Jackson Hewitt(R) Provides Important Tips Regarding Casualty Loss
Important tax considerations in the wake of Hurricane Dolly
BROWNSVILLE, Texas, Aug. 5 // PRNewswire-FirstCall // -- Casualty loss following a natural disaster or other unforeseen event can be difficult for taxpayers to assess. Taxpayers in and around the Brownsville, Texas area that were directly affected by Hurricane Dolly need to understand the tax and financial implications as they start to assess damages. The tax preparers at local Jackson Hewitt Tax Service(R) offices can assist taxpayers in declaring all of their losses as a result of Hurricane Dolly by providing information on the types of damage and losses that will be allowed when they file their 2008 income tax return.
"In the aftermath of a natural disaster such as Hurricane Dolly, those affected who are seeking to assess the damage they've incurred need to consider the financial and tax implications," said Debbie Muniz, Area Manager of Brownsville, TX. "Taxpayers affected need to ensure that they do not overlook some of the most commonly missed loss claims, including food, wall fixtures, refrigerated medication, holiday decorations, eyeglasses, hearing aids and clothing."
Jackson Hewitt offers the following tips on what to do in case of a natural disaster:
Assess the Damage
After a disaster, it is important to begin assessing your property damage. Immediately following a loss, it is imperative to:
- Document the damage to your property with photographs or video, including any repairs made to the damage. Keep receipts for the repairs or clean-up work.
- File a timely insurance claim for reimbursement of the loss. If you do not file an insurance claim, the IRS may limit your eligible casualty loss to the amount that is not normally covered by your insurance, such as the amount of your insurance deductible.
- Spend your insurance reimbursement wisely. Usually, if your insurance reimbursement exceeds your basis (generally, the original purchase price plus any improvements and minus any depreciation) in the damaged, destroyed or lost property, and you replace those assets within two years with property that costs at least as much as your reimbursement, the amount of your reimbursement that exceeds your basis will not be taxable. If the area is declared a disaster area by the President, you have four years to replace your property if it was damaged or destroyed due to the disaster.
- Keep track of payments you receive. Payments you receive may be included in or excluded from income depending on whether restrictions were attached to how you spend the money, or if you received the payments as part of relief provided to individuals in a presidentially declared disaster area.
Tax Return Amendments
If the President has declared your community a federal disaster area, you can choose which year you may claim losses you incurred. Taxpayers can wait to claim the losses on their tax return for the year the disaster happened or they can claim the loss on an original or amended return for the year preceding the loss in order to get a refund for the loss sooner. The claim against the prior year must be filed by the due date of the tax return for the tax year the disaster occurred.
Taxpayers affected by Hurricane Dolly this year may claim the casualty loss on their 2008 tax return which should be filed after January 1, 2009 and is due April 15, 2009.
Prepare for the Future
Since natural disasters can occur at any time, it is important to be prepared should it happen to you. Here are a few tips that can help you prepare:
- Determine if you have the appropriate insurance for your home, personal items and car(s).
- Keep documents that verify the original purchase price for your home and other items, such as a HUD-1 Settlement Statement, bill of sale and receipts.
- Document your property and its contents through photos, lists and receipts. This will prove invaluable in determining a true assessment of the loss.
- Keep important documents in a safe place, such as a safety deposit box or fireproof and waterproof safe. You might also consider providing copies of important documents -- birth certificates, insurance papers, etc. -- to a family-member or friend who lives out of town for safe keeping and easier access after a disaster.
The Jackson Hewitt Disaster Relief Kit, available at http://www.jacksonhewitt.com/?DisasterReliefKit, is a great tool for preparing for a potential disaster. The kit provides a home inventory list to complete, an explanation and examples of how to claim a casualty loss or gain on your tax return, information on how to replace your lost identification, and links to various websites that may be helpful when dealing with a disaster.
The tax preparers at area Jackson Hewitt locations are available to provide assistance and information. To contact an office or schedule an appointment during designated business hours, call 956-287-8300 in Edinburg, 956-687-1040 in McAllen and 956-968-8982 in Harlingen/Brownsville. To locate the office nearest you, call 1-800-234-1040 or visit http://www.jacksonhewitt.com/Locator/.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX) is an industry leader providing full service individual federal and state income tax preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at http://www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service(R) office nearest to you, call 1-800-234-1040.
SOURCE Jackson Hewitt Tax Service Inc.