5 Tips for Deducting Storm Damage on Your Taxes
Deducting Casualty Losses
If you’ve experienced damage to your business in Fairless Hills,PA , due to a flood, hail, wind, hurricane, or other natural disaster and insurance wouldn’t cover you for whatever reason, your company is likely in a rough spot financially. Fortunately, storm damage that isn’t covered by insurance can often be deducted on your next tax return as a casualty loss. Here are five tips to keep in mind when deducting casualty losses.
1. You Will Need To Prove You Experienced a Loss
In order to be qualified to claim casualty loss as a tax deductible, you will need to prove that you are the owner of the property and the one experiencing loss. You will also need to prove the value of the property before the disaster and show you are unable to cover the costs.
2. Special Rules Apply to Presidentially Declared Disasters
If the president declared a disaster in your area, you can deduct the losses due to storm damage for either the year the disaster occurred or the year after- whichever saves you the most money.
3. There are Different Rules for Deducting Casualty Losses for Personal Property and Businesses
While personal property damage only allows you to take a write off for itemizers and requires you to reduce the loss by $100 and 10 percent of your AGI, this does not apply to business casualty losses.
4. Wear and Tear Is Not Considered Casualty Loss
Since a casualty loss is defined as a loss that occurred due to an unexpected or sudden event, normal wear and tear that occurs to your business will not be tax deductible. However, work done by a storm damage restoration company as a result of an unexpected disaster would be covered.
Although a natural disaster of any sort can be extremely difficult for your business to recover from, it helps to know a lot of your losses are tax deductible. When filling out this year’s tax refund, remember these four tips!