4 Steps for Obtaining Tax Relief After a Storm

10/17/2018 (Permalink)

If your business has experienced storm damage take the following steps to obtain tax deductible aid

Recovering from a major disaster, such as a hurricane or other storm in Batavia,IL, can be difficult, especially when you factor in financial losses. The good news is that you may be able to qualify for a tax break that provides funding for the gap between your actual losses and compensation you received from your insurance company. If your business has experienced storm damage, take the following steps to obtain tax deductible aid.

1. File a Claim

Sometimes, property owners have their property fully insured, but fail to submit a claim to their insurance company. When this happens, there isn't an option to take the storm damage tax deduction. The simple solution to this is to file an insurance claim, even if you believe you won't be approved.

2. Complete the Proper Steps

To take the tax write-off for damages to property, it's best to contact the IRS for special help and to obtain the necessary forms. You may be familiar with the $100 rule and the deadlines in place to get tax relief for personal losses, but the laws that apply to business and income properties are different.

3. Understand the Provisions

Special circumstances may lead to tax law provisions that work in your favor – if you know how to access those provisions. For example, if the federal government declares your community to be a major disaster area, you may have extra time to file your taxes or you may be able to get a refund more quickly. Either of these provisions could provide some necessary relief that helps you get your business up and running again.

4. Visit the IRS Website

There are several sections and documents posted on the IRS website that can help you deduct storm damage from your upcoming taxes. Use the Disaster Resource Guide for Individuals and Businesses (Publication 2194) to claim casualty losses on your property or the tip section on how to move forward when commercial crops have been destroyed.

When storms threaten to put your business underwater, take advantage of the many resources available. After filing an insurance claim, be sure to contact the government for further assistance. Don’t forget to reach out to remediation and recovery professionals as well.