Georgia government officials and meteorologists are still sniping at each other over the timing of severe weather warnings in advance of this week’s debilitating snow in the Atlanta area.
But they can all agree on one thing: It’s a massive disaster.
The tiny bit of good news is that Georgians, as well as Alabamians and residents in other parts of the country unaccustomed to severe winter weather, might be able to get some tax relief for their troubles.
Casualty loss situations
Most of the time, we think of weather-related disasters arriving in the form of hurricanes or tornadoes. But fires, burglaries and, yes, winter storms cause serious problems for plenty of other Americans every year.
Tax law says that any damage, destruction or loss of property from any sudden, unexpected or unusual event can be claimed as a casualty loss on Schedule A that’s filed along with the federal Form 1040.
This week’s inclement weather across the South counts as unexpected, at least in the eyes of local officials who didn’t get salt and sand trucks on the road. And it definitely is unusual.
So damage from the weather could count as a casualty claim on affected property owners’ 2014 tax returns.
What are we talking about? Your pipes froze and then burst, causing substantial water damage to your home. That oak in your yard dropped an ice-covered limb on your roof, opening up a sizable hole. And, of course, don’t forget that spin on the frozen freeway that sent you into the guardrail and then to the auto body shop.
Regular rules still apply
There are two key things to keep in mind with these situations.
First, since these storms are not likely to be classified as major disasters, you can’t make any loss claims until next year, when you file your 2014 tax return. But gather up all the information about the loss, along with the relevant receipts, and put them in a safe place you can get to this time next year.
Second, all the regular rules covering casualty losses apply. The biggie here is that you must reduce your loss amount by any insurance reimbursement you receive.
Still, it’s worth gathering all the information and documentation related to your winter storm loss now so that if you can claim it next year, you’re ready.
And keep this in mind as 2014 rolls along. Many of us will no doubt face plenty of situations throughout the year where we’ll suffer some kind of disaster or casualty loss.
When Uncle Sam is willing to help out in those instances, be sure to take the assistance.
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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”