If a recent disaster has impacted you, there are a few steps you can take.
Filing a loss on the tax return
Depending on your loss, you may claim a deduction on your tax return for losses incurred due to a hurricane or storm. However, your loss must be a federally declared disaster, which is a disaster that occurred in an area declared by the President (for tax years 2018 through 2025). The amount of the loss depends on insurance or other reimbursements, the value, and your tax situation. For more information, review Publication 547, Casualties, thefts, and disasters.
Understand your insurance options
Depending on your loss, you want to ensure you file a claim with your insurance company immediately. Take time to discuss what options you may have available with your insurance agent. Also, inquire about additional living expenses. This option is available to policyholders who may incur living expenses from being out of their homes. If your loss qualifies for this coverage, you may be eligible for reimbursements. For more information, check out the Insurance Information Institute.
Make contact with your creditors.
After a disaster, it is also good to contact your creditors to let them know about your situation if you desire some relief. But make sure to do your homework, get an understanding of what options are available to you. Ask questions, such as –
- Will relief require you to make a lump-sum payment in the future?
- How will it impact your credit score?
- How long can you expect to obtain relief?
Seek out federal assistance
DisasterAssistance.gov is a great resource to help provide financial aid to those recently impacted by natural disasters. The great thing about this website is that you can enter your current address and provide the closest disaster recovery centers near you. It also offers current programs that may be available such as financial, housing and home repair, student aid, food, and other assistance programs currently available.
Kemberley Washington, CPA writes two blogs, Kemberley.com and 21daysof.com. She owns Washington CPA Services, LLC, and teaches online classes at Kemversity.com. Follow her on social media @kemcents!