Washington, DC, (January 28, 2016) – When it comes to tax relief for one of the hardest states to spell, two easy acronyms play a big role: FEMA and IRS. After the Federal Emergency Management Agency’s (FEMA) disaster declaration for individual assistance for Mississippi counties devastated by tornadoes and storms in December , the Internal Revenue Service (IRS) stepped up and offered special tax relief not just for the victims of the storm, but for the aid workers assisting them. Both of these groups will have until May 16, 2016 to file their returns and pay any taxes due.
If you live in an area that is hit by disaster, keep in mind that there are special tax provisions designed to help in recovery. The National Association of Enrolled Agents (NAEA) has tax advice that will help if you have to deal with disaster loss:
- Try to be as paperless as possible by scanning your tax documents and saving them to the cloud or onto a CD or DVD. If you choose the disc option, keeping it somewhere other than your home or business is a good idea – if the buildings are damaged in the disaster, you’ll be glad you kept them off premises.
- Catalogue your valuables and business equipment so you can prove the market value of items for insurance and casualty loss claims if they are damaged in a disaster. If you don’t have time to list your valuables, take pictures or videos and do a complete inventory of damage before the mess gets cleaned up. After the cleanup process has begun, people often don’t remember what they threw away. Be sure to photograph the inside and outside of the house or business and as much personal property damage as possible.
- IRS Publication 584, “Casualty and Disaster Loss Workbook,” will help you conduct a room-by-room inventory of damage. The workbook may be obtained by visiting www.irs.gov.
- Tax deductions for buildings with structural damage require a qualified appraisal and records of the repairs to restore the building to its previous condition. Keep in mind that all claims for damage must first be submitted to the property owner’s insurance carrier, even if the property is not covered, in order to take a casualty loss deduction.
To make sure you take advantage of every tax provision to help you through a disaster, it would be wise to consult a licensed tax professional. Enrolled agents (EAs) are licensed by the U.S. Department of Treasury and overseen by the IRS. EAs provide tax preparation, tax advice, and tax planning services in addition to helping taxpayers resolve problems with the IRS. To find an enrolled agent in your area, go to www.eatax.org.
National Association of Enrolled Agents
(NAEA) The National Association of Enrolled Agents (NAEA) is a professional society that supports its members with resources, education and networking and by representing their interests to government, business and the general public. Members are dedicated to honest, intelligent and ethical representation of taxpayers before the IRS. NAEA powers America’s Tax Experts.