Tax Tip: Tax Relief for Disaster Areas
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Victor J. Blue/Bloomberg via Getty Images(NEW YORK) — Millions of people were affected when Superstorm Sandy blew through about a third of the country last fall. Couple that with hurricanes that hit the South and wildfires that spread in the West, and it’s likely that many taxpayers this year will be asking what disaster area deductions they can take.
As Eric Smith with the IRS explains, taxpayers can claim losses in the year the disaster happened, or on the previous year’s taxes.
“If you’re in the disaster area, given that it happened in 2012, you can do it on 2012, on the return you’re filing now, or in some cases, people might find it advantageous to go back and amend a 2011 return and claim it for that year,” he says.
Doing so can benefit people who already know the loss isn’t covered by their insurance, Smith notes.
“It gives them the opportunity to file right away and get some early tax benefit,” he says.
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