Disaster Loss

Are you in an area declared as a federal disaster by the president? Well, congratulations: you can claim a tax break! Silver lining, eh?

You can claim a disaster loss as a tax deductible loss if you’re in a federally declared disaster area and you’ve had to deal first-hand with natural-disaster BS like a flood, a fire, a tornado, or an earthquake. You can claim losses on your home and items in it, as well as vehicles.

Better yet, you can choose to deduct the loss in the year that the loss occurred, or you can deduct it from the previous year if that’s a better deal for you as a taxpayer. Time is money, so many taxpayers just do the deduction for the previous year to reap those deductions now rather than later.

No double-whammy allowed though. You can’t deduct losses that your insurance is picking up the tab for, just the remainder (what’s not covered).

For more info, check out the Robert T. Stafford Disaster Relief and Emergency Assistance Act from 1988, which has all the deets.