Types of Tax Deductible Storm Losses

8/20/2019 (Permalink)

Storm damage in Arlington Heights, IL

Four Fundamental Areas of Storm Loss

Commercial properties are expensive to maintain and even more expensive to repair. When seasonal storms kick up and create significant losses for businesses, it can leave many owners looking for relief. Thankfully, when tax season rolls around, storm damage might actually be tax deductible. However, that depends on a couple of factors. First, do you have commercial insurance? Second, did you use your policy to make a claim? If you didn't, then you will not be able to make a deduction for losses accrued, but if you did, then you should have no problem come tax time. However, you will still need to understand the four fundamental areas of storm loss to record and claim everything properly.

1. Wind

Wind damage can account for a lot of property loss, especially when tied to significant storms, like hurricanes and tornadoes. This type of damage can account for many losses, such as broken windows, lost shingles and sheathing as well as damages to property landscaping.

2. Water

The most common form of storm damage tends to relate to water losses. Flooding and excessive rainfall can lead to significant issues, from foundational problems to roof leaks and more. While not every area requires flood insurance, it is a wise purchase for those businesses at risk to help offset potential recovery expenses.

3. Fire

While it may seem unlikely, storms can lead to building fires. For example, flooding can lead to electrical disturbances, which can spark a fire. Also, and more commonly, lightning strikes can cause sudden rooftop blazes.

4. Restoration

After storms have settled and the damages assessed, you will need to contact your insurer and a storm restoration specialist in the Arlington Heights, IL, area. While you may not want to make an insurance claim for the losses you incurred during the storm, the only way to file for deductions is to use your insurance policy first. Then, you can file deductions for the percentage of the recovery and restoration you actually paid for.
Storm damage can be expansive and costly to mitigate. However, if you file a claim and call for assistance, you can recover some losses through deductions.