Hurricane Info and Tax Incentives

Either Gulf Coast hurricane can impact your Federal Income Taxes. NOTE: This is a brief summary and should be used only as a guide. Read the IRS web site and/or seek professional assistance for your specific situation.

Here goes: Tax breaks can be available for storm victims and those who aided them. The Katrina Emergency Tax Relief Act provides certain unique deductions. While it appears that the Act is only for Katrina victims, it now appears that it is applicable to Rita as well. The key? Those who live in a presidentially declared disaster area and or were affected by a hurricane.

For instance, certain income may not be taxable (e.g., some of the FEMA money or other public assistance). Obviously, property losses are included. Read the fine print. Also, premature retirement account withdrawals (such as IRA and 401ks) under certain circumstances – for example: to pay for hurricane damages. Relief contributions made “in kind” or cash money and of course, mileage. (Volunteers who drove between August 28th and 31st and deduct 28.35 cents and between September 1st and December 31st it is 33.95 cents – normally, it is 14 cents per mile.) Now you better understand why it is imperative you go to