Tax Deductions for Storm Damage
Rough weather in any season can lead to storm damage to your home or business in Trevose, PA. In some cases, losses that are not covered on your homeowners or business policy are tax-deductible if certain criteria are met.
The Federal Emergency Management Agency (FEMA) maintains a list of areas declared disaster zones, and the Internal Revenue Service (IRS) posts announcements regarding tax relief programs for victims within them. A quick online check can ascertain your eligibility for federal assistance. The silver lining of your natural disaster just might be a tax break.
How to Deduct Losses
The general rule regarding deductions is that any loss that has already been reimbursed by insurance is not deductible. However, if for any reason you do not file an insurance claim, the loss may be deductible. While losses as the result of normal deterioration or accident are not deductible, the following natural disasters would likely qualify:
To deduct a storm damage loss related to your home, nonbusiness property or vehicle, you must file an itemized tax form. Two offsets apply; $100 must be subtracted, and the balance must be more than 10% of your adjusted gross income. The deduction is recorded on Schedule A of your federal tax return on IRS Form 4684.
To deduct a loss to your business, neither the 10% of adjusted gross income nor the $100 reduction comes into play, and you may claim the deduction even if you do not itemize your tax return. Businesses located within presidentially declared disaster areas may be eligible for federal tax relief.
No location is immune to the sometimes epic forces of nature that are more than capable of wreaking havoc in the lives of its inhabitants. However, homeowners can take comfort in knowing that in the unwelcome event of a natural disaster, reimbursement for storm damage from an insurance policy or the federal government is available.