When natural disasters strike, it causes immense damage and loss on several of your properties. In 2016, Hurricane Harvey affected 13 million people and damaged or destroyed nearly 135,000 homes. At the end of August this year, Hurricane Florence hit the Carolinas and incurred damage amounting to almost $28.5 billion so far.
These devastating disasters leave some, if not all, families in a tight financial position that would take them years to recover from. Fortunately, the Internal Revenue Service (IRS) provides tax relief programs for taxpayers affected by natural disasters.
Do You Qualify?
To make use of IRS’ tax relief program for natural disasters, you must be a resident of a disaster area. If you are a taxpayer whose tax records are located in a federally designated disaster area, you may be eligible for special benefits. This tax relief is available for both individuals and business entities alike.
Available Tax Reliefs
When you live in an area that’s been declared by the President as eligible for federal assistance, you may take advantage of the following federal provisions:
1. Access to Retirement Plans
Affected taxpayers may borrow up to $100,000 worth of qualified employment retirement plan like a 410(k). These retirement accounts may help devastated you pay property damages and recover from the disaster.
2. Tax Return Deadline Relief
If you’re a taxpayer living in a disaster area, the IRS grants an extended deadline for tax filing. For example, the IRS extended individual and business tax returns filing until January 31, 2019, from the previous September 7, 2018 deadline for Hurricane Florence victims.
3. Casualty Deductions
If your home suffered damage from a natural disaster, you could take tax deductions for the year the damage occurred. If you live in a federally declared disaster area, you may also amend your previous tax return and take it for this year, according to the IRS.
When disasters strike, it’s beneficial to make use of the government’s tax relief. With so many burdens to think about, the last thing you need is stress about filing your taxes.