National Hurricane Season is officially in progress. If you suffer damage to your home or personal property, you may be able to deduct the losses you incur on your federal income tax return. Here are ten tips you should know about deducting casualty losses:
1. Casualty loss. You may be able to deduct losses based on the damage done to your property during a disaster. A casualty is a sudden, unexpected or unusual event. This may include natural disasters like hurricanes, tornadoes, floods and earthquakes. It can also include losses from fires, accidents, thefts or vandalism.
2. Normal wear and tear. A casualty loss does not include losses from normal wear and tear. It does not include progressive deterioration from age or termite damage. Read More
Z is for Zones. I tried to make this “Z is for Zoinks”, but I could not figure out how to make Scooby phrase about taxes, so let’s try zones instead. (Maybe next year for Zoinks.) There are many different kinds of zones in the world of taxes. The federal government declares disaster zones when natural disasters strike; the most recent was the flooding in Colorado. When those federal disaster zones are declared, the IRS normally extends deadlines for people that live in those zones. If you were working on your individual return and then your house got washed away 2 weeks before the deadline, it would be hard to get it filed on time so the IRS and states are understanding about those situations.
Another type of zone for taxes are the Job Opportunity Building Zones or JOBZ which are designated by Minnesota. JOBZ are located throughout Minnesota and inside those areas businesses can be eligible for sales tax exemptions, income tax exemptions, property tax exemptions and also a refundable income tax credit that is based on payroll. The idea is to encourage investment in specific areas of the state by new businesses. The business has to be willing to locate in one of the JOBZ areas, but the tax breaks can be very lucrative for the business. The rules are complicated and once you qualify there are conditions placed on your qualification, but it is definitely something worth exploring if the business has flexibility of location.
Taxes A to Z – still randomly meandering through tax topics, but at least for 26 posts in an alphabetical order.
In accordance with Circular 230 Disclosure