NEW YORK (AP) – If your life is extended by wildfires, hurricanes, floods, tornados, or another disaster of the past year, the IRS recognizes that you may need more time to file taxes and provide you with automatic extensions beyond the normal file deadline, which is Tuesday.
You are also allowed to write off certain losses caused by disasters, thus reducing the tax burden. This could be a damage to property, loss of income or loss of small businesses.
“After you have lost your home or vehicle, (loss write-off) to solve the project, which can feel very difficult and overwhelming. It can take time and a lot of effort,” said Alison Flores, H&R Block tax department manager. “We see people hesitating to solve this problem, so they leave losses on the table.”
People are also more susceptible to scams after disasters, so you should be alert when preparing for taxes even for the extra time the IRS is extended.
“Scammers often become representatives of the IRS or FEMA,” said Misty Erickson, tax content planning manager for the National Association of Tax Professionals. “Common scams include false promises of taxes, fake charities recruiting donations, and phishing attempts to ask for personal or financial information.”
Here's what you should know:
First, determine if your area is a federally declared disaster site
The IRS retains an online list of official lists of all disaster sites that are eligible for submission expansions.
Individuals and businesses affected by Hurricanes Helene and Milton have been eligible for tax breaks, as well as disaster victims in parts of Alabama, Florida, Georgia, North Carolina, South Carolina, New Mexico, Tennessee, Virginia, Virginia, West Virginia and parts of Alaska.
Taxpayers in these areas must submit returns and pay by May 1 and receive an additional two-week grace period without any additional paperwork. The applicant may also choose to claim additional extensions on October 15, but if no money due on May 1 is paid, the interest will be incurred.
Southern California individuals and businesses are also eligible for automatic expansion due to disasters due to wildfires and straight lines. Taxpayers in relevant counties must submit returns and pay by October 15.
During the extended period of the disaster, no interest or expenses that usually incur a delay in payment will be incurred. Most direct disaster relief is not considered income, so it is not taxed.
Remember that simple steps you can make a difference by following directly
While nothing easy in the first few days and weeks after the disaster, some options can help when seeking insurance reimbursement and tax payments.
“We recommend saving media coverage,” Flores said. “If your neighbor shows disaster in the news, write down what date or record that copy. Any conditions that confirm your losses and the conditions of your property will be helpful.”
According to the IRS, other steps include:
– Take photos of damaged property or property to record and calculate the amount of loss.
– Keep receipts for related expenses, including contractual work on property that causes disaster damage.
– Keep a record of original value of any property, including home, car, jewelry or large credit card purchases.
It is also important to file an insurance claim as soon as possible, as you deduct any insurance reimbursement from the disaster losses claimed in the tax return.
Next, determine if you are eligible for tax deductions
“When we look at the loss, it's often going to damage your home, your furniture, your vehicles, etc.” “Most of the time, people will have home insurance and auto insurance and file a claim. This is the first step. The tax break is because your insurance is not paying or paying back the loss.”
The IRS calls this kind of disaster relief a “casualty loss.” Claiming casualty losses will not result in dollar reimbursement, but it does reduce your tax burden, which may mean more cash to help recover.
Form 4684, which is included when you submit a declaration form, will take you through relevant steps to calculate the casualty record.
The victim of a disaster can deduct losses in the year of the loss or in the year of the previous year – in this case, by filing an amended return.
Beware of scams
It is normal to feel vulnerable and listen to sounds that are expected to be relieved after a disaster. However, for this reason, scammers often target disaster victims.
“Taxpayers should be cautious about phone calls, emails or text messages that claim to be from the IRS or relief agency,” Erikson said. “The IRS will never initiate a contact via email, text, or social media to request sensitive information. If in doubt, taxpayers should call the official number directly to verify the letter.”
According to the IRS, you should be wary of:
– Big Salary: The promise of money is more reasonable than you think. Bad consultants may make weird statements about available credit.
– Threats and demands: “Now otherwise” any pressure to pay tax help, mention arrest or deportation, or refuse to let you question or file the tax they say you owe.
– Not a suspicious or misspelled website link for irs.gov.
The scammers may say they want to “help” you file a claim for casualties or get a massive refund. Always rely on the official IRS government website and beware of high labels or sensational commitments that are helpful.
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The Associated Press received an educational and interpretive report from the Charles Schwab Foundation to improve financial literacy. The Independent Foundation is separated from Charles Schwab and Co.'s company. The Associated Press is responsible for its journalism.
