The federal government is changing how Iowans who were affected by last year’s disasters can file their taxes. Before the Heartland Disaster Tax Relief Act was approved last fall, those affected could deduct only some of what they lost.
Now, taxpayers can deduct all of their losses, including houses, charitable contributions and medical expenses. Iowa Congressman Dave Loebsack, a Democrat from Mount Vernon, says the new law will help thousands of Iowans save money. Loebsack says, “Those who were affected directly by the floods, those who helped those affected directly by the floods, those who have children going to college in flood-affected areas.”
Internal Revenue Service tax specialist Kristy Maitre says the new law allows Iowans to take more deductions. Maitre says, “Basically, it means that you can deduct 100% of your loss as long as you can itemize your deductions.” Those deductions, which are called casualty losses, include a house but can also include medical expenses, charitable contributions and mortgage interest.
There are also new tax credits for businesses affected by disasters. Some of them include credits for retaining and housing employees as well as clean-up costs. For property and business owners who have already filed tax returns, it’s not too late to amend them. For those who need more time past the April 15th deadline, the I.R.S. will grant extensions until October.