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Disaster Deductions Could Mean More Federal Tax Refund DollarsFebruary 21, 2011
NASHVILLE, Tenn. – Many Davidson County residents still trying to rebuild their homes and livelihood lost in the May 2010 flood could get much-needed financial help in the form of federal income tax refunds.
The IRS Casualty Loss tax deduction is a valuable source of aid for Metro flood victims, but it requires extensive paperwork and may require assistance from a tax professional. With the April 15 tax filing deadline fast approaching, the Mayor’s Flood Recovery Team and local tax experts are advising residents impacted by the flood to begin tax preparation as soon as possible.
“This deduction available to qualifying taxpayers will put needed dollars into the hands of many who have been affected by last year’s floods, the overall impact of which will serve much like a ‘stimulus plan’ for the local economy,” said Neel Deshpande, of the Mayor’s Office of Flood Recovery. “Residents and businesses alike could qualify for loss deductions, but significant paperwork is involved and the rules are complicated, so it’s best to consult an accountant or tax professional.”
“Seven Easy Steps to Casualty Loss,” a video and information flyer available at www.nashvillerecovery.com, explains the deductions and outlines the process flood survivors should follow to file their 2010 income tax. Because Davidson County is a declared federal disaster area, residents can also amend their 2009 return to report the May flood as a loss event.
Metro residents who suffered significant losses due to the flood, including landslide and rain damage, are eligible for casualty loss deductions. In addition, losses in the current year income can be carried back to recover taxes paid the previous year. To learn if you may qualify, contact the United Way’s 2-1-1.
Free help with preparing casualty loss claims is available at the IRS Taxpayer Assistance Center, 801 Broadway in Nashville, which is open weekdays from 8:30 a.m. - 4:30 p.m. (except federal holidays). You can also call the IRS Disaster Assistance hotline toll-free at 1-866-562-5227.
April 15, 2011 is the deadline for filing 2010 income tax returns or to amend a 2009 return if already filed. In addition to the “Seven Steps to Casualty Losses” flyer and video, the Middle Tennessee Legal Aid Society prepared a “2010 Tax Guide for Flood Victims.” The Tax Guide and an instructional video are available at www.nashvillerecovery.com.
Other online resources include:
General IRS Disaster Tax Relief: http://www.irs.gov/businesses/small/article/0,,id=156138,00.html
IRS Disaster Loss Kit for Individuals: http://www.irs.gov/pub/irs-pdf/p2194.pdf
Mid-TN Legal Aid Society Tax Relief Video and IRS forms: http://www.las.org/booklets/tax_problems/2010_flood_tax_guide
United Way Restore the Dream Centers: http://www.unitedwaynashville.org/nashvilleflood/restore-the-dream-centers/