The Internal Revenue Service (IRS) announced significant tax relief this week for victims of Hurricane Harvey. Those in Texas impacted by the storm now have until January 31, 2018 to file certain individual and business tax returns and make certain tax payments. This includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, and businesses with extensions that run out on Sept. 15.
Details of the Tax Relief
The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 23. Affected individuals and businesses have until Jan. 31 to file returns and pay any taxes that were originally due during this period.
This includes the Sept. 15 and Jan. 16 deadlines for making quarterly estimated tax payments. This also includes returns on extension. Remember, however, that the extensions were an extension of the time to file, not the time to pay, so payments for 2016 tax returns are still keyed to the April 18, 2017, due date.
Various business tax deadlines are also affected, including the Oct. 31 deadline for quarterly payroll and excise tax returns. In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after Aug. 23 and before Sept. 7, if the deposits are made by Sept. 7, 2017.
This relief also includes the filing of Form 5500 series returns applicable to business’ employee benefit plan reporting and compliance that were required to be filed on or after Aug. 23, 2017, and before Jan. 31, 2018.
Further details on available relief can be found on the disaster relief page on IRS.gov.
Covered Disaster Area
The expanded relief is offered to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. Currently, 18 Texas counties are eligible for relief: Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton.
Locations in other states are expected to be added in the coming days based on damage assessments by FEMA; those disaster areas will automatically receive the same filing and payment relief.
Affected Tax Payers
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area.
Claiming Casualty Losses
Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year), or the return for the prior year (2016).
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