4 tips for dealing with your taxes after Harvey

Taxes may not be top of mind after disaster strikes, but proper action now can mean avoiding potential problems later. The Internal Revenue Service has assembled tips for those affected by Harvey, several of which are highlighted here. Remember to contact a tax professional for guidance on your specific situation.

Get past tax returns.
Personal records are immediately accessible for free at irs.gov.

See if you qualify for extended deadlines.
The IRS is giving Harvey victims in 18 Texas counties until January 31, 2018, to file certain individual and business tax returns and make certain tax payments. This includes a filing extension for taxpayers with valid extensions that run out on October 16, and businesses with extensions that ran out on September 15.

You don’t need to contact the IRS to activate these extensions since it automatically provides relief to taxpayers with an address located in the disaster area. Get more details on who qualifies for extensions.

Track losses for deductions.
If there is damage to personal, income‐producing, or business property, you may be able to claim a casualty loss deduction on your tax return. A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.

Individuals and businesses with uninsured or unreimbursed disaster-related losses can claim on either the return for the year the loss occurred (in the case of Harvey, the 2017 return filed next year), or the return for 2016.

Prepare to prove a loss and its costs.
The IRS says to compute loss, determine:

  • The decrease in fair market value of the property that resulted from the casualty or disaster.
  • The adjusted basis of the property, which is generally what was paid for the property, increased or decreased, because of certain events.

You can deduct the smaller of these two amounts, minus insurance or other reimbursement. Certain deduction limits apply.

About Texas Association of REALTORS®

The voice for Texas real estate
This entry was posted in Business tips and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s