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Learn the tax lay of the land, and turn casualty losses into tax gains

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in Small Business Tax,Small Business Tax Deduction Strategies

If you fall prey to a natural disaster or some other casualty—including theft—you may be able to write off some of your financial loss. And with the right tax moves, you’ll get an even bigger deduction.

For starters, tax law doesn’t place limits on damage to business property. So, you can write off 100 percent of business-casualty losses that insurance or other aid doesn’t cover.

On the other hand, if your personal property is damaged, you can only deduct casualty and theft losses that exceed 10 percent of your adjusted gross income (AGI) after you subtract $100 for each casualty or theft event.

Example: Let’s say a fire damages your home and your AGI is $100,000. If you suffer a $25,100 loss, you can write off $15,000, saving $4,200 in tax in the 28 percent tax bracket. The calculation:

Amount of loss $25,100

Less per-event floor ($100)

Tentative deduction $25,000

Less 10 percent of AGI ($10,000...(register to read more)

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