Can You Deduct Storm Damage Loss? Most Likely, if You Meet These Qualifications

5/14/2021 (Permalink)

Flooding clean up in Sunland Villages, AZ.

Can You Deduct Storm Damage Loss?

Under the casualty loss deduction policy, commercial owners in Sunland Villages, AZ may seek tax breaks for loss from storm damage. It's not always a sure-fire thing, though. The IRS looks for specific qualifications. To seek reparation on your taxes, consider the following three things.

1. Did the Loss Occur as the Result of a Natural Disaster?
Storms occur regularly; they are not all deemed natural disasters. This state, above all, is the first mandatory requirement: your property loss must have originated from a federally declared weather system. If it did not, the loss isn't tax-deductible. If you're unsure, search the Federal Emergency Management Agency's website.

2. Can You Supply the IRS with Specific Property Loss Records?
You cannot declare general storm damage. Be prepared to provide specific documentation listing out the services you paid for and the materials lost. For example, did a water restoration company assess your contents? What was tossed? What was salvaged? Provide photo documentation of the possession's deterioration. Write out the name of the product or fixture as well as the initial cost and the replacement cost.
Locate IRS forms, and take time to complete them thoroughly. It's better to be over-prepared.

3. Did Your Insurance Policy Not Completely Compensate?
Double-dipping isn't permitted. Evaluate your insurance payments as well as any other government financial assistance. Your agent may have cut a check to cover the ruined belongings. If the amount received totals the destruction's price tag, then you cannot seek more.
If you did not get full reparation, do some math to determine whether you may file for tax-deductible aid. First, subtract your overall cost from how much you've already received. Next, take away $100 for each storm and reduce more by 10% of your gross income. You may declare this number.
Commercial owners may be able to seek aid for storm damage. Ensure it's from a nationally declared system, and be prepared to justify your request with evidence and numbers.