Thursday, April 2, 2009

Possible Extra Tax Deductions for federally declared disaster areas such as Hurricane IKE

I am not an accountant or tax professional, but, based on this article a friend sent me this morning, it is my understanding that there are some significant tax deductions that can be made for losses incurred as a result of Hurricane Ike. Everyone should consult a tax professional about their specific circumstances to see if their losses qualify.

Basically, the article explains that you can deduct any casualty losses that you experienced during Ike that weren't covered by insurance. It's significant because in prior years, there were limitations on the amount you could deduct based on your AGI (adjusted gross income). However, Congress recently passed legislation that eliminated that limitation for federal disaster areas -- like Houston during Hurricane Ike. It is her understanding if you itemize, it is another itemized item; and if you don't itemize, you can add it on to your standard deduction.

I know that many people incurred significant expenses for things that may not have been covered by their homeowner's insurance -- like tree removal. For example, some people in my neighborhood had $10,000 in out of pocket expenses for tree removal. These neighbors may be eligible for significant tax savings and not even know it !! As my friend said -- her accountant was not even aware of this deduction until she told him! Definitely worth checking out!

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