Is AOV insurance tax deductible?
For many business owners, the amount of the premium is a reason not to take out an AOV. They find an AOV insurance too expensive. Are you an entrepreneur or self-employed and are you considering taking out an AOV insurance? Then it is good to know that the premium of your AOV is tax deductible. That can quickly save you a few hundred euros per year! You can deduct the premium of an AOV insurance when you file your income tax return. The premium is deductible in Box 1: Income from work and home.
AOV tax deductible
Taking out AOV insurance for entrepreneurs is not mandatory, but it is wise. If you cannot work for a longer period of time because you are disabled, you will miss out on a lot of income. However, during this period your fixed costs will continue. With an AOV insurance you are assured of an income when you become disabled due to illness or an accident. For an AOV insurance you pay a monthly premium. You have influence on the costs of an AOV insurance. You can choose the insured amount, the waiting period and the final age. These factors are all important when calculating the premium. For example, a higher insured amount also means a higher premium.
At the beginning of the new year, you will receive an overview from your AOV insurer. This overview shows how much premium you have paid that year. Part of it is tax deductible and you can get a refund through income tax. You do this by deducting the premium from your income from work and home in Box 1.
How much deductible AOV?
You may deduct the AOV premium you paid that year from the income you declare in Box 1. Depending on the tax bracket of your income, you will enjoy a tax benefit of 37.1% or 49.5% of the AOV premium.
Do I pay payroll taxes on an AOV benefit?
Yes, you pay income tax on an AOV benefit. The benefit you then receive is considered income. Therefore, the insurer must withhold and remit wage tax from the insured amount to the tax authorities. These amounts are also reflected in your income tax return. If you become disabled, you will therefore receive less than the insured amount because income tax is still withheld. Therefore, take this into account when determining the percentage of your income you want to insure.
Take out AOV insurance directly on Alpina.nl
In most cases, a salaried employee is automatically insured against the risks of disability. As a ZZP'er you are responsible for taking out such insurance. Being unable to work can be a major financial blow to a self-employed person. If you are ill for a long time or have to recover, you will miss out on a lot of income, while you still have to pay your bills. Would you like more financial security? Then you might consider taking out AOV insurance.
Do you still have questions about taking out AOV insurance? Then be sure to contact us! Our insurance specialists are happy to help you with all your questions. You can call us Monday through Friday from 8 a.m. to 6 p.m. at 088 - 688 3712. You can also send us a message via chat, WhatsApp or Messenger.
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