Jackson Hewitt(R) Franchise Shares Tax Tips on Preparing for Hurricanes, Tornados and Other Severe Weather
By: Jackson Hewitt Tax Service | 0 Shares 27 Reads
PARSIPPANY, N.J. // PRNewswire // -- According to The Federal Emergency Management Agency (FEMA), there have already been 49 disasters declared thus far in 2010,* with several months still remaining in the year. With annual hurricane, wildfire and tornado seasons underway and flood season just beginning, Jackson Hewitt Tax Service® shares tips for taxpayers living in areas prone to severe weather – to help them understand what steps to take should disaster strike and they need to claim losses.
"For the many taxpayers who live in areas prone to natural disasters, it's critical to plan in advance so that they're not left scrambling in the wake of a crisis," said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "For example, conducting a simple inventory of your possessions and keeping related documentation in a separate, safe location are two simple steps to take now. Our free Disaster Recovery Tax Guide, available online at jacksonhewitt.com, provides a comprehensive list of tax considerations related to disasters."
Jackson Hewitt outlined three things taxpayers should do now to be well prepared in advance of a possible disaster:
Take a Home Inventory: Walk through each room in the home and write down a description, cost and fair market value of all items so that you have a record of what you own. Don't forget clothing, furniture, linens, appliances and jewelry as well as outdoor items – all of which are listed on the Jackson Hewitt Household Inventory List online.
Understand How a "Casualty" is Defined and What is Not Covered: A casualty is the damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected or unusual. It does not include damage from routine wear and tear (such as termite infestation or gradual mold damage).
Know How to Document Losses: To claim a casualty loss, taxpayers must prove to the IRS that they owned the property or are contractually responsible to the owner for any damage to the property, and that there was an event that directly caused the loss. "As a general rule, keep any documentation that validates property ownership or the fair market value of the property. But keep these off-site in another location, such as with a family member or in a safe deposit box so that they remain protected if your property is damaged or destroyed," advised Steber.
In the event a disaster occurs, consider taking these steps:
Document Repairs and Replacements: Be sure to compile and save receipts for any repairs made, whether short-term or long-term, or when purchasing replacements of damaged items. Saving documentation related to damaged property, such as police reports, newspaper articles, photographs or videos, bills of sale and copies of insurance claims or appraisals, will help you to support casualty loss deductions.
Know Options for Filing a Claim: If you are living in a federally-declared disaster area, you may be entitled to additional and in some cases immediate tax relief. In general, casualty losses are claimed as itemized deductions; you must be able to itemize on your federal return to be able to claim this kind of loss. However, when an area is declared a federal disaster area, you are not required to itemize deductions in order to claim casualty losses. Claim the loss in addition to other deductions you have, either as itemized or standard deductions.
Consider Amending a 2009 Tax Return: You may not need to wait to file a 2010 tax return in order to get back money for which you are eligible. "Taxpayers who have been affected by a disaster should know that amending a previously-filed 2009 return may be a better option in reporting a tax-related casualty loss and receiving relevant compensation," explained Steber. "Your tax preparer can help you evaluate your options."
Be Aware of Deadlines: The IRS may postpone certain tax deadlines for taxpayers who are affected by a federally-declared disaster. The IRS typically publishes announcements about postponed tax deadlines online at www.irs.gov.
"Each situation is different, so it can be helpful to speak with a local tax preparer after a natural disaster occurs," added Steber. "This is the best way to file properly and to get reimbursed for applicable losses in a timely manner."
For more information about claiming losses, taxpayers can also review the online Disaster Recovery Tax Guide which includes tips on what to do in a disaster, how to replace lost identification and documents, a home inventory guide and more.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with more than 6,000 franchised and company-owned offices throughout the United States, is an industry leader providing full service individual federal and state income tax return preparation. Most offices are independently owned and operated. The company is based in Parsippany, New Jersey.
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