Taxpayers can claim losses from flood damage on '07 forms

The Kansas Department of Revenue reminds Kansas taxpayers who live in any of the recent Presidentially-declared disaster areas that they can claim an itemized deduction for a casualty loss from the disaster on their federal income tax return, a KDOR statement said Thursday.

Taxpayers who itemize are allowed by the Internal Revenue Service to deduct casualty losses that occurred during the year of the loss. On a tax return, the losses are defined as "the damage, destruction or loss of property from an identifiable event that is sudden, unexpected or unusual." Typically, this means the taxpayer must wait to claim the loss on his or her tax return that is due the next year, the KDOR statement said.

According to KDOR, Kansas residents who live in regions that have been declared by President Bush to be disaster areas have the option to amend their tax returns from the previous year and claim the catastrophic losses they suffered this year on their old prior-year tax return. In many situations, amended filing will make taxpayers eligible for an immediate tax refund providing money that can be used to begin needed repairs.

If the total of the casualty loss and any other itemized deductions amount to more than the itemized or standard deduction that taxpayers originally took, refiling may be to their advantage, the KDOR statement said.

A person who chooses to amend their federal tax return from the prior year to claim a refund due to losses incurred in a Presidentially-declared disaster are should also file an amended Kansas income tax return for that year, as their Kansas taxable income will also likely be reduced, generating a refund, the statement said.

Topic 515 and Publication 547, which are both downloadable from the IRS Web site, www.irs.gov., provide more information on this process, as well as forms and instructions on how to calculate and claim the deduction.