What You Should Know about Receiving Tax Relief after a Natural Disaster

15 Aug What You Should Know about Receiving Tax Relief after a Natural Disaster

If you’ve been impacted by a natural disaster, you may be eligible for certain types of tax relief from the IRS. The exact types of relief provided will vary depending on your disaster area. However, this article will give you a basic understanding of what kind of relief the IRS generally provides, how you can qualify for it, and how to claim it. Here’s what you need to know.

What Qualifies as a Disaster Area?

First, please don’t assume that you will qualify for disaster relief from the IRS. Generally speaking, the IRS will only provide this type of relief to certain areas that have been declared a major disaster area by the Federal Emergency Management Agency (FEMA). You can find an up-to-date list of qualifying disaster areas on the IRS website, here. Be sure to have the FEMA disaster declaration number, as well as the name of the disaster designation when filing your return.

Typical Types of Relief Offered

As mentioned above, the tax relief available to you may differ depending on the type of disaster impacting you. But in most federally declared disaster areas, impacted taxpayers will receive the following types of relief from the IRS:

• Extension of filing and payment deadlines: In many disaster scenarios, the documents you need to file your return are lost or damaged. For this reason, the IRS will typically offer an extension of both filing and payment deadlines to individuals and businesses within the disaster area. This will give you more time to get those documents together, while also allowing you some time to deal with the repercussions of the disaster before having to think about your tax return. These extensions can also be applied to quarterly tax payments in some cases.
• Claim of casualty losses: If you’re in a disaster area, you may have suffered serious losses as a result. This might include damage to your home, loss of certain possessions, and other costly losses. For those in a disaster area, you may be able to deduct property losses that aren’t already covered by your insurance, or reimbursed in other ways. You can claim these losses for either the year of the disaster event, or the prior year, if you have not yet filed that return. Details for claiming this deduction can be found on Form 4684, Casualties and Thefts.
• Free and expedited copies of returns: As mentioned above, the IRS recognizes that vital documents are often lost in the wake of a natural disaster. With this in mind, they will typically waive the usual fees if you request a copy of any previously filed return. They will also expedite your request so that you can proceed with filing your return as soon as possible.

If you’re uncertain what type of relief is being offered to your area, check the IRS website for your affected area using the link above. Or, speak with one of our Provo tax professionals and we will help you find out.

Qualifying for Relief

As we mentioned, in order to qualify for disaster tax relief from the IRS, you have to be impacted by a federally declared disaster. If you’re physically located in a covered disaster area, the IRS will automatically identify you as qualifying for filing and payment relief, and you don’t usually have to worry about requesting it.

However, even those not physically located in a disaster area may be impacted by that disaster. For example:

• Individuals who live outside the affected area, but own a business located in the area
• Individuals whose tax preparers live in an affected area, making the preparers unable to file
• Individuals who have vital tax documents otherwise located in an affected area.

If any of the above situations applies to you, you can still qualify for disaster relief. However, you won’t be automatically identified by the IRS. Instead, you’ll have to call the IRS disaster hotline to request the tax relief. The number for the hotline is 866-562-5227.

If you’ve been impacted by a federally declared natural disaster in some way, and you’re not sure how to proceed with your tax filing or tax payments, contact our Provo tax professionals for assistance. Will help you to determine if you qualify for relief, what types of relief are being offered, and how to request the relief you need. And, we’ll help you get documents in order, claim any casualty losses on your next return, and file your return as soon as you are able. Give us a call to schedule an appointment today.