What to do when disaster strikes

News Release
For More Information:
Amy Johnson, Senior Manager, Public Relations
E-mail:  ajohnson@ohio-cpa.com
800.686.2727 or 614.764.2727, ext. 341

Ohio CPAs give tips to help flood victims recover financially 

(COLUMBUS, August 28, 2007) – When disasters such as floods strike a community, it can be overwhelming and confusing to those personally affected. The Ohio Society of CPAs offers the following tips to help flood victims cope with the personal and financial devastation in the aftermath of last week’s flooding.

Download a free copy of Disaster Recovery: A Guide to Financial Issues. The guide was created by the American Institute of Certified Public Accountants, the American Red Cross, and the National Endowment for Financial Education to help people affected by natural and man-made disasters.

Secure your property and collect critical information. If you may enter your house or apartment, remove valuables and important documents such as birth and marriage certificates, wills, durable powers of attorney, medical records, old tax returns and bank statements. Guard yourself from possible identify theft by removing anything with bank and credit card account numbers, or social security numbers that can be used to access your personal information.

If you can, make temporary repairs to prevent further damage, but avoid dangerous areas until they are stabilized. The Red Cross or other organizations may be able to help you obtain materials for short-term repairs. Keep records of these repairs, because most insurance policies will reimburse you for the expense; or it may be tax deductible.

Assess your financial position. Prepare a plan for managing your income, expenses, and debt. If you need immediate cash for repairs, housing or other necessities, contact the local chapter of the Red Cross. You may be eligible for disaster relief funds from federal, state, or local governments as well as low-interest loans to cover residential and business losses not covered by insurance.

Notify your insurance company of your loss. They can provide advice about what emergency repairs will be covered. If you cannot immediately return home to live, confirm if you have coverage for living expenses such as housing and food and for how long. Your insurance company may give you an advance check to cover such expenses. Find out if this payment will reduce the amount you ultimately receive for damages to your property or possessions. Tax note: Insurance proceeds used to repair or replace property are tax free in most cases; however, reimbursements you receive for living expenses may be taxable. If your home is uninhabitable, contact utility companies to stop any unnecessary bills or transfer service to your temporary residence until your home is repaired.

File an amended tax return for financial assistance. If your property has been damaged or destroyed by a casualty and your loss meets IRS deductibility guidelines, you may be eligible for a tax refund based on unreimbursed losses. Usually, this means claiming the loss on your next income tax return. However, in those counties that have been declared to be major disaster areas, taxpayers may have additional time to file returns and pay taxes. Individuals and businesses in these areas can accelerate a refund by claiming losses with an amended filing for the prior year’s tax return. Visit www.IRS.gov for more information on tax relief in disaster situations.

Reevaluate your insurance coverage. Inevitably, disasters compel you to reconsider the role of insurance. Evaluate whether you have the right type and amount of property, health, disability, and life insurance.

Consult a CPA. If you have questions about deductible disaster expenses, consult a CPA who is knowledgeable about financial matters and tax issues. To find a CPA in your area, call 888.959.1212.

These personal finance tips are offered by Financial Fitness Ohio, a public service program of The Ohio Society of CPAs. For more smart tips on managing your money, visit www.financialfitnessohio.com.

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The Ohio Society of CPAs, established in 1908, represents more than 24,000 CPAs in business, education, government and public accounting. The Ohio Society’s members not only meet statutory and regulatory requirements as CPAs, but also embrace the highest standards of professional and ethical performance.  This is achieved through ongoing professional education, comprehensive quality review and compliance with a strict Code of Professional Conduct.

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