Don't Mess With Taxes

The IRS' tax relief for tornado-stricken Mississippians is welcome. But devastated residents could use more help. If you want to provide some support, read on for groups that are conducting a variety of recovery efforts in the storm-stricken areas and could use donations to continue their work.

The devastation from the March 24-25 tornadoes that plowed through the lower Mississippi River Valley is horrific. A massive EF4 twister that cut a 59-mile path of destruction left 26 people dead. Hundreds of residents and businesses were displaced by the severe storms.

The Federal Emergency Management Agency (FEMA) and the White House were quick to act. A major disaster has been declared, meaning the Internal Revenue Service also is providing tax relief for affected residents.

Tax relief, later deadline: Per the usual disaster procedure, the IRS relief applies to areas designated by FEMA. In the Mississippi case, that's individuals and businesses in Carroll, Humphreys, Monroe, and Sharkey counties.

If FEMA subsequently adds other areas to the disaster area, those living or have companies there also will qualify for the same relief. You can periodically check the disaster-eligible localities at IRS.gov's Tax Relief in Disaster Situations page.

Those who qualify for the tax relief will have various tax filing and payment deadlines that occurred starting on March 24 postponed until July 31.

This includes 2022 individual income tax returns and various business returns that are due on April 18. Due to the extended deadline, eligible taxpayers will have until July 31 to make 2022 contributions to their IRAs and health savings accounts.

The July 31 deadline also applies to the quarterly estimated tax payments, due this year on April 18 and June 15.

For businesses, the July 31 deadline applies to the quarterly payroll and excise tax returns normally due on April 30. Penalties on payroll and excise tax deposits due on or after March 24 and before April 10 will be abated as long as the tax deposits are made by April 10.

Other tax relief options: Federal tax law also provides those who've endured a major disaster the option to claim any uninsured losses as a tax deduction. And you get to decide which tax year to use to make the claims.

I discuss this option in the all-too-frequent disaster declarations. You can find more about disaster claim filings in my post Considerations in making a major disaster tax claim.

But I do want to reiterate here the tax year choice. Affected Mississippi taxpayers who can claim losses as an itemized tax deduction need to carefully determine whether to count their tornado disaster losses on their 2023 returns they'll file next year, or on their 2022 taxes that they now have until July 31 to file.

Ask for more time: Run the numbers carefully. All tax and financial factors need to be examined, such as your current and prior year's tax bracket, and any other deductions you may be able to claim in either year. Obviously, you want to use the tax year that produces the better tax results.

Making the filing year decision will take some time and added calculations, but the difference could be substantial. So don't rush it.

Get an extension to file if you need. That will give you until Oct. 16 this year (the usual 10/15 date is on Sunday) to file your 2022 return. The IRS notes that Mississippi taxpayers can get an extension electronically by using Free File or IRS Direct Pay. If disaster-delayed filers don't seek an electronic extension by April 18, they'll have to request the extension by filing a paper Form 4868 by their new July 31 deadline.

Finally, regardless of which tax year you use, when you file any disaster-related tax form, include the official declaration number, which is DR-4697-MS. This notation will let the IRS know to give the filing expedited treatment.

Helping disaster victims: The IRS tax relief is welcome, but the Mississippi tornado victims also need some immediate daily living help.

As is the case in major disasters, the major national charities, notably the American Red Cross and Salvation Army, provide on-the-ground help to residents.

Locally, the Mississippi Emergency Management Agency (MEMA) has information on how affected residents can register for assistance, how to volunteer, and where/how to donate.

Also, thanks to Charity Navigator and the magic Google machine, here are some groups, local and national, that are providing recovery services to Magnolia State residents. They will accept your financial donations to support their efforts. If you itemize deductions, you can claim your gifts to these charitable groups on your tax return next year.

The Salvation Army's Alabama, Louisiana, Mississippi Division members are distributing ready-to-eat meals and water to people in Rolling Fork, Amory, Silver City, and Winona, Mississippi. You can donate online, or give to the Mississippi Strong Tornado Relief Drive by texting mstornadoes to 51555.

The American Red Cross of Alabama and Mississippi has set up shelters for those who have been displaced. The group is also serving meals.

Similar services also are being provided by United Way of West Central Mississippi in Vicksburg.

If you want to support religious relief groups providing help to tornado victims, there's Samaritan's Purse, a nondenominational evangelical Christian nonprofit, based in Boone, North Carolina, and Convoy of Hope, a faith-based nonprofit in Springfield, Missouri.

Team Rubicon, a national veteran-led humanitarian organization, is on the ground in the tornado's first target Rolling Fork, Mississippi, helping clear roads for residents and assistors. The group also is helping residents clear trees, tarp their roofs, and remove debris from homes.

Save the Children is delivering child-focused items like hygiene kits and diapers to families in western Mississippi.

The Center for Disaster Philanthropy services focus on long-term recovery needs, such as rebuilding homes and mental health services.

Mercy Chefs is serving meals to tornado victims. So is Global Empowerment Mission, which also is distributing hygiene, health supplies, cash cards, animal survival kits, water, and other necessities.

Finally, North Mississippi Rural Legal Services (NMRLS) is available to help residents with legal issues related to property loss. Those seeking such help can call NMRLS' toll-free hotline (800) 498-1804 Monday through Thursday between 9:30 a.m. to 3:30 p.m. local time.

NMRLS is a 501(c)(3) and accepts donations to help in its work for the state's individuals and families who might not otherwise be able to afford legal advice.

You also might find these items of interest:

• 6 tax donation deduction tips
• IRS and other government resources can help you deal with a natural disaster
• Storm Warnings: Preparing for, recovering from, and helping those affected by natural disasters

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