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IRS Tax Relief for Victims of Hurricane Harvey

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  • Safe Harbor Election
  • Loss Carry Back/Forward
  • Hurricane Harvey Deduction Calculation
  • Hurricane Irma & Maria Deductions
  • Amend 2016, for a Quick Refund
  • Deduction for Home & Belongings
  • Tax Relief – 39 Counties in Texas
  • Early Retirement Distributions
  • Sold below Market Value
  • Relocation and Displacement Insurance Deduction

September 30, 2017

 

HURRICANE HARVEY TAX RELIEF

 

We extend our thoughts and prayers to all of you affected by the 2017 Hurricanes. Following these disasters, we offer the following outline and a brief explanation following the outline. Taxpayers should know that the applicability is for declarations of counties in Federal disaster areas.

PLEASE NOTE: SECTION 4-5 ON AMENDING YOUR 2016 RETURN NOW
FOR IMMEDIATE REFUND!

IRS disaster relief coverage includes the following 39 counties in Texas:

Texas: Aransas, Austin, Bastrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Walker, Waller and Wharton.

U.S. Virgin Islands: The islands of St. John and St. Thomas.

Puerto Rico: All Municipalities

Florida: Broward, Charlotte, Clay, Collier, Duval, Flagler, Hillsborough, Lee, Manatee, Miami-Dade, Monroe, Palm Beach, Pinellas, Putnam, Sarasota, and St. Johns Counties.

Jay A. Finn, CPA, LLC, offers a 10-minute free phone consultation followed by another 30-minute free office consultation for those affected by the Harvey or Irma Hurricanes. Many taxpayers are trying to figure out how to pay for the damage. Some have insurance, and many insured, or otherwise, are eligible for FEMA relief for your home or other property.

Herein is the outline with brief explanations. Please note once more that the following statements, unless stated otherwise, apply to Federally declared disaster areas:

Section 1. Tax filing and tax paying extensions:

The IRS has granted any taxpayer affected by Harvey, Irma and Jose victims as it relates to extended filings beyond the six-month extension of September 15 and October 16, respectively until Jan. 31, 2018. These include the tax filings of an individual, corporation, an estate or trust, partnership, S corporation, and employment tax returns. There may be extensions for other tax filing obligations that had a deadline occurring on or after Aug. 23, 2017 (and as to Irma occurring after September 4, 2017). Other timely returns such as the Retirement form 5500 have also been granted an extension to file.
Section 2. Important relief for taxpayers in collections or audit

All those affected taxpayers who are contacted by the IRS for the debt collection or even an audit examination should explain that they or their business were affected by the hurricane or flood. Upon notification, the IRS will consider a delay of enforcement or may reschedule your appointment. Some such contact may include but is not limited to, Automated collection service (ACS) via post, office auditor or an office or home visit by a revenue officer. The IRS may even grant relief for those under IRS criminal investigations by a special IRS agent.

Section 3. What is Not Covered:

While the IRS is offering relief by allowing an additional extension to January 31, 2018, it is not an extension to pay. Payments for personal returns were due on April 18th, 2017 and business (such as corporate and partnerships) were due on March 15, 2017).

Section 4. Tax deduction for Immediate refund possibly in as little as 60 days or for 2017 returns whenever reporting Casualty losses with or without insurance

A) There is no waiver of 10% deductible of AGI before you can deduct a loss tax on your 1040 personal return and you must add it to itemized deductions on Schedule A, so you need to have otherwise enough to itemize rather than taking the standard deduction. There is also a $100.00 deductible per casualty, but in one year you only take 10% off for all disasters. However, your home and its adjacent property are considered one casualty.
B) Also for taxpayers in a federally declared disaster area, have the option of claiming disaster-related casualty losses on the 1040 income tax return for either the year in which the event occurred or the prior year. Getting the greatest tax benefit may require amending your tax return. Doing taxes in a natural disaster year requires tax planning but can yield considerable rewards. Per the IRS in prior hurricanes, once the amended return is filed, you may be able to get your refund generally in 60 days.

Section 5. Immediate relief for special computations for gains after insurance, rentals, and abandonment of property
These issues remain complicated. You should consult your CPA, tax advisor or Jay A Finn, CPA, LLC either before or at time of filing.

1) Partnerships, Corporations, Estates, and Trusts, etc. deductibles of 10% may not apply
Please discuss this delicate matter with your CPA, tax preparer or Jay A Finn, CPA, LLC.

2) Hardships in Retirement plan distributions or loans

If you have a retirement plan, you may access any monies quicker. Also, the IRS will not institute the six-month ban on contributions in defined benefit programs. There are other reliefs for immediate relatives or other dependents outside the disaster area to access their retirements early to help out their families.
8) Charitable and work leave issues
Another program allows employees to trade their vacation, sick or personal leave in exchange for cash payments by the employer through Jan. 1, 2019 should they wish to donate to a charity which has provided relief for the victims of the hurricanes.

3) Proof of Loss
Of course, you must have some adequate proof of your loss. Therefore, in disaster areas, some reconstructing is going to be allowed. Thereby, you need one or more of the following: Pictures before and after at least. Or you may have other documentation such as receipts, witnesses or insurance companies showing the casualty loss.
Also, in the absence of any of the above, you may need to acquire sworn statements from outside parties including your relatives, friends or employees.
We encourage as much investigation into the disaster relief as soon as you can recover from any trauma incurred.

Again, we wish you well from our management and all of our staff,

If You Want To Win, Call Jay Allen Finn (877)720-3477

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