3 Tips for Deducting Commercial Storm Damage On Your Taxes
Property owners can deduct commercial storm damage on taxes for damage and losses directly caused by adverse weather.
Deducting damage can help to compensate owners for losses that are not covered by insurance. Owners cannot deduct damage resulting from storms if the property is insured but you do not file a claim.
- Report losses caused by storm damage under casualty loss. This type of loss describes items damaged or lost due to accidents, theft, or acts of nature. This tax deduction is based on the value of the property not covered business insurance policies and additional endorsements or riders. Keep in mind that only losses due to primary damage are tax deductible, not secondary damage or progressive deterioration.
- Business losses are not subject to the same requirements as personal losses. Individual itemizers need to reduce the amount of the loss by $100 and deduct the balance to the extent that it exceeds 10% of their adjusted gross income. When it comes to losses involving commercial property, non-itemizers can also claim losses.
- Check to see if your region is a presidentially-declared disaster area. Unique filing opportunities are available to business owners in disaster areas. You may be able to deduct casualty losses on the current or past year's tax return to save the most money. Amend the tax return for the last year or factor in these losses in your next return.
Look over the list of declared disaster areas to see if Renton, Washington is listed. This may provide you greater flexibility in deducting storm damage. Refer to IRS publication 547 on Casualties, Disasters, and Thefts for guidelines on tax deductible types of damage and how to write off losses resulting from storms or natural disasters. Between your insurance and any deductions you obtain, you should be able to offset the cost of commercial damage restoration services.