Severe losses in Haiti this month have brought to mind America’s own losses during hurricane Katrina, 9/11, and other regional disasters. Though the U.S. has yet to experience a national disaster as severe as Haiti’s in recent memory, we are still a large nation prone to earthquakes, flooding, hurricanes, tornados and other acts of nature which we have no control over.
Are you protected in case of disaster? What protections does the government offer in the event of a disaster?
The IRS offers tax breaks for casualty, disasters, and theft losses in certain instances. Taxpayers can claim casualty and theft losses on Form 4684: Causalities and Thefts. Section A should be filled out for individual’s casualty and theft losses, while section B should be used for business or income-producing property losses.
The 2008 National Disaster Relief Act changed some of the tax rules related to losses from federal disasters. These changes allow taxpayers to claim net disaster loss deductions even if they do not itemize their tax returns. There is no upper or lower qualifying limit for the taxpayer’s adjusted gross income.
If you live in the Midwest and qualify for the Heartland Disaster Relief Act, the entire amount of the unreimbursed loss is deductible if you itemize your tax return. For more information about the Heartland Disaster Relief Act, read the IRS’s Publication 4492-A: Information for Affected Taxpayers in the Midwestern Disaster Areas.
Tags: Tax Tips
This entry was posted on Monday, January 25th, 2010 at 2:47 PM and is filed under Tax News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
