Don't Mess With Taxes

Residents of four states this spring found themselves dealing with the aftermath of tornadoes that ravaged their neighborhoods. They were given more time to meet various tax deadlines. Their new Tax Day, July 31, is almost here. (Photo by Chandler Cruttenden on Unsplash)

Attention residents of areas of Arkansas, Indiana, Mississippi, and Tennessee that were declared major disaster areas this spring. Your deadline for filing your 2022 tax return, and completing other tax tasks, is Monday, July 31.

All of the affected taxpayers in those states were in places hard hit by Mother Nature in late March and early April of this year.

The Internal Revenue Service, following Federal Emergency Management Agency (FEMA) designations, understood that these individual and business filers weren't focusing on the regular, and impending, April 18 Tax Day. So it gave them more time, specifically until the end of July, to take care of their tax responsibilities.

Now, that postponed deadline is almost here for the following taxpayers.

Arkansas residents and business owners in Cross, Lonoke, and Pulaski counties. Those counties were hit March 31 by severe storms and tornadoes.

Indiana residents and business owners in 13 counties where severe storms, straight-line winds, and tornadoes touched down March 31 to April 1. The disaster area includes Allen, Benton, Brown, Clinton, Grant, Howard, Johnson, Lake, Monroe, Morgan, Owen, Sullivan, and White counties.

Mississippi residents and business owners in seven counties that were struck by severe storms, straight-line winds, and tornadoes on March 24 and 25. The disaster area includes Carroll, Humphreys, Monroe, Montgomery, Panola, Sharkey, and Washington counties.

Tennessee residents and business owners in 13 counties that were damaged by severe storms, straight-line winds, and tornadoes severe on March 31 to April 1. The disaster area includes Cannon, Giles, Hardeman, Hardin, Haywood, Johnson, Lewis, Macon, McNairy, Morgan, Rutherford, Tipton, and Wayne counties.

Tax filings coming due: The links above provide specific tax relief information for each state's disaster areas. However, the IRS generally provides more time to file eligible returns and make associated payments related to —

• 2022 individual income tax returns and payments normally due on April 18;
• 2022 contributions to IRAs and health savings accounts, for eligible taxpayers;
• Quarterly estimated tax payments normally due on April 18 and June 15;
• Calendar-year 2022 corporate and fiduciary income tax returns and payments normally due on April 18;
• Quarterly payroll and excise tax returns normally due on May 1; and
• Calendar-year 2022 returns filed by tax-exempt organizations normally due on May 15.

Ask for even more 1040 time: If affected individual taxpayers need more time to file beyond their new July 31 deadline, they can file an extension request. This filing, however, cannot be done electronically.

Download Form 4868, complete it, and get it to your local post office so that it's postmarked by July 31.

That will give you until Oct. 16 to file your 2022 tax year Form 1040. It's a day later than usual, with the normal Oct. 15 deadline this year is on Sunday.

Disaster tax deductions: Federal tax law also allows taxpayers in major disaster areas to claim uninsured losses as a tax deduction. They also get to decide which tax year to use to make the claims.

I've discussed this choice in my all-too-frequent disaster declaration posts. 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 that disaster area taxpayers get a choice of tax year in which to make the claim.

That means the filers in Arkansas, Indiana, Mississippi, and Tennessee who have until July 31 (or Oct. 16 if they get an extension) to file their 2022 return can claim any eligible losses on that tax filing, or they can wait and claim the losses on their 2023 tax return they file next year.

Again, this takes some work. You need to the two years' 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.

Finally, whether you are facing Tax Day at the end of this month or live elsewhere, you also might find the following posts on recovering from disasters of interest. Disasters can, and do, happen anywhere, every day of the year.

• Picking up the pieces after a disaster
• 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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