Click here for an update on hurricane disaster relief.
The recent catastrophes in the Gulf of Mexico have impacted millions of taxpayers in multiple states. Damages are predicted to be in the billions of dollars. To help relieve the burden on those who have suffered loss, the IRS has implemented several relief programs. There are also tax deductions available to help with rebuild efforts. Some of these programs require you to live in or receive information from a specific county. Follow this link to see which areas have been identified for disaster assistance.
Taxpayer Relief Programs
The IRS has provided some relief with regards to various filing deadlines and payment due dates. If you are located in a declared disaster area, here are the important things you need to know:
Federal Tax:
- If you live in the affected areas, you get an automatic extension.
- If you live in another area, but need information from an affected location, call 1 (866) 562-5227 to request an extension.
- 2016 tax returns originally due September 15, 2017 or October 15, 2017 will now be due on January 31, 2018.
- 3rd quarter & 4th quarter 2017 estimated tax payments originally due September 15, 2017 and January 15, 2018, respectively, are both now due on January 31, 2018. Please be aware: if you make both payments on the final due date, there could be cash flow planning that needs to happen.
Payroll:
- Payroll deposits due between August 23, 2017 and September 7, 2017 will have penalties abated so long as the deposit was made by September 7, 2017.
- 3rd quarter 2017 payroll reports originally due October 31, 2017 are now due on January 31, 2018.
Texas Taxes:
- A 90-day extension to file and pay certain monthly and quarterly state taxes is available to those in the affected areas. To get this extension you must call the Comptroller at 1 (800) 252-5555.
- Please see the following link to show what types of taxes the Texas Comptroller is offering relief on (https://comptroller.texas.gov/taxes/resources/disaster-relief.php).
Other Considerations:
- Review insurance policies to see what is covered/not covered. Also check with your insurance provider to see if you have business interruption insurance
- Take pictures and document all damage and other costs associated with the damaged property.
- Scammers are out there. Be mindful of documents sent to you, links, and attachments even if they look to be from government agencies.
Deductions Available for Casualty Losses
A casualty loss is a loss due to damage, destruction or loss of property from any sudden, unexpected or unusual event – such as a hurricane. These losses include property that has been partially or completely destroyed and includes the theft of property in the disaster area.
The IRS has multiple ways of calculating the losses depending on the extent of the damage or if it has been stolen. They also give options on what years the deductions can be taken. In some cases you can take the loss on the tax return for the previous year. The amount of deduction you can take is reduced by any insurance proceeds you receive.
To qualify for a deduction under casualty loss, you must have filed a timely insurance claim. The specifics on filing a claim vary from policy to policy, but the sooner the claim is filed the better. Consult with your insurance agent to find out if there are any time limits on making claims. You might also have to get an appraisal of the property to determine how much the value has decreased.
We know all of these factors relating to tax returns, payroll, and property losses are stressful and overwhelming. If you or someone you know has suffered a loss from these recent tragedies, reach out to us and we will help you get back to normal. Contact us at office@atkcpa.com or 210.733.6611.
Written by: Diane White and Gary Turner
