Further, because tax laws are always changing, residents should keep updated on deductions and credits available to them, said Corey Sutton, southwest Atlanta district manager for H&R Block.
“Because Cherokee County was included in the federal disaster area, residents who had damages due to the storms may be able to claim casualty losses on federal tax returns,” Sutton said.
Many homeowner’s and renter’s insurance policies have restrictions, including some that don’t cover natural disasters or flooding. Claiming disaster-related casualty losses for damaged or lost property is a way taxpayers can find financial relief for recovery costs that came out of their pockets. This includes homeowner’s and renter’s deductibles on any claims made that were disaster-related.
Homeowners, property owners and vehicle owners can claim the unreimbursed portion of their loss from the tornado that hit Cherokee County this past fall.
Taxpayers in a federal disaster area who incur casualty losses have a choice about when to claim their losses.
“Taxpayers can claim the loss on their 2011 tax return (the year the disaster occurred) or amend their 2010 return to include damages that were not covered by insurance,” Sutton said.
While claiming the loss on the 2010 return results in a faster tax refund, waiting to claim the loss may or may not result in greater tax savings.
Affected taxpayers may need to reconstruct tax records lost in the disaster to apply for a disaster loan or grant. The IRS will waive the usual fees and expedite requests for a copy of a tax return (Form 4506) or for a transcript of a tax return (Form 4506-T).
Below, Sutton provides tips for the upcoming tax season. Tuesday is the first day the Internal Revenue Service will allow taxpayers to e-file their taxes.
* Parents who have adopted a child in 2011 can claim a $1,000 tax credit, as well as credits for expenses for childcare that can bring additional breaks, Sutton said. Adoptive parents can also claim and adoption credit expense for up to $13,170 in refundable credit.
* “In prior years, the energy efficient home improvement credit was $1,500,” he said. “It has gone down to $500 this year.” This includes storm windows, additional insulation and other measures that make your home more energy efficient.
* The American opportunity credit provides up to $2,500 for up to four years for each student.
“The tuition and fees deduction also provides a deduction in taxable income up to $4,000,” Sutton said.
* The lifetime education credit gives adults $2,000 in credit for going back to school to increase their skills.
* “With that, there are job search related deductions,” Sutton said, adding that long distance phone calls and vehicle mileage incurred while applying and interviewing for jobs can apply to that deduction.
* At www.hrblock.com/w2, employees can get early access to their W2 forms for free.
“Though actual filing begins Jan. 17, a lot of companies have already released them prior to that date,” he said, adding that taxpayers can search for their employer via the website.