How does a Federal Disaster affect my casualty loss?

By Jason Watson (Google+)

Taxpayers must generally deduct casualty losses in the year that it occurs. However, if there is a casualty loss from a federal declared disaster (such as the Colorado Springs fires), taxpayer may choose to deduct that loss on his or her tax return or amended tax return for the previous tax year of the disaster.

Since casualty losses have limits (such as the first $100 is non-deductible, and then the net 10% of your income is not deductible), picking which year to detail this loss and subsequent deduction might yield better tax consequences. Also, amending a previous tax return, during the summer for example, might expedite tax refunds to help offset the cost of your casualty loss.