I just got my bike stolen without insurance. What is this talk about tax deductions? can i get it?

Question

I live in houston texas my bike was a 2006 yamaha r6. Please let me know what i can do because i put all my money inbto the bike and now im expecting a baby and need some money... please help

Answer 1

If you itemize your income tax return, you can deduct uninsured claims, if they exceed a certain percentage of your income.  

It's not a tax CREDIT, it's a tax DEDUCTION, meaning, it will lower the amount of taxes you pay to the feds, but you can't get any MONEY back from it.

Answer 2

You can subtract the value of the bike form your taxable income.  The hitch though is this.  The amount you can subtract from your taxable income is only the amount that exceeds (I think) 7 1/2% of Adjusted gross income.  It would work like this.

So let's say your taxable adjusted gross income is $30,000 and the bike is worth $5.000.  7 1/2% of $30,000 = $2250.

The first $2250 of your loss is non deductable.  Take the $5000 and subtract the $2250 and your have $2750 left over.  

You then take your $30,000 taxable income and subtract the $2750 and your new taxable income is $27,250.  If your tax bracket is 15% you're getting a tax break of 15% of $2750 or $412.50.  

This is how medical expenses that you pay out of your own pocket work also.

You in this case are getting a federal tax break for not carrying insurance.  It may not sound like a lot but would you have the american taxpaying public pay you for you loss when you carried no insurance?  Good luck.  This will seem like a minor setback upon your child's birth.

Answer 3

You can deduct the fair market value of your bike but it is no windfall where you are going to be reimbursed for your loss by the IRS.

First off you must itemize deductions. If you take the standard deduction there is no write off.

Second, If the property was held by you for personal use, you must further reduce your loss by $100. The total of all your casualty and theft losses of personal-use property must be further reduced by 10% of your adjusted gross income.

Third, If you claim an ordinary loss, you report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Your loss is subject to the 2%-of-adjusted-gross-income limit.

In the end you might get a slightly larger return but it is not going to be a big deal or you may not qualify for any relief.

The moral of the story - Uncle Sam is not going to be bailing you out buy the insurance.

Answer 4

mmmm