Jackson Hewitt Reminds Taxpayers About Disaster-Related Tax Considerations During Hurricane and Flood Season
By: Jackson Hewitt Tax Service | 0 Shares 31 Reads
PARSIPPANY, N.J., Sept. 29, 2011// PRNewswire // -- Disasters – such as hurricanes, floods and wildfires – can strike at any time, and the best defense is planning ahead and being prepared. To arm taxpayers with what they need to know, Jackson Hewitt Tax Service® has developed a free online Disaster Relief Kit, available at www.jacksonhewitt.com.
The kit features valuable information on critical topics concerning what to do in a disaster situation. Included is a home inventory guide, tax specific tips on claiming casualty and theft losses, and guidelines for replacing identification and documents.
"If you have suffered property losses from a disaster, such as a fire, hurricane, tornado or flood, you may be able to take related deductions on your next tax return," said Mark A. Steber, chief tax officer, Jackson Hewitt Tax Service Inc. "Understanding the proactive steps you can take now, such as completing an inventory of your home and possessions, is just one way to be prepared. Many of these steps are simple, yet they can become quite significant if a disaster strikes."
Steber shares the following tips for taxpayers to be aware of when a natural disaster strikes:
Know How "Casualty" is Defined: 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 What's Not Covered: Several costs related to a disaster are not considered deductible losses, such as the cost of repairing damaged property, restoring landscaping to its original condition or cleaning up after a casualty. However, if these repairs meet certain conditions, you may be able to use these costs as a measure of the decrease in fair market value of your property.
Documentation is Key: As a general rule, you should always keep any documentation to support the basis or fair market value of your property separate from your property. Scan copies and keep either in a document storage location online, such as Jackson Hewitt's MyTaxManager, or on a backup drive. Make sure you keep copies of the backup drive with a family member, a friend, or in your safe deposit box, to prevent loss of these documents when your property is damaged, destroyed or stolen.
Be Aware of Federally Declared Disasters: Additional tax relief may be available if an area is declared a federal disaster area. The Federal Emergency Management Agency (FEMA) reports that last year there were 81 federally declared disasters, with 85 so far in 2011*.
Options for Filing a Claim: Personal casualty losses are reported on Form 4684, Casualties and Thefts, Section A and entered on Schedule A. You must be able to itemize deductions on your federal return to be able to claim your loss. If your property is covered by insurance, you should file a timely insurance claim for reimbursement of the loss.
Know Your Deadlines: The IRS may postpone certain tax deadlines of taxpayers who are affected by a federally declared disaster for up to one year. These deadlines may include filing income, excise and employment tax returns, paying taxes associated with those returns, and making contributions to a traditional IRA or Roth IRA. The IRS typically publishes announcements about postponed tax deadlines online at www.irs.gov.
Know Where to Go for Help: In addition to its online Disaster Relief Kit, Jackson Hewitt has offices open around the country throughout the year to assist taxpayers with questions surrounding casualty losses.
"Each situation is unique, and there are a variety of rules that may apply," said Steber. "Speaking with a local tax preparer about your situation can help you file properly and get reimbursed for applicable costs sooner."
Based in Parsippany, NJ, Jackson Hewitt Tax Service Inc. is an industry-leading provider of full service individual federal and state income tax preparation, with franchised and company-owned office locations throughout the United States. Jackson Hewitt Tax Service® also offers an online tax preparation product at www.jacksonhewittonline.com. For more information, or to locate the Jackson Hewitt® office nearest to you, visit www.jacksonhewitt.com or call 1-800-234-1040. Jackson Hewitt can also be found on Facebook and Twitter.
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