As Mississippi taxpayers who suffered disaster-related losses due to Hurricanes Katrina or Rita begin to prepare their 2005 tax returns, the IRS has announced an extension until Oct. 16, 2006 to claim those losses on their prior year’s federal income tax return.
“Individuals have an additional six months to claim disaster-related losses on their 2004 federal income tax return instead of their 2005 return. The original deadline for individuals choosing this option was April 17, 2006. The extra time will allow taxpayers to make the choice that is best for them,” said IRS spokesman Mark Green.
The Department of Homeland Security’s Federal Emergency Management Agency (FEMA) urges those affected by the hurricanes to seek tax counseling this year to take advantage of all available tax relief through the IRS’s programs.
Taxpayers should write the name of the hurricane in red at the top of their return to speed processing of their claims. The new extension date does not affect the regular tax-filing deadlines for either 2004 or 2005 federal income tax returns.
Those who have already filed their prior year’s return can file an amended return (Form 1040X for individuals).
IRS Publication 4492—Information for Taxpayers Affected by Hurricanes Katrina, Rita and Wilma—provides a complete explanation of the disaster loss rules and special instructions for claiming losses. This publication, along with other disaster-related information, is available at www.irs.gov or can be obtained by calling the special IRS disaster hotline toll-free at 1-866-562-5227.
The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers who need them to file amended returns claiming casualty losses.
Taxpayers with questions about state taxes may contact the Mississippi State Tax Commission at 1-601-923-7000 (not a toll-free number) or refer to http://www.mstc.state.ms.us/katrina.htm.
Hurricane victims should keep accurate records to document a casualty loss deduction. This would include before and after photographs of damaged property, estimates of repairs, appraisals and any other documentation to aid in establishing the amount of property damage or value of the property.
Was this article valuable?
Here are more articles you may enjoy.