Storm damage to your property may allow you to take a tax deduction on your federal income tax. However, this is an itemized deduction, so you cannot claim it if you take the standard deduction.
Calculating Your Loss
The IRS limits the size of your allowable loss. As of the time of publication, your allowable loss was the smaller of your cost basis for the property or the decrease in the fair market value cause by the damage, minus $100.
If you have insurance on the damaged property, you must file a claim and reduce the amount of your loss by the amount you are reimbursed by your insurance policy.
Once you have calculated your allowable loss, reduce it by 10 percent of your adjusted gross income. The result is your tax deduction. So if you calculated a $20,000 loss and had an adjusted gross income of $75,000, your deduction would be $12,500.
You claim your tax deduction by filing Form 4684 and itemizing your deductions using Schedule A.
If you live in a presidentially declared disaster area, you do not have to subtract 10 percent of your adjusted gross income, and you can claim the loss using Schedule L rather than itemizing your deductions.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."