IRS Tax Relief for Disaster Area Residents: Things You Should Know

Those affected by the Presidential Declared Natural Disasters may have a surprise waiting for them when they go to file their taxes. When the floods hit the Piedmont, Missouri area everyone was told that they could claim their losses when they filed their 2008 taxes. In addition other natural disasters that have struck the nation especially the Midwest have been placed for tax relief. But do not get your hopes up just yet. There are stipulations to this that may knock you out of getting that tax relief.

First off to apply for the tax relief you will need to have a detailed list of everything that you lost. Within this list you will need to document how much you paid for each item and how much that item would sale for prior to being destroyed in a natural disaster. This can be time consuming and in most situations you will have to use your best estimated guess on some things. Then again anything tax related can be time consuming and in most cases complex.

Secondly if you received FEMA like most people in a presidentially declared natural disaster area, you may not be eligible for the tax relief. When dealing with someone at H&R Block while doing my taxes I was informed that since I had received assistance from FEMA I could not claim any tax relief for my losses. She said this was like double dipping and it was not allowed. My confusion came from the fact that back in March of 2008 when all this was going on in my area I had been told that FEMA assistance had no bearing on the tax relief. Now I know that since FEMA helped I was not eligible for the tax relief. I have discovered that I was not the only one from my area who got told separate things concerning the tax relief. Others have said that they were told the same thing as me during the disaster and then when going to file their taxes this year for 2008, they were being told different things. It seems some tax preparers still say that FEMA assistance has no bearings on tax relief while others say that it does.

When dealing with the tax relief for any presidentially declared natural disaster area make sure that you check with your tax preparer to understand how assistance from FEMA affects you. This seems to be a very confusing area for even tax preparers. Remember that no matter what your tax preparer says in the end it is you who will answer to the IRS for what is on your tax return. My suggestion is that if your tax preparer says that you can still claim the tax relief then take the time to put together a detailed list of your losses as per the IRS requirements. Then make sure that when you file your taxes to purchase some kind of assurance that if the tax preparer makes a mistake then the company will pay any fines associated with the mistake. I am not sure if all places offer this but I do know that H&R Block does offer this kind of assurance for a low fee.