Disaster reliefTax breaks for disaster victims

This year victims of natural disasters may be eligible for a generous break on their taxes.

With earthquakes, massive flooding, hurricanes, and devastating tornadoes sweeping last year, hundreds of thousands of residents across the United States are struggling to rebuild, but to help make their recovery a bit easier, those who suffered losses may be eligible for tax relief.

According to Bob Meighan, the vice president of TurboTax, there are special provisions in the tax code that allow individuals to make deductions if the losses were the result of a federally-declared disaster. In addition, losses from smaller disasters may also be eligible if they exceeded insurance reimbursements.

“It’s a silver lining on otherwise terrible events,” saidMark Steber, the chief tax officer at Jackson Hewitt Tax Service. “Tax laws in many cases are very favorable.”

With more than twelve natural disasters last year causing more than $1 billion damages, many residents will likely qualify for tax breaks.

According to tax laws, losses from natural disasters can be treated like other casualty losses on income tax forms.

A casualty loss is officially defined as “the damage, destruction or loss of your property from any sudden, unexpected or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption.”

Only losses not covered by insurance may qualify for relief on federal income taxes, but individuals must first file a claim with their insurers. In addition to be eligible for deductions, total losses must exceed 10 percent of an individual’s adjusted gross income.