This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Tax Prep Tips For Natural Disasters

NEW YORK (TheStreet) -- Were you the victim of a tornado, flood, fire, hurricane or other natural disaster last year?

According to the Federal Emergency Management Agency, there were 62 declared disasters across the U.S. last year.

Aside from direct relief from Uncle Sam (usually via FEMA), there are some good tax breaks disaster survivors can take on their 2013 tax forms.

United Policyholders, a nonprofit insurance group that helps insurance customers through the process of filing a claim and dealing with personal insurance matters, has released Tax Tips For Disaster Survivors, which is worth reviewing if you've suffered from Mother Nature's worst last year.

Must Read: We Bribe Our Kids, and Other Parental Money Misbehavior

While you should take a thorough look for yourself, here's some of the best advice:

Don't rush your claim. United Policyholders advises not claiming a loss on your past or current year's tax return before there is a "closed transaction" and a settled outcome from the disaster. "Until you receive all the proceeds from insurance, government aid or legal settlements and identify all the damage, you cannot know the true amount of your unreimbursed losses," UP says.

Document everything. The IRS requires thorough documentation on any disaster-related tax claims. UP advises creating a system that works for you to copy, file, organize and keep track of all information. In particular, file the cost basis of property damaged or destroyed in the disaster, along with your insurance claim. That includes your policy and all related documents, checks, invoices, correspondence, reports and estimates, UP says.

Use home appraisals to maximum advantage. UP calls professional appraisals of your home after a disaster highly useful. "This is particularly true if you are underinsured and believe the amounts you will recover from your insurance will be less than the 'cost basis' of your property," the nonprofit says. The group also states that a professional appraiser "can help you prove the pre- and post-loss value of your home and help you make a decision on replacing it by buying elsewhere versus rebuilding." Don't wait to create a checklist. Appraisals of high value personal property items just before and just after the loss are helpful if you anticipate insurance shortfalls for those items, UP says.

To see if you qualify for a disaster-related tax break, check out FEMA's "Declared Disaster" website here. Make sure the damage to your home and property is thoroughly documented, with photos, in case the IRS comes calling.

Nobody wants to experience a flood or hurricane. But if you did, at least get what's coming to within the full capacity of tax law.

It could add up to more than you might think.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $110.38 0.00%
FB $92.07 0.00%
GOOG $626.91 0.00%
TSLA $247.57 0.00%
YHOO $30.71 0.00%


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs