Louisiana Citizens Fair Plan Assessment - Tax Deductible on Rental?

[Chelsy S.]

First timer for tax filing as a landlord.... 

I know I can deduct the property insurance as an expense, but my question is regarding the credit for the LA Citizens FAIR Plan charge which is on all Louisiana policies. I'm guessing that it can also be credited? Is there a reason I shouldn't. 

I should still be eligible for the credit for a partial year at least, (it's a primary residence with partial year tenant agreement) but breaking it down may not be worth the pain/complication of filing since it's less than $50. 

Thoughts from those in state?

[Michael Faulk]

Chelsy -

I don't know exactly where to claim this expense on your taxes but... each year my accountant asks for those figures from my insurance providers. I know he deducts them some sort of way... Ask your tax professional.  They can give you a more specific answer.

Take care.

Michael 

[Mark L.]

the recommendation I have received from my accountant is yes. I have deducted that assessment the last few years.

[David S.]

The FAIR Plan assessment is a CREDIT, which means you are reimbursed dollar for dollar.  make sure you have the Declaration Page in hand when you file for reimbursement via one of the 3 ways:

1.  Via you personal income tax return for the State of Louisiana.  Policy number is needed.

2.  By filing form R-540INS  for a single policy, or if you have a 2nd or more policies, form R-INS.  They are found at: 

http://revenue.louisiana.gov/NewsAndPublications/CitizensInsuranceTaxCredit#Form540

3.  Have your accountant or tax preparer file for you.  The Declaration Page of the Insurance Policy is needed for hem to do so.

[Braden Smith]

Get a good CPA if you don't already have one. They are an invaluable resource to all real estate professionals. I highly recommend NOT filing your taxes without the expert guidance of a CPA knowledgeable in all things real estate related. Since you are in Baton Rouge try Liz DeCuir. She is a great CPA and an investor herself so she definitely knows taxes for investors. Contact number -  (225) 610-6108  Email - [email protected]

You should also check out the investor group there in Baton Rouge if you have not - http://www.meetup.com/the-ring/ 

[Chelsy S.]

Thanks everyone for the input and sorry for the acknowledgement-- I forgot I changed my email notifications up to only 1x/week!  

I used to work in insurance so I know that 50% of people forget to hold on to or 'can't find' their declarations page come tax time. I can hear the phones ringing off the hook in my sleep-- still! So I have both of our dec pages from last year (HO-3 and Rental Dwelling policy for part of the year). 

@BradenSmith:

Thanks for the recommendation. Actually since we're on Expat Assignment abroad, my husband's company contracts our taxes to be done, so we have someone, fortunately-- because they sure are messy now. Formerly we always used TurboTax as simple W-2 earning homeowners of our primary residence. But we will keep her in mind if services are needed in the future.

I would love to attend the local RING once we get back which should be this summer. 

Stepping back, however, I guess my question more specifically, was: Is the full premium deduction better than the remaining deduction (less the credit) combined with the credit? 

I believe what @David S was referring that the Credit (vs. a deduction) was the key point.

I know that a credit is better than a deduction, so I guess that's the simple answer. But I was wondering if there were any exceptions to this guideline?