As part of the new tax law changes passed in late 2017, casualty loss deductions became easier to take form many taxpayers. The change in the law allows for these casualty losses to be deducted even if you take the standard deduction rather than itemizing your deductions as described above. Affected individuals and businesses in areas of Louisiana and Mississippi are getting a helpful leg-up from the IRS. Their deadline to return file and/or submit tax payments has been extended from on or after August 26, 2012 to Jan 11, 2013. The IRS is providing this relief to the entire state of Texas. But taxpayers in other states impacted by these winter storms that receive similar FEMA disaster declarations will automatically receive the same filing and payment relief.
That can be a good reminder to regularly review not only your disaster preparedness, but your overall plans as well. If you have clothes packed in a “go bag”, you can swap them out to adjust for the change in seasons for the next 6 months. This is especially important to do if you have young children, since they rapidly outgrow their clothes and supplies. One of the best things that you can do to help prepare your finances for a disaster is to have an emergency fund.
- A Form 1040 return with limited credits is one that’s filed using IRS Form 1040 only (with the exception of the specific covered situations described below).
- Many Americans got a shock last year when the expiration of pandemic-era federal benefits resulted in their receiving a smaller tax refund check.
- As a part of the Coronavirus Response and Relief Supplemental Appropriations Act recently signed into law, the IRS announced that they have begun issuing a second round of stimulus payments to eligible tax filers.
Having something like this is especially important if you live in an area that is susceptible to forest fires, where you may have to evacuate with minimal notice. Ready.gov has a site with tips on how you can build your own disaster preparedness kit. Answering these questions can help you as you start to make a plan. If you’re not sure where to start and are feeling overwhelmed with analysis https://turbo-tax.org/ paralysis, then just make a decision to start somewhere. In an emergency (or even when preparing for an emergency), the best thing that you can do is to already have some disaster preparedness tips in your back pocket and act on them. Learn what to do if you’re in a federally-declared disaster zone—or if you’re not sure if you are—and how that affects your taxes and tax deadlines.
House Passes Tax Relief Act With A Decisive Bipartisan Vote
The most significant helping hand offered by the IRS, the casualty loss deduction, provides an accelerated tax refund when you live in an area proclaimed as a “federally declared disaster area” by the president of the United States. Alabama – An unbelievable forty-two counties in Alabama were declared a federal disaster area in April and May of 2011. Since the bad storms started on April 15th in the area, taxpayers in the affected counties get tax relief from the federal individual deadline, which was on April 18th this year. Taxpayers in the affected areas have until June 30, 2011 to complete their federal tax return, payment, and 2010 contribution to their IRAs. In addition, casualty losses due to the disaster can be taken on either their 2010 or 2011 returns. Tax law provides additional assistance through the casualty loss deduction.
For those who pay estimated taxes, this means you will not have to pay them on June 15, 2011. See more information at Joplin area disaster tax relief. Individuals may also deduct personal property losses that are not covered by insurance or other reimbursements. Taxpayers can visit IRS.gov 24 hours a day to get answers to tax questions. IRS.gov is the quickest and easiest option to get help.
In addition to preparing for natural disasters, you should also consider how prepared your finances are for disaster. A financial disaster or emergency can come in many different shapes and sizes. It might be the loss of your job, reduction in hours or an unexpected major expense.
Decide What Disasters You’re Preparing For
The tax relief is part of a coordinated federal response to the damage caused by the harsh winter storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov. Many Americans got a shock last year when the expiration of pandemic-era federal benefits resulted in their receiving a smaller tax refund check. That unwelcome surprise raises the question of what taxpayers can expect this year. In addition to extended hours during the work week, the IRS will again offer special Saturday hours at many TACs across the country February through May. On these special Saturdays, taxpayers can walk in to receive all services routinely provided at participating offices, except for cash payments.
Currently tax relief is available to any area designated by FEMA. Taxpayers in certain storm impacted localities designated by FEMA will automatically receive the same filing and payment relief. The current list of eligible localities is available on the disaster relief page on IRS.gov. On average, more than 867,000 Americans experienced hardship from natural disasters each year between 1980 and 2010, according to the disaster information site PreventionWeb. Historically, the Internal Revenue Service acknowledges the financial impact of devastating storms, droughts, forest fires and earthquakes with extended deadlines and tax relief, rather than issuing new tax credits.
Video: Tax Benefits for Federally Declared Disasters
As part of expanded taxpayer service efforts, nearly 250 IRS TACs around the country will extend their weekly office hours to give taxpayers additional time to get the help they need during the filing season. If you are claiming the disaster loss on your tax return be sure to write the Disaster Designation, “California, severe winter storms, flooding, landslides and mudslides“, in bold letters at the top of the form. You may be eligible for an extension to file your return and pay your tax bill if you are in a federally declared disaster area.
This page also includes prior tax relief provided by the IRS in disaster situations based on FEMA’s declarations. You don’t need to apply for this relief if your address of record with the IRS is in one of the qualifying parishes. This includes both individuals and businesses if the principal place of business is listed in these areas. The relief is automatically applied and there’s no deadline for requesting it. If you have unreimbursed disaster-related losses, you may be able to get a tax break.
If FEMA adds more areas to the disaster area, taxpayers in the additional areas will qualify for the same relief. Returns that were originally due on July 15, 2020 and extended to October 15, 2020, do not get an extension of time to pay. This is because the original payment deadline of July 15, 2020 fell before the Hurricane Laura disaster period. With TurboTax Live Full Service, a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted. And if you want to file your own taxes, you can still feel confident you’ll do them right with TurboTax as we guide you step by step.
And more taxpayers could end up owing this year, especially given that more people took on side gigs last year to compensate for higher costs, Steber said. Some of them might not have paid quarterly self-employment taxes and could owe the IRS come April 15, he noted. Tax filing began today, with the IRS accepting tax returns starting January 29.
Taxpayers often see a generic message stating that their returns are still being processed and to check back later. The new updates will reduce the need for taxpayers to call the IRS for answers to these basic questions. The IRS plans to continue expanding the information available on Where’s disaster tax relief turbotax My Refund? Many homes and businesses could be severely damaged or destroyed, including important tax records within those structures. Providing disaster relief gives these taxpayers time to put their lives back together and get to a position to accurately fulfill their tax responsibilities.