Although homeowner’s insurance will cover your property from a variety of damages and threats, not everything is covered.

Actually, insurance companies can be quite tricky with which things that are and are not covered under a homeowner’s insurance policy.

But what many people do not know is that the things that are not covered can often times be written off as tax deductions.

A November 15, 2006 article by Julian Block, of about.com, “How to write off uninsured home losses,” discusses how you can sometimes write off certain items on your taxes that were not covered by a homeowner’s insurance policy.

“Did you know that the tax code allows you to claim tax deductions for household damage caused by thefts, vandalism, fires, floods, hurricanes and others kinds of casualties? But the law imposes several restrictions.”

For an item to qualify for this, it has to be deemed uninsurable by your homeowner’s insurance policy. Everyone knows that any tax benefit has a lot of restrictions and limitations, and this is no different.

First of all, you can not receive a deduction for the first $100 that has been lost, stolen or damaged.

“The major limitation is that total home losses generally are allowable only to the extent they exceed ten percent of adjusted gross income, the amount listed on the last line of the first page of the 1040 form.”

“There are other problems for people with hefty deductions that surpass the ten-percent threshold. IRS sleuths learned long ago that most of them are unable to substantiate their home losses because they neglected to keep adequate records and have to rely on what, at best, are estimates, assuming they are even able to recall, for instance, all those valuable and not-so-valuable belongings stored in their closets. So the ritual response of the feds is to throw out or trim unsupported estimates, a strict approach that has been sustained by the courts in countless decisions.”

This approach to throwing out anything that is not substantiated by records is nothing new and has been upheld for ages.  So before you become another one of the sad cases that just gets thrown out, be sure that you keep track of everything you buy.

The IRS does have a lot of information and booklets available that can help you out if something like this happens to you.

The lesson in all of this is that it is extremely important to inventory the contents of your household.  Although this may sound like a daunting task, it will be beneficial for you in the future.

“Publication 2194 includes a handy workbook with schedules for listing, among other things, clothing, jewelry and a residence’s contents on a room-by-room basis. Schedules for rooms and other areas have separate sheets for the entrance hall, living room, dining room, kitchen, bedrooms, garage, and other sections. Each sheet lists belongings generally found in a specific area.”

“To be sure, it is a disheartening project to list all your possessions, their cost and other information. Still, creating a list in advance is incomparably easier than trying to remember all those details after property is stolen or destroyed. Whether the inventory is a first-time task or an update, it is prudent to keep a copy outside your home in a safe deposit box or some other secure location.”