The following is a reprinted article from the Decatur Dispatch, January 2010.
Georgians impacted by recent severe storms may be able to increase their standard deduction by claiming their net disaster losses suffered from the federally declared disaster. Provisions of the National Disaster Relief Act allow all taxpayers to claim the casualty loss deduction regardless of their income level. In addition, the law waives a requirement limiting casualty losses to those that exceeded 10% of the taxpayer's adjusted gross income.
"Eligible taxpayers may be able to deduct disaster losses, even if they don't itemize, through an increased standard deduction," said IRS Spokesman Mark S. Green. "This increased deduction is limited to unreimbursed losses. You cannot claim losses that were covered by insurance."
The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A of Form 1040.
The increased standard deduction for disaster losses is a benefit that could help many Georgia residents. More than two-thirds of the returns filed by taxpayers each year claim the standard deduction instead of itemizing deductions.
"It's also important for taxpayers impacted by this federally-declared disaster to note this on their tax returns," said Green. "They should write "Georgia/Severe Storms and Flooding" at the top of their tax returns and any other documents filed with the IRS to identify themselves as storm victims eligible for disaster relief."
For more information on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts, and Form 4684 , Casualties and Thefts. Also, the IRS offers Publication 584, a workbook you can use to calculate personal property losses. These helpful forms and publications can be found on the IRS Web site at IRS.gov. For disaster information call IRS Disaster Hotline at 1-866-562-5227 or call the IRS toll-free number for general tax questions at 1-800-829-1040.
We hope you were not affected by the storms and floods last fall. However, if you were impacted or know someone that was, the information below may be very beneficial. Please feel free to pass this on to friends or family that may find the article helpful as well.