can hardly process this information? This is how many of us feel, the economy was finally completely off the rails for weeks .

This illustration shows how one event led to the next. So customers took advantage of low interest rates to refinance their loans and investors had to adjust their portfolios accordingly.

A number of studies have examined how financial service providers are dealing with the COVID-19 pandemic. Here's what we heard [from financial services executives] in a recent Yext panel discussion:

71% of executives surveyed said that a reassessment of all strategic priorities and plans was taking place in light of the new Corona pandemic situation
57% say they are looking to cut costs
29% report planned investments in the digital sector

Gartner corroborates the above findings with its own study, according to which companies are shifting spending on media in order to invest the budget saved in communication and interaction with customers and in supporting their own workforce.

We would like to present some of these messages to customers here as examples:

Update of the availabilities resp. Temporary closures/absences of individual departments, offices or financial professionals
Specific notices under the COVID-19 pandemic, such as separate hours for seniors, security measures in business premises, etc.
Prioritize digital services or contactless transactions, z. B. Online booking for appointments, collection facilities, online banking and trading
Frequently asked questions about important announcements, such as those concerning small and medium-sized enterprises, mortgages, deferment of payment, or regarding. Assistance programs for customers and employees

Customers don't need promotional offers now, they need immediate support for critical business transactions. This is where it becomes apparent which companies can be relied upon and which cannot – who is coming up with innovative solutions and who is missing out on developments.

Without a doubt, we are dealing with a continuing development, the economic impact of which is far from being at an end. However, many leading financial service providers have already accepted the new realities as normality. 71% of executives surveyed believe that the Corona pandemic will have a lasting impact on customer behavior, while the remaining 29% are optimistic that old patterns will return. Currently, a wide variety of business strategies are being tested and, especially in light of changing business processes and interactions with customers, financial services providers are asking themselves questions such as:

"Have our financial cuts or our move to digital processes come at the expense of human interaction?"

"Did our company's strategy promote or inhibit adaptation to industry trends?"

"Do we still offer our customers sufficient opportunities to get support and do business?"

Financial service providers can introduce innovations quickly – it's practically in their blood. Among other reasons, this is why at Yext we particularly enjoy working with brands in this sector. The future will show that especially companies in this industry benefit from agile structures.

The prices that tenants and buyers pay for housing are drifting further and further apart in Germany, at least in certain regions. This is confirmed by an analysis of a bank.

In many places, real estate purchase prices depend on regional rents. Across Germany, the range now extends from eleven to 72 annual rents that prospective buyers have to put on the table for residential property, as a recent study by a bank makes clear.

The "Wohnatlas 2020" is an annual, multi-part series of studies by Postbank, a brand of Deutsche Bank AG, which deals with the local rents and purchase prices of residential properties. The analysis, which examines the German real estate market under various aspects regionally down to the district level, was currently commissioned by the Hamburg Institute of International Economics (HWWI) for 401 independent cities and districts.

One result of the recently published study is that in 158 of the 401 regions, housing prices are still comparatively moderate, but in major cities they are rising at an above-average rate. As a measuring instrument to calculate the ratio of rents to purchase prices of real estate, the authors of the Housing Atlas use the so-called "multiplier". It shows how many annual rents, on average, it costs to buy a condo in the same region or city. Prices and rents of 2019 were included in the calculations.

Buyers pay between eleven and 72 annual rents for property

With a multiplier of less than 22.5, experts say the purchase price is moderate compared to local rents. "When the purchase price is in this range, buyers often fare more favorably than renters: The low interest rates then allow monthly installments that do not exceed a standard local rent. At the same time, buyers are building up assets. Your own four walls are also a good retirement provision," explains Eva Grunwald, Head of Postbank's Real Estate Business.

Nationwide, the range extends from eleven annual net rents in the Burgenland district in Saxony-Anhalt to just under 72 in North Friesland on the North Sea, which includes the sought-after locations on the islands of Sylt, Föhr and Amrum.

Across the analyzed counties and independent cities, the multiplier averaged 24 in 2019, according to Wohnatlas. For comparison, in 2018, buyers had to put "only" just under 23 annual net cold rents for their own four walls on the table. The conclusion: The purchase prices rise thus more strongly than the rents.

Expensive and cheap regions

There are particularly many regions with a multiplier of only 11.0 to 17.5 in Thuringia, Saxony and Saxony-Anhalt. Likewise favorable districts and counties, where the multiplier is between 17.5 and 22.5, are often found in central and northern Germany. According to the residential atlas, however, a particularly large number of areas with a multiplier of 30 to 72 are located in Bavaria and the coastal regions.

Some major cities such as Kiel, Hamburg, Düsseldorf, Cologne, Berlin, Leipzig, Dresden, Frankfurt, Stuttgart and Munich also have a high multiplier of 27.5 to 72. In Berlin and Hamburg, buyers will have to pay around 36, and in Munich as much as 37, annual net rents. Real estate prices in Hamburg and Berlin have climbed particularly steeply in relation to rents: in the previous year, buyers had to pay an average of just under three years' rent less.

Whether one can already speak of a real estate bubble in the German metropolises, the authors of the housing atlas do not answer in their current evaluation.

24 German cities offer moderate purchase prices

Prospective buyers should take a differentiated look at the supply in cities with more than 100.000 inhabitants, the experts advise. On average, the multiplier here is just under 25 annual rents. More than 30 years' rent is payable for the purchase of an apartment in Rostock, Potsdam, Regensburg and Lübeck, for example.

Buyers will find favorable real estate prices compared to regional rents in the following cities, for example: Gelsenkirchen (multiplier 15.9), Salzgitter (16.7), Bremerhaven (17.5), Duisburg (18.1) or Herne (18.3). "In a total of 24 cities with more than 100.000 inhabitants, the multiplier is below 22.5 and thus below the value that experts regard as the threshold for moderate prices," says the Housing Atlas.

Overall, the study makes clear: Buying real estate is particularly expensive on the coasts and in the Alps; by contrast, good deals offering moderate prices compared to local rents are available in the center of Germany and in some mid-sized cities in the north and in the Ruhr region.

Buying real estate with the help of life insurance

Incidentally, the experts do not believe that the Corona crisis will "lead to major shifts in the ratio of prices to each other" in the coming months. In the long term, there could be adjustments in economically particularly affected and weaker regions. Because this factor could weaken demand for real estate.

By the way, life insurance can be doubly useful for a homebuyer. Here's how it can be used to finance a home. Many life insurers also offer, for example, a home financing loan based on a life insurance policy with a fixed interest rate for a term of 10, 15, 20 or even 30 years. Particularly long terms with fixed interest rates are an advantage in the long term when mortgage rates are low, as they are currently still being offered.

Life insurance, for example in the form of residual debt insurance, can also serve as a safeguard for family members if the borrower dies during the term of the home loan. For example, term life insurance can be structured so that in the event of the borrower's death, there is still enough money for reasonable survivor coverage for the family even after the remaining loan has been repaid.