Posted by Fletcher Accounting and Tax Service Inc.

Hurricane Florence Victims Get a Break on Taxes

Hurricane Florence Victims Get a Break on Taxes

IRS would grant tax relief for the households who are actually reeling from the Hurricane Florence. This storm has weakened to the tropical depression previous Sunday. It has poured almost 40-inch rain on the North Carolina. U.S. President Trump has declared South Carolina as well as North Carolina the federal disaster area because of this hurricane. The Hurricane Florence victims get a break on taxes.

The taxpayers who are affected by this storm would have some more time in order to file the quarterly income taxes that will be due on September 17. Also, they would have now until January 31, 2019, for filing and paying applicable levies.

"In case this was a hurricane in a home in New Jersey then you do not have this kind of provision; where people who are affected by the Florence Hurricane in North Carolina will." Furthermore, in case you’d some valid extension in order to file the taxes of 2017 by October 15 then the IRS would surely grant you some more time for filing.

Now postponement is also available to the residents in those areas which are actually designated by Emergency Management Agency as the qualifying for separate help. Following are some implications of tax-planning that are for the households affected.

The Casualty Loss Deductions

You need to be aware regarding Tax Cuts & Jobs Act. It has altered the way that you could claim your personal theft and casualty losses. Before this change, you’re actually able to just claim the itemized deduction to the property losses which are not reimbursed by the insurance and which stem from the fires, natural disasters, and some other events. 

Also, the total of such losses requires crossing ten percent of the gross income that is adjusted. According to the data from IRS, in the year 2016 that is the most current year available, tax returns of about 154,274 claimed the theft or casualty loss deductions.

The tax preparers say that you might claim the casualty loss on the taxes just in an event of the federally declared disasters. You could claim these during the year when they happened — 2018 — and in the amended returns for a previous year. Plus, your loss deductions are also subject to ten percent of a threshold of AGI. Such alteration is actually in force from the year 2018 to the year 2025.

In case this was a hurricane over your home in some other then you do not have such kind of provision. This provision is for only those people who are affected by the Florence in the North Carolina. This statement was given by Craig Richards. He is a CPA as well as director of the tax services of Fiduciary Company International.

Limitations on Losses

Under the most situations, to claim theft as well as casualty losses, you should be claiming the itemized deductions. This recent tax law has doubled standard deductions to twelve-thousand dollars for the individuals. And, the new tax has increased standard deductions to 24,000 dollars for the couples who are married filing collectively hence few people are actually expected to just itemize in the year 2018.

While you are deducting your losses that are related to the federally declared disaster areas then its rules are a bit different. As, in that situation, the ten percent of the AGI limit does not apply. The filers that are affected by the federally declared disaster areas could take the losses without even having to itemize.

You must be well aware of how much one could claim as the loss would be actually decreased depending on the insurance payout that one gets for the damages. In case your damages are big enough that the deductions for that year cross your income then you might have some NOL that is net operating losses. The individuals and not just the businesses might also have the net operating loss from the casualty as well as thefts.

Richards of the Fiduciary Trust Company International has said that you could also use the net operating losses in order to decrease the tax in the prior year that might result in the refund. So, alternatively, it is quite possible that you might use your loss in order to decrease the taxes in the near future.

Fletcher Accounting and Tax Service Inc.
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