Don't Mess With Taxes

June 15 — yep, this coming Tuesday — is Tax Day for all Louisianans (and Texans and Oklahomans) who endured mid-February's historic freeze.

But some Pelican State taxpayers now get even longer to finish up their 2020 tax year returns.

The Internal Revenue Service says victims of severe storms and flooding in parts of Louisiana that began May 17 now have until Aug. 16 to file various individual and business tax returns and make tax payments.

The affected filers live in or have businesses in Ascension, Calcasieu, East Baton Rouge, Iberville, and Lafayette Parishes.

These parishes were designated as disaster areas on June 2 by the Federal Emergency Management Agency (FEMA). The IRS subsequently determined that residents and business owners in the parishes should get additional tax-related relief.

Here's a quick look at that relief.

Returns, payments and estimated taxes: The new Aug. 16 due date for Louisianans in the five FEMA designated counties is for, as noted 2020 tax returns. That include filing and paying by the new August deadlines.

But it's also now the due date to make:

• the second quarter estimated tax payment normally due on June 15, and
• IRA contributions for the 2020 tax year.

If an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty.

IRS automatically applies new deadline: If you live or have a business in the affected parishes, you don't need to do anything to get the August deadline. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief.

However, if you reside or have a business outside the covered disaster area and believe you, too, should get more tax time, call the IRS' toll-free disaster hotline at (866) 562-5227 to discuss your circumstances and request the same relief.

Sometimes, the penalty accommodations confuse even the IRS. So if you're a Louisianan who lives in the new Aug. 16 disaster areas but you get a late filing or late payment penalty notice from the IRS, call the telephone number on the notice to have the agency abate the penalty.

Claiming losses this tax year or next: Finally, the disaster relief also includes the option to decide when to claim any uninsured losses on your taxes.

You can do so for the prior year. In this case, that would be the 2020 returns that now don't have to be filed until mid-August. For some storm victims, that could mean a return this year to help with repairs and other recovery efforts.

Or you can wait until you file your 2021 taxes next year.

Run the numbers for both tax years and choose the filing date that gives you’re the best result. Remember, too, that you must itemize to claim the major disaster losses. You can read more about this process in my earlier post, Considerations in making a major disaster tax claim.

And whenever you do claim the losses, be sure to include the FEMA disaster declaration number on your return. For this latest flooding situation, that means notating the top of your 1040 with the phrase Louisiana Severe Storms and Flooding and FEMA 4606-DR.

Eight is more than enough: This latest disaster-related delay of the already COVID-postponed 2021 Tax Day brings to eight the number of such IRS declarations. I'm not sure if that's a record for postponing the normal (albeit late this year) annual tax return filing deadline.

But it is enough to earn 8 this week's By the Numbers recognition.

And just in case you're in one of the disaster locales where you have more time to file, here's the full list:

• All of Texas, Oklahoma and Louisiana, who have until June 15 to file and pay;
• Parts of Kentucky, who have until June 30 to file and pay;
• Parts of West Virginia, who now also have until June 30 to file and pay;
• Parts of Tennessee, who have until Aug. 2 to file and pay federal taxes; and
• Parts of Alabama, who also have until Aug. 2 to file and pay.
• Parts of Louisiana, who have until Aug. 16 to file and pay.

To all these taxpayers dealing with disaster damage, carefully consider how the tax code can help with your storm recovery. You want to make sure you get the most relief you can in the extended time frame the IRS allows.

You also might find these items of interest:

• Atlantic hurricane season starts early for 7th straight year
• State disaster declarations could trigger quicker IRS tax relief under House bill
• Storm Warnings: A multi-page collection of blog posts on preparing for, recovering from, and helping those dealing with natural disasters

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