Image: National Hurricane Center

Do You Qualify For Disaster Tax Relief?

At Tax Help Advisors, LLC, our hearts go out to those affected by Hurricane Florence across our State of North Carolina as well as South Carolina and other areas.

In response to the state of emergency, the IRS has extended upcoming deadlines for Hurricane Florence victims in parts of North Carolina and other areas affected by the storm. Certain individuals and businesses have until January 31, 2019, to file tax returns and make tax payments.

Note: To qualify for this relief, you and/or your business must be in an area designated by the Federal Emergency Management Agency (FEMA) as qualifying for assistance.

Currently, this only includes parts of North Carolina, but taxpayers in localities added later to the disaster area, including those in other states, will automatically receive the same filing and payment relief.

The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Sept. 7, 2018, in North Carolina. As a result, affected individuals and businesses will have until Jan. 31, 2019, to file returns and pay any taxes that were originally due during this period.

This includes quarterly estimated income tax payments due on Sept. 17, 2018, and the quarterly payroll and excise tax returns normally due on Sept. 30, 2018. Businesses with extensions also have the additional time including, among others, calendar-year partnerships whose 2017 extensions run out on Sept. 17, 2018. Taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15, 2018, will also have more time to file.

In addition, penalties on payroll and excise tax deposits due on or after Sept. 7, 2018, and before Sept. 24, 2018, will be abated as long as the deposits are made by Sept. 24, 2018.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. You do not need to contact the IRS to get this relief. However, if you are an affected taxpayer and you receive 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, you should call the number on the notice or a tax professional to have the penalty abated.

In addition, the IRS will work with you if you live outside the disaster area but the records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227 or their tax professional to obtain this relief. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Assistance for Uninsured or Unreimbursed Victims

If you and/or your business is located in a federally declared disaster area and suffered uninsured or unreimbursed disaster-related losses, you can choose to claim them on either the return for the year the loss occurred (in this instance, the 2018 return normally filed next year), or the return for the prior year (2017).

The tax relief is part of a coordinated federal response to the damage caused by severe storms and flooding and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Protect Yourself and Your Business Against Future Disasters

As indicated on the map above, Florence may be moving out but Joyce lurks in the Atlantic. It is too early to predict whether Joyce will unleash her fury on the East Coast or turn and head back out to sea. However, it is not too early to make preparations.

Planning what to do in case of a disaster is an important part of being prepared. Tax Help Advisors, LLC, as well as the IRS, encourage you to safeguard your records. Some simple steps can help you and/or your business protect financial and tax records in case of disasters:

  • Take advantage of paperless recordkeeping for financial and tax records.

You may receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns, and other paper documents can be scanned onto an electronic format.

Be sure you back up your electronic files and store them in a safe place. Making duplicates and keeping them in a separate location is a good business practice. Other options include copying files onto a CD or DVD. Also, many retail stores sell computer software packages you can use for recordkeeping.

When choosing a place to keep your important records, convenience to your home should not be your primary concern. Remember, a disaster that strikes your home is also likely to affect other facilities nearby, making quick retrieval of your records difficult and maybe even impossible.

  • Document Valuables and Business Equipment

An easy option is to photograph or videotape the contents of your home and/or business, especially items of greater value. You should store the photos with a friend or family member who lives away from the geographic area at risk. Also, taking advantage of Cloud storage makes your information accessible from any location on any device.

The IRS has disaster loss workbooks for individuals and businesses that can help you compile a room-by-room list of your belongings or business equipment.

This will help you recall and prove the market value of items for insurance and casualty loss claims.

  • Check on Fiduciary Bonds

If you are an employer who uses a payroll service provider, ask the provider if they have a fiduciary bond in place. The bond could protect you in the event of default by the payroll service provider.

  • Continuity of Operations Planning for Businesses

How quickly your company can get back to business after a disaster often depends on emergency planning done today. Start planning now to improve the likelihood that your company will survive and recover. Review your emergency plans annually. Just as your business changes over time, so do your preparedness needs. When you hire new employees or when there are changes in how your company functions, you should update your plans and inform your people.

10 Steps To Take To Plan For Disasters

There are real benefits to being prepared for disasters. The following preparedness strategies are common to all disasters. Plan once, and you are able to apply your plan to all types of hazards:

  1. Get informed about hazards and emergencies and learn what to do for specific hazards.
  2. Develop an emergency plan.
  3. Learn where to seek shelter from all types of hazards.
  4. Back up your computer data systems regularly.
  5. Decide how you will communicate with employees, customers, and others.
  6. Use cell phones, walkie-talkies, or other devices that do not rely on electricity as a backup to your telecommunications system.
  7. Collect and assemble a disaster supplies kit. Include a portable generator.
  8. Identify the community warning systems and evacuation routes.
  9. Include required information from community and school plans.
  10. Practice and maintain your plan.

While this list is not all-inclusive, it provides some basics for protecting you, your family, and your business in the event of a natural disaster.

This has been a long but necessary post. Print it and keep it with your emergency plan. Also, save a copy to your Cloud file.

As always, the tax professionals at Tax Help Advisors, LLC are here to help you with your tax needs related to disasters whether it’s helping you make sure your files are in order and stored properly or whether you need help with tax relief guidelines following a disaster.

When you need tax help, contact Tax Help Advisors, LLC at 704-912-4002.