How To Deduct Storm Losses From Your Taxes

8/29/2019 (Permalink)

Conference room storm damage in Valley Brook, OK

How To Deduct Storm Losses From Your Taxes

As a business owner in Valley Brook, OK, you are responsible for making sure your building is properly restored when it sustains storm damage. These repairs can be expensive, though, and your property insurance may not cover the whole cost. This may leave you with quite a bit to cover out of pocket. To help ease the burden, you may be able to deduct the amount you spend from your taxes, giving you a little bit of a break. There are a few steps you need to take in order to take advantage of this tax break.

1. Take Action Quickly

There are several benefits to calling storm restoration experts as soon as you know your building is damaged:

• Prevent further water damage
  
• Prevent secondary damage, such as mold
  
• Get an estimate for your insurance claim
  
  

While you will probably take pictures and make a list of items with storm damage on your own, having the storm cleanup estimate from the restoration company can provide extra backup to your claim.

2. File Your Insurance Claim

Before you can find out how much of the loss is tax deductible, you need to see how much your insurance policy covers. When you contact your agent, an adjuster will be sent to verify the damage and assess your claim. If you don't file a claim, you are not eligible to deduct any amount of the cost of the damages from your taxes.

3. Claim Your Deduction

Once you know the total that your insurance company is going to cover, you can deduct other repairs from your business taxes. If the federal government has declared a national emergency in your area due to the storm that did the damage, you may even be able to choose the year on which you claim the deduction to maximize your savings.
Storm damage is typically covered by your business insurance, but it doesn't always cover the full amount. Talk to your accountant to see if a tax deduction is possible.