Is your wallet ready for the next big disaster? 🌪️💸 Brace yourself because emergencies strike unexpectedly in the US and wreak havoc on personal finances. 💥 With 20 Presidential disasters already declared by March 2023, you can’t afford to be caught off guard. ⚠️
Keep in mind that you get a tax break for casualty losses for immediate relief.💰
Here are the three critical rules to follow when claiming a casualty loss deduction:
👉🏻 Ascertain the extent of physical damage: Only losses stemming from physical damage are eligible for deduction. Losses that arise from decreases in property value or future casualty probabilities are not eligible.
👉🏻 Identify the cause of the damage: Eligible losses must be caused by specific events such as fire, storm, shipwreck, or another casualty that is an independent and sufficient cause.
👉🏻 Compute the deduction: Deduct the difference between the property’s market value and before and after the casualty.
Additionally:
💲 To qualify for the deduction, the losses incurred must be uninsured or claimed promptly on insurance and exceed $100.
💸 The losses must exceed 10% of adjusted gross income and not surpass the adjusted basis in the damaged property.
🗓️ If you incur a casualty loss in a declared disaster, you can deduct it from the previous taxable year for immediate relief.
⚠️ Protect yourself! Review your insurance policies, build an emergency fund, create a disaster plan, and do not forget… Schedule your assessment with us!