Some Uninsured Quake Losses Are Deductible : Taxes: The temblor was declared a federal disaster, so victims can declare damages on their 1993 or ’94 returns.

With Friday the deadline for filing income taxes, the disaster-weary can at least look forward to some tax relief: Uninsured casualty losses from the Jan. 17 Northridge earthquake--as well as from last fall’s fires and mudslides--are deductible on individuals’ federal and state returns.

Moreover, because the Northridge quake was declared a federal disaster, victims of the disaster can choose to take those losses on either their 1993 or 1994 returns. That is a major advantage for people who expect their 1994 incomes to be lower.

But doing all this additional figuring can take time--which is why many people are expected to ask the Internal Revenue Service and California Franchise Tax Board for filing extensions this year.

In Simi Valley and Fillmore, the two Ventura County cities hardest hit by the quake, tax preparers said the disaster has left many victims scrambling to file extensions or take advantage of damage-related tax deductions.

“People have had other things on their minds, so the information is sort of dribbling in,” said Beverly Gage, a bookkeeper who has run her Fillmore tax business for 41 years. “And a lot of my clients are still assessing damage, so they’re going to hold off until 1994 to file for deductions.”

Simi Valley tax preparer Bud Ganowsky said about 20% of his clients have no earthquake insurance.

“There are a lot of factors to weigh when you’re deciding whether to take the deductions in ’93 or ‘94, things like income and inflation,” Ganowsky said. “But sometimes it just comes down to time--do you have all the information now, do you want to file an extension, or are you willing to wait another year?”

Ganowsky said his clients are about evenly split between those who are taking the deductions now and those who are waiting for 1994.

Many taxpayers have lost important documents that they need to file their 1040s because the quake damaged their houses or local post offices.

Others will have to file extension requests with the IRS (Form 4868), because “they are still waiting for the simplest of records,” one tax preparer said.

Those records may include W-2s from their employers or 1099s showing investment income.

In such cases, tax experts said, the government expects taxpayers to reconstruct 1993 income and deductions--which can be done using copies of checks written throughout the year.

Even figuring out your deductible casualty loss can be a headache.

“First you have to get a real estate appraiser to tell you what the value of your property was before the disaster and after,” said Alan Kennan, a tax partner in the Los Angeles office of accounting firm Grant Thornton.

Insurance payments must be subtracted from that tentative loss, producing a net loss figure.

But there is a catch: To be deductible, casualty losses must exceed 10% of your adjusted gross income--basically income before itemized deductions--plus $100.

Rep. Howard L. Berman (D-Panorama City) has introduced federal legislation to make uninsured losses 100% deductible for victims of declared national disasters.

In California, state Sen. Herschel Rosenthal (D-Los Angeles) has authored a bill that would provide identical relief for disaster victims on their state tax returns.

Neither bill is expected to pass by Friday, spokesmen for Berman and Rosenthal said Tuesday.

However, if the proposed legislation is enacted later, taxpayers entitled to the bigger write-offs could file amended returns. The tax breaks would apply to losses on declared disasters that occurred on or after Jan. 17, the day of the quake.

Deciding whether to take the limited loss that is available now this year or next year may be easy for people faced with extensive rebuilding--but still waiting for disaster aid.

“The question is how badly do you need cash now?” said Kennan. “Fixing your house may be more important than waiting a year to get a bigger deduction.”

Requesting an extension to sort all this out before filing taxes can provide nearly six months’ reprieve--to Oct. 14 this year, since Oct. 15 falls on Saturday.

But even with a filing extension, the IRS and the California Franchise Tax Board still expect checks for about 90% of the amount owed to be in the mail by midnight this Friday, April 15. And although it is possible to get an extension for paying federal taxes, it is certainly not automatic.

And if it’s absolutely impossible to even borrow to pay your federal taxes, you can file an “Application for Extension of Time for Payment of Tax” (form 1127) by midnight Friday. Accountants say the IRS usually will agree to negotiate some kind of payment plan.

The state does not grant extensions per se, said Franchise Tax Board spokesman Jim Shepherd. But he said people with quake damage should make the state aware of their situation.