If you have recently been affected by a natural disaster in your area, and need tax relief as a result of that disaster, there are a number of items you need to consider when applying to the IRS for tax relief.
Qualifications
To qualify for tax relief after a natural disaster, you do not need to be located in a federally declared disaster area. Taxpayers who have been affected are defined as individuals, businesses, sole proprietors, as well as S Corporation shareholders, whose records for tax payment purposes are located in a disaster area during the filing or payment date. Thus, their ability to meet the deadline is postponed.
Application Process
Taxpayers affected by natural disasters must fill out and submit an amended return along with any losses they experience. The IRS extends filing deadlines up to one year for any person who has been affected, and provides other provisions in tax relief. However, taxpayers must file the amended return to avoid penalties.
To claim a loss, a taxpayer needs to file the loss as an itemized deduction on Form 1040, Schedule A, or file it under Schedule A in Form 1040NR. He or she must also subtract $100 from each casualty and theft after her or she subtracts any value remaining in his or her property along with the insurance reimbursement. Once this is done, the taxpayer can submit the amended return to the IRS.
A natural disaster provides more than enough stress during tax season. Luckily the IRS can provide you with relief.
Image credit: NASA Goddard Space Flight Center