Disaster Victims Need to Document Their Losses Before Cleaning Up Begin

Families and businesses can be devastated by floods, fires, tornadoes or earthquakes. Did you know that your tax return may allow you to deduct damage to, destruction, or loss of property caused by these or other unexpected, sudden events?

According to the National Association of Enrolled Agents(NAEA), the process of obtaining required documents does not have to be difficult. Business owners and residents are encouraged to take photos of and make inventory of all property that has been damaged or destroyed in the disaster. Photograph the entire house and business, as well as personal property.

“It is very important that people take pictures or videos and do a complete inventory of damage before the mess gets cleaned up,”Cynthia Jeanguenat is an enrolled agent in Virginia Beach. “My experience tells me that after the cleanup process has begun, people do not remember what they threw away.”

Jeanguenat suggests IRS Publication 584 to organize a written inventory. “Casualty and Disaster Loss Workbook.”She describes the book as follows: “extremely helpful”Conducting a room-by–room inventory of the damage. You can obtain the workbook by calling 800-829-3676, or visiting the IRS website. www.irs.gov.

A disaster lossThe amount is tax-deductible up to $100. You must also reduce any losses by $100.

A qualified appraisal and records detailing the repairs are required to claim tax deductions for buildings with severe structural damage.

Jeanguenat advises that all claims for damages must first be submitted directly to the property owner’s insurance carrier. Even if the property has not been covered, this will enable Jeanguenat take a casualty deduction.

Consult an enrolled agent for help in your specific situation and professional tax advice. The IRS licenses enrolled agents as tax professionals in America. EAs offer tax preparation, tax advice, and tax planning services. They also help taxpayers solve problems with the IRS.

For assistance in finding an agent enrolled in your area, please call 800-424-4339. www.naea.orgClick here “Find an EA.”