Victims of Hurricane Ida will get more time to file various individual and business tax returns and make federal tax payments, according to the IRS. This tax relief is available to people in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance, which currently includes the entire state of Louisiana. However, people impacted by the hurricane who are in impacted areas designated by FEMA in neighboring states will automatically qualify for the tax filing and payment extensions, too.
The IRS will also work with anyone who lives outside the affected area, but whose tax records are in the Hurricane Ida disaster area. Call the IRS at 866-562-5227 if this applies to you. This also includes workers assisting the disaster relief activities who are affiliated with a recognized government or philanthropic organization.
Which Deadlines Are Extended?
Various tax filing and payment deadlines from August 26, 2021, to January 2, 2022, are extended until January 3, 2022. This includes the October 15, 2021, due date for filing a 2020 income tax return that was extended (the original due date was May 17, 2021). Note, however, that tax payments related to 2020 returns were due on May 17, 2021, so those payments aren’t extended.
Hurricane Ida victims will also get more time to make the quarterly estimated tax payments that are due on September 15, 2021.
The due date for quarterly payroll and excise tax returns normally due on November 1, 2021, are extended for Hurricane Ida victims, too. Penalties on payroll and excise tax deposits due from August 26 to September 9 will also be waived as long as the deposits were made by September 10, 2021.
Taxpayers don’t need to contact the IRS to get this relief. However, if an affected person receives a late filing or late payment penalty notice from the IRS, he or she should call the number on the notice to have the penalty abated.
Deduction for Damaged or Lost Property
Hurricane Ida victims may be able to claim a tax deduction for unreimbursed damaged or lost property. To do so, they typically must itemize and file Schedule A with their tax return. However, victims who claim the standard deduction may still be able to deduct their losses if they can claim them as business losses on Schedule C.
The deduction can be claimed on either a 2020 tax year return or a 2021 return (which is due next year). In either case, you must write the FEMA declaration number on the return claiming the deduction. For Hurricane Ida in Louisiana, the number is FEMA 4611-DR. We also recommend writing “Hurricane Ida” in bold letters at the top of the form if you’re claiming a disaster loss on your 2020 return. See IRS Publication 547 for details.
If you decide to claim a deduction for 2020 and you have already filed your 2020 return, you can amend your 2020 return by filing Form 1040X. For this purpose, you must file your amended prior-year return no later than six months after the due date for filing your current-year return (without extensions) for the year in which the loss took place. So, for Hurricane Ida losses in 2021, you would need to file an amended 2020 return by October 17, 2022.
Source: kiplinger.com