IRS reminds Alabamians affected by April tornadoes about special tax benefits

HUNTSVILLE, Al.
The Internal Revenue Service is reminding Alabamians affected by the April tornadoes that they may be eligible for special tax benefits, including filing an immediate claim for a refund due to storm damage losses.
Affected taxpayers with property in the 43 Alabama counties declared federal disaster areas after the April tornadoes and storms generally can claim storm damage losses on their 2010 tax returns now instead of waiting to claim them on their 2011 tax returns next year, said IRS spokesman Dan Boone.
"We want people to be aware that option is there," Boone said. He recommended checking with a financial adviser to figure out which is the best option.
The affected taxpayers can claim a casualty loss now by amending their 2010 tax returns, Boone said. However, the option of claiming the storm losses on 2010 returns expires after April 16, 2012.
"We can help prepare the casualty loss claims," Boone said.
The Huntsville IRS office is located at 5123 Research Drive in northwest Huntsville and its hours are Monday through Friday, 8:30 a.m. to 4:30 p.m. The office is closed on federal holidays.
Boone suggested making an appointment; the office number is 256-539-0642.
"December would be a good time to do this," Boone said.
The IRS provided some common questions and answers about disaster tax relief:
Q: Who is considered eligible for IRS disaster tax relief?
A: Generally, at the time of the storms, if you lived in, owned a business in or had necessary tax records stored in a qualifying county that was federally declared, you are considered by the IRS to be "affected" by the disaster and eligible for tax relief.
Q: Is there anything special I should write on my correspondence with IRS to be sure it's processed quickly and correctly?
A: Yes, to receive expedited service from the IRS, affected taxpayers must put the disaster designation, "Alabama/Severe Storms, Tornadoes, Straight-Line Winds and Flooding," at the top of any tax return or disaster-related correspondence sent to the IRS.
Q: Since I lost all my tax records in the storms, can I get a copy of my 2010 tax return from the IRS?
A: Yes. Affected taxpayers can get expedited copies of prior year tax returns at no cost. Fill out and file IRS Form 4506 and write the disaster designation across the top to get the fee waived.
Q: What is a casualty loss claim and how do you calculate it?
A: A casualty loss can be claimed for damage or loss of property due to storms, tornadoes, floods, fires or even theft.
It requires some calculating, but in simple terms, a casualty loss is the difference between the value of your property right before the disaster and right after it, less any damage reimbursements.
There are also other factors that are taken into consideration, so we suggest you visit our website, IRS.gov, for more information, or call the IRS Disaster Hotline toll-free at 1-866-562-5227.
Q: What types of receipts and documents are needed to file a casualty loss claim?
A: Pictures of the property before the storms and after them are always helpful to document the damage.
Also, be sure to keep receipts from repairs and rebuilding of your property as they are helpful in calculating the casualty loss.
Remember, too, that if you replace heating and air systems and other energy-related items, you may be eligible for a tax credit for those when you file your 2011 taxes next year, so keep those receipts and energy certification labels.
Q: Who can benefit most from claiming a casualty loss?
A: Before you claim a casualty loss, you have to deduct any damage reimbursements from insurance and other sources.
So, people who had little or no insurance coverage at the time of the disaster and who got no other reimbursements usually benefit the most from claiming a casualty loss.