Home / Credit Cards / 8 important life events that will affect your tax burden

8 important life events that will affect your tax burden

[ad_1]

8. Natural disaster

One of the worst events you can face in life is a natural disaster like a hurricane, a tornado, a flood or an earthquake. In these cases, the IRS offers relief from your tax burden in several ways. [3]

First, if you live in an area that has been designated by the federal government as a major disaster area, you can choose to claim disaster-related losses on your federal tax return or your previous statement to get immediate money. You can also decide to wait and claim the loss of taxes for the current year and potentially get more money.

You can get additional financial help from the IRS and others if you are up to date with your federal tax returns. You must determine the amount of loss by taking your adjusted basis on a property before the natural disaster and then calculate how much fair market value decreased after the disaster.

From there, take the smaller of those two amounts and deduct the insurance or any other reimbursement.

Like all life events on this list, it is better to consult with a tax professional.

This article by John Boitnott was originally published on Debt.com.

[ad_2]
Source link

About fulbaibu

Check Also

How to get debt free as quickly as possible - Ask Miss Whimsical

How to get debt free as quickly as possible – Ask Miss Whimsical

How to pay your debt when you live from paycheck to paycheck? Get out of …

Leave a Reply

Your email address will not be published. Required fields are marked *