Tax returns can also assist flood victims

Tax returns can also assist flood victims

HORRY COUNTY, SC (WMBF) - Taxpayers should be aware that they may be entitled to certain tax breaks that can really be beneficial during this time.

Taxes may not be high on your to-do list right now, but tax breaks can play a part in the process and the financial recovery.

Those living in counties declared disaster areas after the flooding may be granted late filing and late payment relief.

"There's a lot of people that may be in need, a lot of people still dealing with the flooding right now," said Darryl Vick, an H&R Block Senior Tax Advisor. "So it's an informational thing, I think that's the greatest thing that we're trying to do our part. And people need to know that there's help out there."

Many homeowner's and renter's insurance policies don't cover natural disasters or flooding. Claiming disaster-related casualty losses for damaged or lost property is a way you can find financial relief. This also includes cost not fully reimbursed by insurance.

You should also be aware that a disaster-related casualty loss may either be claimed on a tax return for the year the disaster occurred or on the prior year's original or amended return.

For example, a loss occurring in 2015 may be claimed on the your 2015 tax return filed in 2016, or on an original or amended 2014 return filed in 2015. While claiming the loss on the 2014 return results in a faster tax refund, waiting to claim the loss may result in greater tax savings.

"Amending the prior year is going to be advantageous to get the process started quicker, but that's not necessarily going to be the most advantageous to you. That's why I say it's probably best for a person to go in and speak to a tax professional."

If your tax records were lost in the flood, the IRS will waive the usual fees and expedite requests for a copy for a tax return.

You can also use your charitable contributions to lower your tax liability.

For example, if you have a marginal tax rate of 25 percent you can save $25 for every $100 eligible donation. The first step is to give, but it has to be to an eligible charity. And this is only if you want to deduct your contribution. The deadline for the 2015 tax return is December 31, 2015, which means that in order for your contributions to be deductible, you have to give by that date.

You also must keep good records to substantiate your donations. The final step is to itemize your deductions.

Most organizations, other than churches and government entities, must apply to the IRS to become a qualified charitable organizations.

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