Storing Insurance Documents in a Safe Deposit Box & Claiming Your Tax Deduction
Keeping track of one's insurance documents can be a large task and usually not at the top of one's list of things to do. There are a number of insurance and other important documents that need to be kept in a safe place for easy access in case of an emergency. That is why many choose to put their important insurance documents into a safe deposit box. Not only is this a great option to keep important insurance and other documents safe and organized, but one may also be able to claim a tax deduction on the rental fee of the safe deposit box.
Understanding What a Safe Deposit Box Is
A safe deposit box is a secured container that one can rent from a bank, post office, or other company to keep their valuable possessions in to protect them from fire, flood and other disasters that could damage them if the possessions were kept at home. The renter of the safe deposit box pays a monthly, quarterly, or yearly fee to the safe deposit box owner for use of the safe deposit box. The box can be opened by the renter with an assigned key and sometimes other identification measures are required for opening the box such as an additional code and/or a signature. Usually one chooses to rent a safe deposit box in close proximity to their residence for frequent and quick access if needed.
What Important Insurance Documents Belong in a Safe Deposit Box?
Owners of a safe deposit box choose to put many different types of valuables into them. One of the most common uses for a safe deposit box is to store insurance documents. This gives the owner of the insurance policies and their dependants quick and easy access to their insurance documents and information, which can be a great value in an emergency situation.
The types of insurance documents that should be stored in a safe deposit box would include all policies owned by the renter such as the homeowners, auto, umbrella, health and life insurance/annuities policies. Also, any title insurance polices for one's current home or additional properties owned should be included. In addition to one's property insurance policies and health insurance policies, one should also include their home inventory list. This can be a list of the home's contents and/or a DVD movie of the home's contents.
Additional Documents that Should be Kept in a Safe Deposit Box
Besides important insurance documents, there are other important documents that one should consider storing in a safe deposit box. These additional documents include one's marriage certificate, will, birth certificate, passports, divorce papers, professional licenses, college degrees, military records, deeds and titles. Important financial and business documents should also be stored in a safety deposit box such as stock certificates, bonds and treasury securities, savings bonds, and any important employment contracts.
An essential point to remember is to make sure that besides storing these documents in a safe deposit box, one should also continue to store copies of the same documents at their home or office. This is critical because in some cases safe deposit boxes are not 100% guaranteed to be able to keep one's documents safe and having additional copies in a separate area can be invaluable.
Who is Eligible for the Safe Deposit Box Tax Deduction?
Besides keeping one's documents safe, another great benefit of a safe deposit box is that it can be a tax deduction for some. The safe deposit box tax deduction is available to anyone who has a safe deposit box and qualifies under IRS guidelines. In order for the safe deposit box rental fee to qualify for a tax deduction it must meet certain IRS qualifications. IRS Publication 529 says the safe deposit box is subject to the 2% limit which according to the IRS Publication 529 means one can "claim the amount of expenses that is more than 2% of [one's] adjusted gross income. [One] can figure [their] deduction on Schedule A by subtracting 2% of [their] adjusted gross income from the total amount of these expenses." Contacting a tax professional would be helpful for those who feel they may be able to deduct their safe deposit box rental fee.
Understanding What a Safe Deposit Box Is
A safe deposit box is a secured container that one can rent from a bank, post office, or other company to keep their valuable possessions in to protect them from fire, flood and other disasters that could damage them if the possessions were kept at home. The renter of the safe deposit box pays a monthly, quarterly, or yearly fee to the safe deposit box owner for use of the safe deposit box. The box can be opened by the renter with an assigned key and sometimes other identification measures are required for opening the box such as an additional code and/or a signature. Usually one chooses to rent a safe deposit box in close proximity to their residence for frequent and quick access if needed.
What Important Insurance Documents Belong in a Safe Deposit Box?
Owners of a safe deposit box choose to put many different types of valuables into them. One of the most common uses for a safe deposit box is to store insurance documents. This gives the owner of the insurance policies and their dependants quick and easy access to their insurance documents and information, which can be a great value in an emergency situation.
The types of insurance documents that should be stored in a safe deposit box would include all policies owned by the renter such as the homeowners, auto, umbrella, health and life insurance/annuities policies. Also, any title insurance polices for one's current home or additional properties owned should be included. In addition to one's property insurance policies and health insurance policies, one should also include their home inventory list. This can be a list of the home's contents and/or a DVD movie of the home's contents.
Additional Documents that Should be Kept in a Safe Deposit Box
Besides important insurance documents, there are other important documents that one should consider storing in a safe deposit box. These additional documents include one's marriage certificate, will, birth certificate, passports, divorce papers, professional licenses, college degrees, military records, deeds and titles. Important financial and business documents should also be stored in a safety deposit box such as stock certificates, bonds and treasury securities, savings bonds, and any important employment contracts.
An essential point to remember is to make sure that besides storing these documents in a safe deposit box, one should also continue to store copies of the same documents at their home or office. This is critical because in some cases safe deposit boxes are not 100% guaranteed to be able to keep one's documents safe and having additional copies in a separate area can be invaluable.
Who is Eligible for the Safe Deposit Box Tax Deduction?
Besides keeping one's documents safe, another great benefit of a safe deposit box is that it can be a tax deduction for some. The safe deposit box tax deduction is available to anyone who has a safe deposit box and qualifies under IRS guidelines. In order for the safe deposit box rental fee to qualify for a tax deduction it must meet certain IRS qualifications. IRS Publication 529 says the safe deposit box is subject to the 2% limit which according to the IRS Publication 529 means one can "claim the amount of expenses that is more than 2% of [one's] adjusted gross income. [One] can figure [their] deduction on Schedule A by subtracting 2% of [their] adjusted gross income from the total amount of these expenses." Contacting a tax professional would be helpful for those who feel they may be able to deduct their safe deposit box rental fee.
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