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TAX NEWS - 2010

Disaster tax tips

As Alex, the first hurricane of the Atlantic season, bears down on Mexico and the South Texas coast, it's time for the official annual hurricane tax relief post. 

OK, it's a bit late for my fellow Lone Star Staters and our neighbors to the South, but for the rest of us, this is a good, real-life reminder to get ready.

The first thing to remember is take care of yourself and your family, then your property.

If you're in a hurricane evacuation zone, leave!

Disaster financial plans: Also get prepared financially.

Get some cash, and be sure to break those ATM $20s into smaller bills; the stores that won't take credit cards will appreciate that.

Speaking of credit cards, have at least one that's got sufficient room to get you through days and possibly weeks in motels, eating out, etc.

In the car as you're heading out, be sure to bring your actual financial disaster preparation kit, a bag or container that includes insurance policies (health, home,  auto), medical records, bank account numbers, Social Security card, and any other financial documents you have on hand. In fact, make copies of all this stuff and then put your originals in a safety deposit box or send to a trusted relative who lives outside the storm strike zone.

If your information is stored on your computer, be sure to download it to a CD or flash drive and stick that in your disaster kit, too.

Recovering from the storm: If you sustain any damage from a storm, remember that you might be able to get some disaster relief from the IRS.

When an area is designated a major disaster area by the president, which is the norm after Mother Nature gets nasty, special tax rules apply.

The key tax provision is the option to claim your disaster losses on your current year's tax return (the year in which the disaster occurred) or file and amended return from your previous year's taxes which might get you more money, and sooner, from the IRS.

The tax date choice is yours. You'll need to run the numbers to see which tax year filing will get you the most tax money.

And don't forget about your state taxes. In many instances, states also offer special relief for storm victims. Check out the ol' blog's state tax departments page for links to your revenue office.

I realize that you're not thinking about taxes now. And I hope you don't face any losses that will require you to do so. But just in case, now you know.
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