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If you are a qualified small business owner, entrepreneur or employee who works from home either part or full time, the IRS allows you write off associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses. There are two options for claiming the Home Office Deduction on your federal tax return.Read More
President Trump recently issued disaster declarations for several counties in Texas, as well as counties in Florida and the U.S. Virgin Islands, impacted by recent hurricanes Harvey and Irma. While this makes residents of these areas eligible for federal financial assistance, it also opens the door for potential tax savings.
If you or someone you know has experienced a significant financial loss due to the recent hurricanes (known as a “casualty loss” in tax lingo), this loss is potentially deductible. The amount of the loss can be determined in one of two ways:
- Add up the total amount of expenses that it takes to restore your property to its original condition, minus whatever insurance reimbursements were received. This is the deductible loss.
- Obtain a broker opinion or appraisal on the value of your property immediately before and immediately after the casualty. The reduction in value resulting from the casualty, less any reimbursements you receive, is the deductible loss.
Business losses are given somewhat more generous treatment than personal losses, but personal losses can still create a substantial tax benefit. Personal losses are usually limited to only that amount of the loss which exceeds 10% of your adjusted gross income, but the balance is still deductible.
Since these areas are government-declared disaster areas, the loss can be claimed either on your tax return for 2017, or you can file an amended return for 2016 and claim the loss for that year. The purpose of allowing taxpayers to claim the loss on their 2016 return is to produce a (relatively) immediate refund which will get money into their hands more quickly than waiting for the 2017 return to be filed.
If you have experienced a substantial loss due to either Hurricane Irma or Hurricane Harvey, substantial tax benefits are potentially available to you. Below is a list of the counties in Florida and Texas, as well as the islands in the USVI, which are eligible for disaster-related tax benefits.
Aransas, Austin, Bastrop, Bee, Bexar, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Ft. Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Sabine, San Jacinto, San Patricio, Refugio, Victoria, Waller, and Wharton.
Brevard, Broward, Charlotte, Citrus, Clay, Collier, DeSoto, Duval, Flagler, Glades, Hardee, Hendry, Hernando, Highlands, Hillsborough, Indian River, Lake, Lee, Manatee, Marion, Martin, Miami-Dade, Monroe, Okeechobee, Orange, Osceola, Palm Beach, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, St. Lucie, Sumter, Volusia
U.S. Virgin Islands:
St. Thomas, St. John
If you or someone you know has experienced a significant financial loss due to the recent hurricanes, please don’t hesitate to CONTACT US right away to find out what tax breaks may be available. We’re here to help!
When you file your tax return, you usually have a choice whether to itemize deductions or take the standard deduction. Before you choose, it’s a good idea to figure your deductions using both methods. Then choose the one that allows you to pay the lower amount of tax. The one that results in the higher deduction amount often gives you the most benefit. Here are six tips to help you choose!
Calculate your itemized deductions. Add up deductible expenses you paid during the year. These may include expenses such as:
- Home mortgage interest
- State and local income taxes or sales taxes (but not both)
- Real estate and personal property taxes
- Gifts to charities
- Casualty or theft losses
- Unreimbursed medical expenses
- Unreimbursed employee business expenses
Special rules and limits apply. Visit IRS.gov and refer to Publication 17, Your Federal Income Tax for more details.
Know your standard deduction. If you don’t itemize, your basic standard deduction for 2017 depends on your filing status:
- Single $6,350
- Married Filing Jointly $12,700
- Head of Household $9,350
- Married Filing Separately $6,350
- Qualifying Widow(er) $12,700
Your standard deduction is higher if you’re 65 or older or blind. If someone can claim you as a dependent, that can limit the amount of your deduction.
Check the exceptions. Some people don’t qualify for the standard deduction and therefore should itemize. This includes married couples who file separate returns and one spouse itemizes.
Use the IRS’s ITA tool. Visit IRS.gov and use the Interactive Tax Assistant tool to help determine your standard deduction.
Consult a certified tax specialist. The policies and procedures used by the IRS to determine what is deductible are constantly changing. An experienced tax specialist knows the rules, understands tax law and has the most current information about what deduction options may be available.
William D. Truax and his friendly team of Enrolled Agents (EAs) and licensed tax preparers have been helping individuals and businesses address tax debt and compliancy issues for over 30 years. He is licensed to represent taxpayers before the IRS and is also a member of the Bar of the United States Tax Court.
If you need assistance or have questions about which deduction option might work best for your situation, please contact us today for a FREE consultation. We’re here to help!