Tax Savings Possible for Wildfire Mitigation
We have received several questions concerning tax benefits available to those taxpayers who spend money on mitigation measures in the areas impacted by the wildfire. The savings are small, but we wanted to get the information out to everyone so they understand the savings that are available to them. You should consult your accountant or financial advisor for more details and how this deduction may or may not apply to you.
Through income tax year 2013, individuals, estates and trusts may subtract from Federal taxable income 50% of the costs (up to $2,500) incurred in performing wildfire mitigation measures that meet certain qualifications and limitations.
This is a Colorado state income tax subtraction only. The mitigation cost qualifies only if it is authorized by a community wildfire protection plan adopted by a local government.
Because the deduction maxes out at $2,500, taxpayers only benefit from the first $5,000 spent on mitigation costs. The maximum tax savings is $116 ($2,500 x 4.63%).
Example: If a taxpayer spends $3,000 on wildfire measures, that individual would be able to deduct $1,500 from their Colorado taxable income for a tax savings of $69 ($1,500 x 4.63% tax rate).
Colorado Springs Together is an independent 501(c)(3) Non-Profit
Colorado Springs Together is a community-driven volunteer effort, and is an independent 501(c)(3) non-profit organization. The team members are distinguished citizens and business professionals in the community facilitating and coordinating a quick and effective rebuilding process for the neighborhoods devastated on June 26th by the fire. The donations received will go towards the activities required to help restore the lives and the neighborhoods affected by the fire at the same time maintaining a strong sense of community during the rebuilding process.