To our Business Family:
What a week it was dealing with Hurricane Harvey! We hope that this e-mail finds you safe and dry – although for some, I know it will not.
Baity & Assoc. had a few leaks from the roof areas, but all client and work documents made it through just fine. For the most part, our staff was also personally spared –only one had a small amount of water in their house. No one was injured and that is the best news of all!
For those of you who have sustained damages and/or losses to personal and/or business property, this e-mail is primarily for you. Unfortunately, for tax purposes, the IRS will want documentation to prove that you have had a loss in a Nationally Declared Disaster Area. Even if you don’t live in one of the declared counties, since Baity & Assoc. is your tax preparer and we are in one (Harris), for tax purposes you are included as well.
Below are two guides from the IRS regarding how to gather documentation you may need to include the losses on your tax return(s). These pdfs include tips on best practices for recreating expenses and estimating the Fair Market Value of the lost or damaged property. They also include very helpful worksheets that can be used to keep track of all items and their values. Please refer to the attached guides for any questions about how to determine the value of your lost or damaged property.
Disaster Resource Guide: https://www.irs.gov/pub/irs-pdf/p2194.pdf
IRS Disaster Workbook: https://www.irs.gov/pub/irs-pdf/p584.pdf
To summarize their information, you will need:
- Original value of the property (home, vehicle, personal property, etc.)
- Fair Market Value (FMV) before the disaster
- Decrease in value due to the disaster
- Amount received in insurance payouts to replace the property
Basically your backup is to take as many pictures as you can and provide us with any documentation on the values and insurance payouts. Save any and all receipts for expenses to repair and/or replace property that has been damaged. Not all will be deductible, but better to have and not need than the other way around!
Please know that we will be with you through-out the tax filing season and do our best to determine all deductions and credits available to you.
Debra Baity, and the Staff of Baity & Assoc. Tax and Financial Services, Inc.