Don't Mess With Taxes

The Nov. 20, 2023, landslide near Wrangell, Alaska. (Image courtesy Alaska Department of Transportation and Public Facilities)

Residents of Hawai'ian counties that were devastated by wildfires in 2023 got a bit a good news from the Internal Revenue Service last week. The tax agency now is giving them until Aug. 7 to complete some tax filing and payment tasks.

Tribal Alaskans who sustained damages from severe storm-induced land- and mudslides also get more tax time. Their new tax deadline is July 15.

As is the usual procedure, the IRS tax relief decisions follow official declarations by the Federal Emergency Management Agency (FEMA).

Hawai'i extension now covers 2023 returns: The IRS originally provided relief to affected Hawai'i taxpayers shortly after the fires, which took more than 100 lives, also caused massive damage to individual and business property in the 50th state's Maui and Hawai'i counties.

The previous federal tax relief, announced shortly after the August 2023 fires, covered tax deadlines through Feb. 15. This extension now covers federal income-tax filings for 2023, giving taxpayers until Aug. 7 instead of April 15 to file those returns and pay any taxes due.

In addition to the later Tax Day for 2023 return filing, the relief means affected Hawai'i residents also have until Aug. 7 to make —

• 2023 contributions to IRAs and health savings accounts;
• Quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, April 15, and June 17, 2024;
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31, April 30, and July 31, 2024;
• Calendar-year partnership and S corporation returns normally due on March 15, 2024;
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024; and
• Calendar-year tax-exempt organization returns normally due on May 15, 2024.

In addition, individuals, businesses, and tax-exempt organizations who had valid extensions to file their 2022 returns now have until Aug. 7, 2024, to file those taxes. However, payments on the 2022 tax year returns are not eligible for relief because they were originally due before the wildfires occurred.

Alaska storms and aftermath: The IRS also last week announced tax relief for individuals and businesses in the Wrangell Cooperative Association of Alaska Tribal Nation that were affected by severe storms, and deadly landslides and mudslides that began on Nov. 20, 2023.

These taxpayers in our 49th state now have until July 15 instead of April 15 to file their tax year 2023 returns and pay any due tax.

The new mid-July deadline for the affected Alaska residents and business owners also applies to —

• 2023 contributions to IRAs and health savings accounts;
• Quarterly estimated income tax payments normally due on Jan. 16, April 15, and June 17, 2024;
• Quarterly payroll and excise tax returns normally due on Jan. 31 and April 30, 2024;
• Calendar-year partnership and S corporation returns normally due on March 15, 2024;
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024; and
• Calendar-year tax-exempt organization returns normally due on May 15, 2024.

In addition, penalties for failing to make payroll and excise tax deposits due on or after Nov. 20, 2023, and before Dec. 5, 2023, will be abated as long as the deposits were made by Dec. 5, 2023.

No need to contact IRS: The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in a disaster area. So the affected Alaska and Hawai'i taxpayers don't need to contact the agency to get their respective tax relief.

However, affected taxpayers who don't have an IRS address of record in the disaster area because, for example, they moved to the area after filing their prior returns may need to reach out to the IRS.

This is particularly true if these individuals or business filers receive a late-filing or late-payment penalty notice from the IRS for the tax relief/postponement period for their area. In these cases, the taxpayer should call the number on the notice to have the penalty abated or call the IRS toll-free at (866) 562-5227 to receive appropriate disaster tax relief.

In addition, the IRS will work with any taxpayer who lives outside the disaster area, but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS toll-free at (866) 562-5227.

The tax relief also applies to recognized government or philanthropic organization workers who are assisting relief activities in major disaster areas.

Regular extensions also available: If your disaster areas extended filing time to July 15 or Aug. 7 still is not enough for you to complete your 2023 tax return, you can get additional tax-filing time by filing for an extension. This will give you until Oct. 15 to file your return.

You can file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, electronically if you do so by the regular April 15 Tax Day.

However, if you determine after that date that you can't make your new disaster-granted tax deadline of July 15 for Alaska filers or Aug. 7 for those in Hawai'i, you must file a paper Form 4868.

See more tax forms and more about them at Tax Forms 2024.

Whether requested electronically or on paper, you'll still have until Oct. 15 to send the IRS your tax paperwork. But remember that this is just an extension to file, not to pay, even if you've been through a major disaster. You must make any tax due payments by your July or August disaster-extended deadline when you file for more time.

Claiming a disaster tax deduction: All of the taxpayers covered by the relief provided in FEMA/IRS major disaster actions are eligible for a variety of relief. The assorted links in the state names earlier in this post have more disaster area discussions, as well as details on those areas' specific disaster-related tax relief.

Individuals and business owners in any disaster area also should check with their state tax department about any relief available at that level.

The added tax time for Alaska and Hawai'i federal taxpayers earn their new deadlines of July 15 and Aug. 7 recognition as this weekend's By the Numbers figures.

Finally, I want to emphasize that federal tax law also provides those who've endured a major disaster the option to claim any uninsured losses as a tax deduction on the tax returns they send to the IRS.

As long-time readers know, I've discussed this option in the all-too-frequent disaster declaration posts here on the ol' blog. You can find more about potential disaster tax deductions in my post Considerations in making a major disaster tax claim.

You also can find more on taxes and major disasters in the following posts.

• Picking up the pieces after a major disaster (after Tennessee info)
• Document your property for tax, insurance claims before storms hit
• 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

Want even more? Then peruse the ol' blog's posts in the disaster category.

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