Can I Deduct Personal Property Losses at Tax Time?

Losses to one’s personal property are never easy to deal with, especially when it comes to your finances.

As you recently finished up your taxes or are working on an extension, it is not even too early to be thinking about next tax season.

In the event you have recently dealt with a loss of personal property that was not entirely covered by insurance, some of the unreimbursed loss could be an allowable deduction on your federal income tax return.

Consumers looking to qualify for the deduction have to demonstrate that losses were substantial. In the event you were substantially underinsured or had a major catastrophe deductible, you could have a large unreimbursed casualty loss.

In many cases, you can deduct the loss to the extent it surpasses 10 percent of your adjusted gross income, less $500. In the event the property is used for a trade or business, rules will be different to some degree. Given that the rules can vary, it is always best to check with your tax preparer regarding any questions you have.

If the case is you were the victim of a federally declared disaster you could also qualify for a varied package of tax benefits through the National Disaster Relief Act of 2008. The federally declared disaster needs to have taken place after Dec. 31, 2007 but prior to January of 2010 to be eligible.

The most important thing for consumers is to be sure to have all receipts in hand, along with insurance paperwork, police reports if needed and any other documentation that will support your case.

It is also possible that medical expenses topping 7.5 percent of one’s adjusted gross income could qualify for a deduction when you’re doing your taxes.

Losses to personal property can be traumatic in several ways.

Being able to recover some of your financial losses can help to some degree make the events a little bit easier.