Jackson Hewitt(R) Offers Taxpayers in Presidentially-Declared Disaster Areas Important Casualty Loss Information

PARSIPPANY, N.J.— Gulf Coast-area taxpayers who were affected by Hurricanes Katrina, Rita and most recently, Wilma clearly desire to recoup the most from their casualty losses. For them, knowing what, how and when to claim their losses on their tax return is vital. Jackson Hewitt Tax Service(R) (NYSE: JTX) offers taxpayers in Presidentially- declared disaster areas important information on claiming casualty losses, as well as determining whether it is in their best interest to claim those losses by either amending their 2004 tax return or waiting to make the claim on their upcoming 2005 tax return.
"Casualty and theft losses are generally deductible only in the year the casualty occurred," said Mark Steber, Vice President of Tax Resources at Jackson Hewitt. "However, for Presidentially-declared disaster areas, such as those locations affected by Hurricanes Katrina, Rita and Wilma, taxpayers can choose to either claim their losses on their 2005 tax return or file an amendment to their 2004 tax return."
Which option is best? Taxpayers who claim the loss immediately by amending their 2004 tax return will receive quicker access to money resulting from any refund to which they're entitled. However, there is also a benefit to waiting.
Taxpayers who choose to make a casualty loss claim on their 2005 tax return may realize a greater tax savings, especially if their income in 2005 is significantly lower than in 2004. Generally, taxpayers should wait until they are certain of this year's income, and then compare that amount to 2004 before deciding which tax year to claim their casualty loss.
For example, Sue is single and lives in New Orleans. Her income in 2004 was $30,000 and her estimated income for 2005 is $20,000. Sue lost all of her household goods as a result of Hurricane Katrina. If Sue amends her 2004 tax return and claims her $10,000 casualty loss immediately, she could get a refund of $2,019 without any additional itemized deductions. If she waits to claim her losses on her 2005 tax return, her refund could be as much as $2,517, which is $498 more.
"We always recommend that taxpayers review their individual circumstances and take advantage of the largest tax benefit available to them," adds Steber. "It's best to consult a tax professional to ensure that those affected by the recent hurricanes are making the best choice for their specific tax situation."
Taxpayers who can claim casualty losses due to Hurricane Katrina, or any other qualified disaster in 2005, have until April 17, 2006 to file their 2005 return or amend their 2004 tax return.
With more than 5,400 locations across the country, the tax professionals at Jackson Hewitt can assist taxpayers in assessing and claiming casualty losses, as well as amending their prior year tax return. To locate the Jackson Hewitt office nearest to you, please call 1-800-234-1040. For more information on casualty loss, including a comprehensive household inventory checklist, visit www.jacksonhewitt.com, go to the "Tax Resource Center" and click on "Disasters and Casualties."
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX) is the second largest tax preparation service company in the United States, with over 5,400 franchised and company-owned offices in 49 states and the District of Columbia during the 2005 tax season. Specializing in electronic filing (IRS e-file), the Company provides full service, individual federal and state income tax preparation and facilitates related financial products. Most Jackson Hewitt offices are independently owned and operated. Jackson Hewitt is based in Parsippany, New Jersey. More information about the Company may be obtained by visiting the Company's Web site at http://www.jacksonhewitt.com.
Sheila Cort, Vice President, Corporate Communications,
+1-973-630-0680, Sheila.cort@jtax.com, or
Allison Jackson, Senior Manager, Communications,
+1-973-630-0681, allison.jackson@jtax.com,
both of Jackson Hewitt Tax Service Inc.