CLAIMING CASUALTY LOSS IS TRICKY
November 18, 2019 - Douglas Myser
Claiming casualty loss is tricky. Hurricane Dorian a category 5 storm, has been called the strongest storm to ever threaten the east coast with maximum sustained winds of over 185 mph. According to the National Hurricane Center, "Although gradual weakening is forecast, Dorian is expected to remain a powerful hurricane during the next couple of days." This means that strong winds, heavy rains, and storm surges are expected to impact parts of the southeastern United States from Florida to New Jersey as the slow moving storm moves north, putting lives and property at risk. Claiming casualty loss is tricky.
In years past, taxpayers who suffered an economic loss due to a natural disaster like a hurricane could claim a deduction on their federal income tax return. That changed under the Tax Cuts and Jobs Act, passed in 2018, losses for individuals are now only deductible to the extent they are attributable to a federally declared disaster. Additionally, since you can no longer claim any miscellaneous itemized deductions, business casualty losses of property used in performing services as an employee cannot be deducted or used to offset gains. A federal casualty IRS involves casualty or theft loss of personal us property that is attributable to a federally declared disaster declaration. The casualty loss must occur in a state receiving a federal disaster declaration. If the loss isn't attributable to a federally declared disaster, it isn't a federal casualty loss, and you may not claim a casualty loss deduction unless an exception applies.
For a list of federally declared disaster areas, check out the Federal Emergency Management Agency (FEMA) website. You'll find a list specifically attributable to Hurricane Dorian there. Some property may not be covered by insurance. For damage not covered or reimbursed by any insurance, subtract $100 for each event. Next, subtract 10% of your adjusted gross income from that amount to calculate your allowable loss.
If you had a loss that did not qualify under FEMA, you may still be eligible for Tax Relief under the the Internal Revenue Code. Our 36 year old Tax Resolution Company can take you thru the process of determining all of your Tax Resolution options, including the IRS Fresh Start Program, and alternative not in that program. Tax Resolution Services Nationwide to help you avoid a IRS Wage Garnishment. Unfiled Tax Returns, we can handle that also. Call for a Free Tax Consultation today. 1-888-689-7861