If Hurricane Florence damaged your home or business, your taxes might be the last thing you want to worry about — and the IRS gets that.
Storm damages could range between $19 billion and $28.5 billion, and as much as 85% of damage to residences is uninsured, according to a report by data analyst company CoreLogic. Depending on how severely the storm affected your home or business, you may not have the time, money or documents you need to take care of your tax obligations right now.
To help Hurricane Florence victims, the IRS has announced that it’s giving certain individuals and businesses affected by the storm extra time to file returns and make tax payments.
What does this mean?
If you live or operate a business in a specified county in North Carolina or South Carolina and meet the IRS definition for an affected taxpayer, you’ll have until Jan. 31, 2019, to file returns or pay taxes that were originally due between Sept. 7, 2018, and Jan. 31, 2019, for North Carolinians, and between Sept. 8, 2018, and Jan. 31, 2019, for South Carolinians.
The postponement covers the following eligible taxpayers:
- Those who got an extension back in April and were expected to file their 2017 tax return on Oct. 15, 2018.
- Individuals and business owners with quarterly estimated income tax payments due on Sept. 17, 2018, and Jan. 15, 2019.
- Businesses that needed to submit quarterly payroll and excise tax returns on Oct. 31, 2018.
Plus, as long as businesses made required payroll and excise tax deposits by Sept. 24, they won’t face penalties.
You don’t need to file any paperwork or contact the IRS to take advantage of this postponement as long as your address of record with the service is located in the covered disaster area. But if you get a notice about a late filing or late-payment penalty, you should contact the IRS at the Disaster Assistance Hotline at 1-866-562-5227 to request them to waive the penalty.
How does this help?
When a natural disaster occurs, if you’re a homeowner or business owner in an affected area, you may not be able to meet your tax obligations for a number of reasons.
A business could be forced to remain closed — and lose money — until storm damage is repaired. A homeowner might have lost all their tax paperwork if their home flooded or due to other related damage. A family struggling to repair a home without insurance money may need the ready cash they would have otherwise put toward an estimated tax payment.
Federal law allows the IRS to grant relief to victims in a federally declared disaster area by allotting them more time to deal with tax matters.
Other tax assistance to know about
If you don’t live in an affected area but the records you need to meet a tax deadline were in the affected area, you may qualify for postponement.
For example, if your accountant had all your paperwork at his office and the office was flooded, you may be able to get relief from the IRS by calling the Disaster Assistance Hotline (1-866-562-5227). You may also qualify if you were working in the disaster area as part of relief efforts by a recognized government or philanthropic organization.
What’s more, individual taxpayers and businesses in a federally declared disaster area may be able to take a deduction on their 2018 federal income tax returns for their uninsured or unreimbursed losses. You can learn more about the deduction in IRS Publication 547.
Finally, if you need to obtain copies of past tax returns or a tax transcript from the IRS and live in an affected area, the IRS will waive fees and expedite your request. You’ll need to fill out the appropriate request form (either Form 4506 or Form 4506-T) and write “North Carolina, Hurricane Florence” or “South Carolina, Hurricane Florence” at the top of the form in red ink.
Bottom line
Residents and businesses affected by Hurricane Florence may need a long time to fully recover from the storm’s damages. Taking advantage of the IRS postponement, and any tax deduction they may qualify for, could help storm victims make progress on the road to recovery.