Special tax Considerations: Taxpayers who have sustained a casualty (sudden, unexpected or unusual) loss from a declared disaster may deduct that loss on the federal income tax return for the year in which the casualty actually occurred, or elect to deduct the loss on the tax return for the preceding tax year. In order to deduct a casualty loss, the amount of the loss must exceed 10 percent of the adjusted gross income for the tax year by at least $100. If the loss was sustained from a federally declared disaster, the taxpayer may choose which of those two tax years provides the better tax advantage.
The Internal Revenue Service (IRS) can expedite refunds due to taxpayers in a federally declared disaster area. An expedited refund can be a relatively quick source of cash, does not need to be repaid, and does not need an Individual Assistance declaration. It is available to any taxpayer in a federally declared disaster area. Depending upon the circumstances the IRS may grant additional time to file returns and pay taxes. Publication Number 2194 ‘Disaster Loss Kit’ can be ordered from the United States Internal Revenue Services as a resource guide.
Click on “Special tax Consideration” for more details.
Go to https://www.irs.gov/newsroom/tax-relief-for-victims-of-hurricane-harvey-in-texas to find details on tax relief for victims of Hurricane Harvey in Texas.