As individuals in the Southeast take steps to recover from the damages of Hurricane Hermine in August and Hurricane Matthew in October, certain residents may qualify for an extension in meeting their tax filing obligations.
When the president of the United States declares a federal disaster area, the IRS is permitted to postpone tax deadlines automatically for residents and businesses located or working in the affected state, county or region. More specifically, affected taxpayers include:
individuals whose principal residence, and any business entity whose principal place of business, is located in the counties designated as disaster areas;
individuals whose principal residence, and any business entity whose principal place of business, is not located in a covered disaster area, but whose records necessary to meet a filing or payment deadline are maintained in a covered disaster area;
any estate or trust whose tax records required to meet a filing or payment deadline are located in a covered disaster area;
spouses of affected taxpayers who file joint tax returns; and
individual relief workers assisting in a covered disaster area, regardless of whether he is affiliated with recognized government or philanthropic organizations
Victims of Hurricane Hermine
Victims of Hurricane Hermine who live or operate businesses in Citrus, Dixie, Hillsborough, Leon, Levy Pasco and Pinellas counties along Florida’s Gulf automatically received an extension of those tax filing obligations that have a deadline of August 31 or later. As a result, the existing filing deadlines for individuals making quarterly estimated tax payments (September 15) and those individuals on an extension to file their personal tax returns on October 17, have been postponed until January 17, 2017. The January 17 deadline also applies to businesses filing payroll and excise tax returns as a well as those entities that had existing extensions to file corporation and partnerships tax returns by September 15. In addition, the IRS has waived the failure-to-deposit penalties for employment and excise tax deposits due on or after August 31st, as long as the deposits were made by September 15, 2016.
Victims of Hurricane Matthew
The IRS has postponed the tax filing and payment obligations occurring on or after October 4, 2016, to March 15, 2017, for taxpayers affected by Hurricane Matthew who live in the following regions:
Florida: Brevard, Duval, Flagler, Indian River, Nassau, St. Johns, St. Lucie and Volusia counties.
Georgia: Bryan, Camden, Chatham, Glynn, Liberty and McIntosh counties.
North Carolina: Beaufort, Bertie, Bladen, Brunswick, Camden, Carteret, Chowan, Columbus, Craven, Cumberland, Currituck, Dare, Duplin, Edgecombe, Gates, Greene, Harnett, Hoke, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Pitt, Robeson, Sampson, Tyrrell, Washington, Wayne and Wilson counties.
South Carolina: Beaufort, Berkeley, Charleston, Colleton, Darlington, Dillon, Dorchester, Florence, Georgetown, Horry, Jasper, Marion, Orangeburg and Williamsburg counties.
With this extension, affected individuals who already received a tax-filing extension will have more time to file their 2015 individual income tax returns and make their quarterly estimated tax payment for the fourth quarter of 2016. For businesses, the extension to March 15, 2017, will apply to the Oct. 31 and Jan. 31 deadlines for quarterly payroll and excise tax returns and employee benefit plan. It will not apply to the filing of information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027 nor employment and excise tax deposits.
As the Federal Emergency Management Agency (FEMA) continues to assess the damages of Hurricane Matthew, the IRS is prepared to extend tax relief to residents and businesses located in additional counties and states. The IRS advises that taxpayers who are affected by the storm but not located in an already declared federal disaster area may qualify for relief from penalties for failing to meet the October 17 deadline for filing 2015 tax returns. Should these affected taxpayer receive a penalty notice, they may request from the IRS an abatement of the penalties. However, it is recommended that tax payers outside declared disaster areas make their best efforts to meet existing filing deadlines.
Taxpayers who suffer disaster-related losses should reach out to their accountants to understand their tax filing rights and responsibilities, to quantify damages to property and interruption of business operations losses and to identify opportunities to qualify for a casualty loss deduction.
About the Author: Angie Adames, CPA, is an associate director in the Tax Services practice of Berkowitz Pollack Brant, where she provides tax and consulting services to real estate companies, manufacturers and closely held business. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.
The post IRS Offers Tax Relief to Victims of Hurricane Hermine, Hurricane Matthew by Angie Adames, CPA appeared first on Berkowitz Pollack Brant Advisors and Accountants.