Tax Breaks During Natural Disasters

5/9/2022 (Permalink)

Tax Relief In The Event Of A Natural Disaster

If your business in Brunswick, ME, was recently affected by storm damage, you may have recourse to a few different federal compensation methods. This financial recovery is usually available independently of your insurance status. Read on to discover if these benefits apply to you.

1. What Counts?

Most weather-related damage to your business is tax deductible. This means that the cost of repairs can be subtracted from the federal taxes that you owe. This is one of many ways the government offers assistance to get local businesses running again, which in turn leads to economic recovery. Note that simple accidents, wear and tear, forms of negligence do not apply. The damage must be the direct result of a hurricane, flood, earthquake, or similar event.

2. How to Process?

For businesses suffering storm damage, flood damage, or other types of disaster losses, nonitemizers can make claims. Be sure that you don't try to claim anything that has already been reimbursed by your insurer, as these items are not eligible for federal tax compensation. Be sure to keep all tax records, whether paper or electronic, in a safe place. Both your adjuster and any federal inspectors will need to review these documents in order to verify insurance and tax claims. FEMA maintains a website with more information about national emergency areas, which may be a source of additional aid.

3. Resolution

Since you have access to the funds you need to resolve the damage to your business, you can begin the flood cleanup process. Start as quickly as possible, since ongoing damage from water retention may become a further insurance liability in the future. Have the contact information of a qualified cleanup professional ready before severe weather strikes.

With proper record keeping and knowledge of a few tax code details, you can position your business to take advantage of federal resources and minimize storm damage disruption.