disaster – Boost My Dream: Entrepreneurship | Self Improvement | Money | Tax Tips and more https://boostmydream.com Change to the New You! Wed, 21 Oct 2020 17:42:16 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.4 What happens After a Disaster affects a Taxpayer https://boostmydream.com/what-happens-after-a-disaster-affects-a-taxpayer/ Wed, 21 Oct 2020 17:42:11 +0000 https://boostmydream.com/?p=420 No matter how devastating a disaster is, before the IRS can authorize any tax relief, FEMA must issue a major disaster declaration and identify areas qualifying for their Individual Assistance program. During the pandemic, the CARES Act had some similar provisions. Also, we witnessed similar mechanisms when President Trump issued an executive order to repurpose FEMA funds toward Lost Wage Assistance program (LWA) after the $300/weekly unemployment boost expired at the end of July 2020.

Here’s a list of tax-related things that usually takes place following a major disaster:

The IRS gives taxpayers more time to file and pay.

Taxpayers whose address of record is located in an area identified by FEMA for their Individual Assistance program will automatically receive extra time from the IRS to file returns and pay taxes. The IRS’s disaster website page provides new info and links to resources. Information is usually available on the IRS Twitter account as well. Taxpayers can also call the agency’s disaster line at 866-532-5227 with questions.

Taxpayers can qualify for a casualty loss tax deduction.

People whose propeties have been lost or damaged due to a federally declared disaster may qualify to claim a casualty loss deduction. They can claim this on their current or prior-year tax return. This may result in a larger refund.

People can apply for a disaster loan or grant.

The Small Business Administration offers financial help to business owners, homeowners and renters. This help is for those in a federally declared disaster area. To qualify, a taxpayer must have filed all required tax returns. the EIDL grant and loan as well as the Paycheck Protection Program (the PPP) were some ways that the US Congress helped the American people.

Taxpayers might need a tax return transcript.

People requiring a tax transcript to support their disaster claims can obtain free transcripts by using Get Transcript to access their transcripts immediately online or to request mail delivery. They can also call 800-908-9946 to request mail delivery or submit Form 4506-T, Request for Transcript of Tax Return.

People who need a copy of their tax return, should file Form 4506, Request for Copy of Tax Return. The IRS waives the usual fees and expedites requests for copies of tax returns for people who need them to apply for disaster-related benefits or to file amended returns claiming disaster-related losses. If filing Forms 4506-T or 4506, the taxpayer should state on the form the request is disaster related and list the state and type of event. This helps speed up the process.

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