Help Cover Your Losses by Amending Your Tax Return

If you have a casualty loss from a disaster that occurred in a Presidentially declared disaster area, you can choose to amend last year's tax return to reflect that loss. For those who suffered property damage as a result of the September 11 terrorist attack, this means you can amend your 2000 tax returns.

If you make this choice, the loss is treated as having occurred in 2000. Claiming a qualifying loss on a previous year's tax return can reduce the tax for that year, which can result in, or increase the amount of, a refund.

If you choose to deduct your loss on your 2000 return or amended return, include a statement saying that you are making that choice. The statement can be made on the return or can be filed with the return. The statement should specify the date or dates of the disaster and the city, town, county and state where the damaged or destroyed property was located at the time of the disaster.

Before amending a tax return, take the time to determine whether it is financially wiser to deduct the losses from your 2000 or 2001 tax form.

For more information, see page 10 of IRS Publication 547 - Casualties, Disasters and Thefts (Business and Non-Business).