The Internal Revenue Service has issued extensions and tax relief measures as a result of the hurricanes that hit Texas, Florida, Puerto Rico and the US Virgin Islands. The IRS is offering relief to an area designated by the Federal Emergency Management Agency (FEMA) as qualifying for assistance.
The Internal Revenue Service has issued extensions and tax relief measures as a result of the hurricanes that hit Texas, Florida, Puerto Rico and the US Virgin Islands. The IRS is offering relief to an area designated by the Federal Emergency Management Agency (FEMA) as qualifying for assistance.
Tax relief is being offered in three different ways; (1) extension of time for filing and paying taxes, (2) hardship loans and / or distributions from retirement plans, and (3) a deduction for a casualty loss under special rules that apply to federally declared disaster areas.
Automatic extensions until January 31, 2018 have been granted for the following tax returns and tax payments for individuals and businesses located in the Federally Declared Disaster Area -
Tax relief is being offered in three different ways; (1) extension of time for filing and paying taxes, (2) hardship loans and / or distributions from retirement plans, and (3) a deduction for a casualty loss under special rules that apply to federally declared disaster areas.
Automatic extensions until January 31, 2018 have been granted for the following tax returns and tax payments for individuals and businesses located in the Federally Declared Disaster Area -
- Business tax returns that have a valid extension date of September 15, 2017.
- Individual tax payers that have a valid extension date of October 16, 2017.
- Estimated tax payments for individual tax payers that are due on September 15, 2017 and January 16, 2018.
- October 31 quarterly payroll filing deadline.
- Calendar year tax-exempt organizations with an original filing deadline of November 15, 2017.
- Late deposit penalties for federal payroll deposits are being waived.
Hardship Loans and / or Distributions from Retirement Plans Available to Hurricane Victims:
- Participants in 401(k) plans and similar plans such as 403(b) and 457(b) can take hardship loans which are tax free if repaid in five years or less.
- Loans can be for yourself or given to a son, daughter, parent or grandparent who lived or worked in the disaster area.
- IRA’s are not allowed loans but qualify for distributions due to hardship. All IRA distributions are subject to income tax, but not the 10% early distribution penalty.
Tax Deductions for Casualty Losses
- A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected or unusual event such as a flood, hurricane, tornado, fire or earthquake.
- Disaster area losses are federally declared losses that occurred in an area declared by the President to be eligible for federal assistance.
- Items that qualify for casualty loss deductions are your home, household items and vehicles.
- Insurance payments reduce the amount of losses that can be claimed.
- Losses can be personal or business.
- If your loss deduction is more than your income, you may have a Net Operating Loss (NOL). A NOL can be either business or personal and can be carried back to refund some or all of prior year taxes.
