If you experienced damage from the storms that occurred in Connecticut on May 15, 2018, you may be eligible to deduct the casualty losses on your 2018 tax return. Per the Tax Cuts and Jobs Act (TCJA), effective for 2018, casualty losses can only be claimed due to an official disaster declared by the President.
On August 20, 2018, President Trump declared the State of CT a disaster relief area. This will allow taxpayers to deduct their unreimbursed expenses on their 2018 tax return.
What is a Casualty Loss?
Per the irs.gov, “a casualty loss can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption. A casualty doesn’t include normal wear and tear or progressive deterioration”.
When making a casualty loss claim, you must deduct any insurance or reimbursement you receive, or expect to receive. Once you have the amount paid out of pocket, then subtract $100 and subtract 10% of your adjusted gross income from that total to calculate your allowable casualty and theft losses for the year.
For any questions relating to casualty loss deductions, contact us at Innovative Tax & Accounting Group, Inc. or visit irs.gov.
(photo credit NBC CT News)