Last month the great city of Houston, along with our state neighbors, Corpus Christi, Rockport, Galveston and other surrounding areas, was hit with the worst storm in U.S. history – Hurricane Harvey. Many community members lost everything they own including great damage to their home. Some even lost their homes altogether having to find another place to live.For those who suffered property damage due to Hurricane Harvey there is tax relief available with two types of losses individuals and businesses can take advantage of in these circumstances, and extended tax filing deadlines.
Casualty & Theft Losses1. Casualty results in a deductible loss only if property is physically destroyed or damaged from an event that is sudden, unexpected or unusual such as a fire, storm, earthquake, hurricane, auto accidents.2. The cost of cleanup or removal of debris and cost to recover lost property is deductible as part of casualty loss.3. Certain expenses incurred with casualty losses that are not deductible include, monetary judgements or settlements, temp living arrangements, casualty insurance premiums, cost of appraisals.4. Casualty loss in generally sustained in the year the casualty occurred.
1. Disaster Loss is the loss of property that results from the occurrence of a disaster area designated by the President of the United States and qualifies for special tax treatment.2. Taxpayer may elect to deduct disaster losses in the tax year in which the disaster occurs or in the tax year immediately preceding the tax year in which the disaster occurs. The election is made on a return, an amended return or a refund claim.3. Loss on personal property qualifies for deduction as a disaster loss only if it also qualifies as a casualty loss.4. Loss of Property used in a trade or business qualifies as a disaster loss even though the loss is not deductible as a casualty loss.Residences located in a disaster area that are rendered unsafe by the disaster and are ordered to be demolished or relocated may qualify as disaster area casualty losses.
The IRS announced that affected taxpayers in Texas will receive tax relief with extended upcoming filing deadlines for extended tax returns and estimated tax payments, and penalties associated with payroll deposits.Certain deadlines falling on or after Aug. 23, 2017 and before Jan. 31, 2018, are granted additional time to file through Jan. 31, 2018. This includes taxpayers who had a valid extension to file their 2016 return that was due to run out on Oct. 16, 2017. It also includes the quarterly estimated income tax payments originally due on Sept. 15, 2017 and Jan.16, 2018, and the quarterly payroll and excise tax returns normally due on Oct. 31, 2017.In addition, penalties on payroll and excise tax deposits due on or after Aug. 23, 2017, and before Sept. 7, 2017, will be abated as long as the deposits were made by Sept. 7, 2017.