How Natural Disasters Impact Tax Liability

adminjian — Tue, 10 May 2016 19:08:50 +0000

Natural disasters turn your life upside down in every way imaginable. The last thing you want to deal with is more stress at tax time after surviving a major natural disaster. Here is an overview of how your tax situation will be affected by a natural disaster whether you are an individual or a business owner.

Property Tax Liabilities

Even if your home is destroyed and no longer standing, you still own the land. That makes you financially responsible for the continued payment of property taxes. You are only released of this liability upon the sale of your property. However, there may be loopholes that your tax preparer can find to waive the payment of property taxes following a natural disaster.

Available Credits & Deductions

Automatic aid from government organizations and government-funded organizations may not take care of you and your family for long after a natural disaster. There are provisions in place where you can file for a tax reduction to allow you more available money to rebuild your life.

Claiming Losses

Whether you own a residence or a business, you can file claims for losses on your tax return due to natural disasters. It is ideal to work with a tax preparation specialist to ensure that you are making the correct calculations. You can claim the loss of a home, property and business revenue.

Bottom Line

Following a natural disaster, it is important to keep your records together. This may be one year that you cannot file your own taxes due to loss itemizations and getting through worksheets for specific tax credits. Tax breaks typically do not last forever, but extensions and reductions do help.

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How Natural Disasters Impact Tax Liability