If a Florida property is damaged in a flood or hurricane, its owner may be entitled to a tax deduction for the losses that have been incurred. However, there are several conditions that must be met to qualify for it. First, the damage must have been caused by a storm recognized as a federal disaster. Second, the deduction is only available if damages were more than 10% of the owner's adjusted gross income.

Also, the benefit is only available to those who itemize deductions on their tax returns. As a result of the Tax Cuts and Jobs Act, the standard deduction increased to $12,200 for single filers, and it increased to $24,400 for married couples who are filing a joint tax return. Therefore, it is now more likely that a person or couple will take the standard deduction as opposed to itemizing.

IRS data shows that 154,274 taxpayers claimed a deduction for theft or casualty losses during the 2016 tax year. Property owners are encouraged to bolster their emergency fund and review their insurance policies prior to a hurricane or other major storm. An emergency fund should be large enough to cover three to six months worth of expenses. It should also be large enough to pay a hurricane deductible, which can be up to 5% of a home's value.

Of course, the deduction can benefit property owners who do not have appropriate insurance for their water damage claims. In addition, though, it can be useful for owners who do in fact have coverage but whose insurers have denied their claims or have made an insufficient settlement offer. People who are in this latter category might want to meet with an attorney who has experience in handling homeowners' insurance coverage disputes.

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