Update Tax Relief for Hurricane Isaac

On August 28, 2012, Hurricane Isaac made landfall in Louisiana and caused severe damage to the area. The storm was the most damaging hurricane to hit Louisiana since Hurricane Katrina in 2005, and it caused widespread flooding and property damage. The government responded with a series of tax relief measures to help those affected by the storm, and these measures have been updated over the years to provide additional relief to residents. In this article, we will discuss the tax relief measures available for those affected by Hurricane Isaac and how these measures have evolved over time.

Individual Assistance

Individuals who are affected by Hurricane Isaac may be eligible for tax relief through the Federal Emergency Management Agency (FEMA)’s Individual Assistance program. This program provides financial assistance to individuals who have suffered losses due to a major disaster. This assistance can include grants for temporary housing and home repairs, as well as low-interest loans to help cover the cost of replacing damaged or destroyed personal property.

Tax Relief Measures for Hurricane Isaac

In addition to the assistance provided by the Individual Assistance program, the Internal Revenue Service (IRS) has also implemented tax relief measures for those affected by Hurricane Isaac. The IRS has provided the following relief measures:

Postponed Deadlines

For those who live in the areas affected by Hurricane Isaac, the IRS has extended deadlines for filing tax returns, making tax payments, and meeting other tax obligations. This extension applies to taxpayers living or conducting business in the following parishes:

– Ascension
– Jefferson
– Lafourche
– Livingston
– Orleans
– Plaquemines
– St. Bernard
– St. Charles
– St. Helena
– St. James
– St. John the Baptist
– St. Mary
– St. Tammany
– Tangipahoa
– Terrebonne
– Washington

The deadline for filing returns, making payments, and taking any other actions that are due between August 26, 2012, and January 11, 2013, has been postponed to January 11, 2013.

Casualty Losses

Individuals who have suffered property damage or loss due to Hurricane Isaac may also be eligible for a deduction for casualty losses. Casualty losses are defined as losses that are sudden, unexpected, or unusual events that result in damage to property. Taxpayers may be able to deduct these losses on their tax returns, which can help offset the cost of repairing or replacing damaged or destroyed property.

The IRS also increased the amount of the casualty loss deduction for those affected by Hurricane Isaac. The casualty loss deduction was increased from 10% of adjusted gross income to 20% of adjusted gross income for those affected by the hurricane.

Exemption from Penalty

Those who were affected by Hurricane Isaac and were unable to meet their tax obligations due to the storm may also be eligible for an exemption from certain penalties. The IRS may waive the penalty for failure to pay estimated taxes, failure to deposit certain taxes, and failure to file certain tax returns. This penalty exemption applies to taxpayers living or conducting business in the areas affected by the hurricane.

Tax Relief for Business Owners

Business owners who were affected by Hurricane Isaac may also be eligible for tax relief measures. These measures include:

Extended Deadlines

Business owners in the areas affected by Hurricane Isaac are eligible for the same deadline extensions as individuals. Deadlines for filing returns, making payments, and meeting other tax obligations that fall between August 26, 2012, and January 11, 2013, are extended to January 11, 2013.

Related: How to Get More Relief if Your Business is Affected by Hurricane

Expensing of Repairs

Business owners may also be able to write off the cost of repairs and improvements made to property damaged by Hurricane Isaac. Under the tax code section 179, business owners can write off the full cost of certain improvements made to property in the year they were made. These improvements include repairs made to property damaged by a natural disaster.

The IRS also increased the amount that business owners can write off for repairs made to property damaged by Hurricane Isaac. Business owners are now able to write off up to $500,000 in expenses related to repairs made to property damaged by the hurricane.

Casualty Losses

Business owners who suffer property damage or loss due to Hurricane Isaac may also be eligible for a casualty loss deduction. The deduction for casualty losses allows business owners to deduct a portion of the cost of losses related to damaged or destroyed property from their taxable income.

Conclusion

Hurricane Isaac was a severe disaster that affected the lives of many people in Louisiana. The government responded with a range of tax relief measures to help those affected by the storm. These measures included deadline extensions, exemptions from certain penalties, and increased deductions for casualty losses and repairs. Over the years, these measures have been updated to provide additional relief to affected residents and business owners. These tax relief measures are an important way to help those affected by Hurricane Isaac get back on their feet and rebuild their lives.

The Internal Revenue Service has announced tax relief for victims of Hurricane Isaac on September 5, 2012, and the IRS has updated the areas for tax relief on September 17, 2012.  More areas may obtain tax relief in the coming days as well.

President Obama has declared the following parishes a federal disaster area: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Mary, St Tammany, Tangipahoa, Terrebonne, Washington, and West Feliciana.

Those with a residence or a business residence in any of the parishes listed can qualify for tax relief.

The IRS has postponed deadlines “on or after August 26, and on or before January 11, 2013” to January 11, 2013.  The deadlines include the quarterly estimated tax payments due on September 17, 2012.

The IRS is also waiving any failure-to-deposit penalties involving employment and excise tax deposits between August 26, 2012 and September 10, 2012.

According to the IRS, an affected taxpayer should call the telephone number listed on the notice if they receive a penalty notice.  The penalties and/or interests can only be abated “for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.”

Affected taxpayers can register for postponement even if they fall outside of the federal disaster area.  This includes homeowners and business owners.  Call the IRS disaster hotline at 866-562-5227 in order to request tax relief.

Taxpayers can claim casualty losses on the federal income tax return for this year or last year.  If you claim the loss for last year, you’ll receive a refund sooner.  If you wait to claim the loss on this year’s return, you may be able to save more on your taxes.

Source: Internal Revenue Service