Taxing Times For Oklahoma Tornado Survivors
While many view tax season as a nuisance, it can be especially frustrating for people struggling to rebound from disasters, like the deadly tornadoes that swept through the state last May.
Some residents of central Oklahoma lost homes, cars and old tax documents, so they’re confused and unsure how to proceed, and that’s left many tornado alley taxpayers with lots of questions.
As Paula McGee filed into the auditorium at the Moore Public Library last week for a forum on “Tax Tips for Tornado Survivors,” she said she didn’t even know where to start.
“Normally I do our taxes, but I'm not sure exactly how to do them this year.”
Paula and her husband Tony had been living in their new home for just two weeks when the tornado tore through their neighborhood and destroyed it. Tony said he hopes this part of the recovery process will be less exhausting than what they’ve gone through so far.
“The tornado was actually the easy part of all of this because it was there and gone,” McGee said.
“Then we had to deal with the cleanup, the cities and all that needed to be done. Then we had to deal with the insurance and last but not least, the dreaded contractors. I'm just hoping this is a lot easier than everything else has been,” he said.
The tax forum was organized by the Oklahoma Insurance Department, and it attracted an overflow crowd of hundreds. While many like the McGees were concerned about the process, their son Terry – who also lost his house – admitted he has other priorities.
“The taxes have been really the last thing I've been worried about. Getting the house rebuilt and dealing with that stuff has been the most important thing,” Terry McGee said.
With everything else going on, taxes can be yet another stressful thing survivors have to deal with. Oklahoma Insurance Commissioner John Doak says April 15 often sneaks up on people after the devastation from a tornado or other natural disaster.
“We know that through many of the major events in the United States, even here in Oklahoma, that some folks come up to tax time and go, ‘Oh my gosh. I've had a loss. How does that impact this year's taxes or last year's taxes and how do I handle that?’” Doak said.
But the fact that many people are in the same boat doesn’t mean there’s a blanket solution for tornado survivors. Todd Pefferman of BKD CPAs and Advisors says it’s more complicated than that.
“Everybody has their own individual situation and everybody's situation is a bit different, and so everybody just needs a little bit of reassurance that what they've got is appropriate and they're not missing anything,” Pefferman said.
Not missing things, he says, like available tax breaks or extensions. Pefferman’s colleague Chris Zach says tax season can be confusing, even without adding a natural disaster to the mix.
“It's very sticky. There's a lot of intricacies as far as what you can take as a loss, if you have a gain, if you lost information, there's just a lot of implications,” Zach said.
But it’s important, he says, for people within a federally declared disaster zone to understand all the available resources. For example, they may have an opportunity to recoup some of their losses by recovering 80% of lost property taxes for five years starting in 2013.
It’s because of things like that, Zach says, that tornado survivors who generally do their own taxes should probably consider calling in the experts this year.
Tornado survivors already have enough on their plates, Zach says, without trying to figure out tax season. And with a professional’s help, moving onto the next step of recovery can become much simpler.