topic Can an insurance deductible be deducted in NJ? in Get your taxes done using TurboTax

Can an insurance deductible be deducted in NJ?

leeleses — Tue, 04 Jun 2019 00:32:59 GMT

I had a flood in my basement in NJ and I had to get a new furnace, new hot water heater, and new dryer. I've been searching and it looks like there are no deductibles or credits for any of these things, but I wanted to ask the forum. Can I somehow declare the $1000 insurance deductible a loss, or claim this loss any other way for a deduction or credit? At the moment it's looking like I'm about $12,000 short of having to itemize my deductions. LOL Right now it looks like I'm taking the standard deduction. Is there any possible tax benefit for this loss on the NJ state return? I'm thinking no, but I wanted to ask! Thank you!

Unfortunately, there is not a tax benefit for this loss o...

Cindy0H — Tue, 04 Jun 2019 00:33:00 GMT

Unfortunately, there is not a tax benefit for this loss on the NJ state return. The insurance deductible cannot be deducted in New Jersey.

New Jersey is considered a "gross income tax" state, meaning individuals are taxed on gross income with no itemized deductions allowed. For this reason, casualty losses are not deductible on state income tax returns.

Casualty Loss has changed this year on the federal return:

When you have items that are lost or damaged as a direct result of a natural disaster, and you live in a federally declared disaster area, you may be able to take a tax deduction for the value of the property that is not covered by your insurance.

If you have other questions about this, please ask in the comment box below:

Thank you SO much Cindy, this was a perfect answer!

leeleses — Tue, 04 Jun 2019 00:33:02 GMT

Thank you SO much Cindy, this was a perfect answer!