Tax tips for flood victims
It's a deadline that looms over us every year, but even more so this year because of last summer's storms. So with less than a week left to file tax returns, YNN's Megan Cruz spoke with a tax professional to get some tips for those affected by the floods.
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NEW YORK STATE -- "There's no way! How would anybody know? On a regular year, I wouldn't know what forms to fill out," said Leslie Price.
So with 2011 being far from a regular year, Leslie Price knew she had to call her accountant.
Price said, "Having two businesses and a home that were gone, I knew I had to get on this right away."
But others affected by the floods were a bit hesitant to dive right in and now with less than a week left to file, tax professionals are urging them to ditch the extension and tackle their taxes now.
"Casualty losses aren't the easiest thing in the world to deduct because you need to be able to itemize your deductions and not everybody can and your losses need to exceed 10 percent of your adjusted gross income," said H&R Block Tax Professional Pat Catchpole.
In other words, if your income is $60,000, you need at least $6,000 worth of losses to file them on your tax return. If your losses do exceed this percentage...
"Walk through every room and think about every content you have in a particular room and think about what it cost when you bought them," Catchpole said. "That's how you had to do it. Between pictures, memory, your bank account and in some cases, your friends saying 'hey, remember that?'"
Catchpole says to then go to the IRS website.
Catchpole said, "The casualty form has two parts. One deals with individual/personal returns, the other deals with business returns."
"It is very trying and like I said earlier, I know there's going to be things I missed along the way," Price said.
But if you did, that's okay. At H&R Block, they offer something called a Second Look.
It's a free opportunity to have a professional look over what you've filed and if they find you've missed something, they'll help you amend your tax return for up three years.
"And especially someone who's a victim of a flood, it's probably better for them to get that $5,000 in the next month than it is to wait perhaps till they have all this documentation done," Catchpole said.
And a piece of advice from a fellow flood victim?
Price said, "Absolutely have a CPA. Do not do it on your own because your losses, you need to be able to get credit for all your losses. You can't do it on your own, I can't imagine doing it on my own, I wouldn't want to do it on my own."