The Rules of Storm Damage and Tax Deductions
Are Storm Losses Deductible?
Owning a commercial property and running a business are challenging tasks, even for the most well-equipped and educated people. However, the job of running a business becomes more complicated when a storm wreaks havoc on your building. Despite insurance, the expenses for recovery and restoration of storm damage can throw a wrench into the most organized operations. Therefore, when year's end rolls around and tax season begins, many business owners wonder whether storm losses are deductible, and if so, which ones and how much. Here are some things to take into consideration:
1. No Deductions for Deterioration or Accident Loss
While many losses are tax deductible, you cannot claim losses on deterioration or accidents. Deductions will only help you offset damage caused by natural disasters, not negligence.
2. Deductions for Storm Damage Coverage
Storm damage can come from various causes and produce a variety of losses. For example, lightning strikes may cause building fires, hurricane winds may send debris toward and through windows or heavy rains may cause flooding. All of these issues and the recovery from them can be deducted. However, if you have insurance and fail to make a claim, you cannot claim losses.
3. Universal Deductions for Declared Disasters
Some natural disasters result in universal deductions for the affected area. If the president declares a national disaster in your area of operation, you may be eligible for certain deductions laid out by the government.
4. Deductions for Restoration Work
Once a storm has passed, you may need to contact a storm remediation specialist in the Sleepy Hollow,IL, area to help you salvage your business. While insurers may pay a portion of the recovery and restoration costs, you may have to pay out-of-pocket for a part of the expenses. The portion that you pay can likely be deducted on your taxes.
Storm damage can be catastrophic not only for the damage to your business, but also in expenses for recovery. Be sure to keep your receipts, file your claims and hire a professional to help you rebuild.