Don't Mess With Taxes

And the disasters (and tax relief) keep coming. A glacial lake outburst in the Juneau, Alaska, area in August produced flooding in the state capital, prompting a major disaster declaration and a new May 1, 2025, tax deadline.

Homes and roads in northern Juneau, Alaska, were inundated on August 8, as flood waters overtopped the banks of the Mendenhall River. The flood was caused by glacial lake outburst from Mendenhall Glacier near the Alaskan state capital. A U.S. Geological Survey (USGS) time-lapse video from May 1 to Aug. 7 captures the dramatic rise and fall of water levels in Suicide Basin during the outburst event that caused the flooding. (Photo by Alaska National Guard, Flickr CC 2.0)

Millions of Floridians are still trying to put their lives back together after the one-two punch of deadly Hurricanes Helene and Milton. And we’re still watching Hurricane Helene’s aftermath in North Carolina, where storm damage has affected early voting in a key presidential election swing state.

But there are lots of major disasters across the United States that don’t get national coverage. Take, for example, the Juneau, Alaska, area in early August.

While that flooding in the nation’s northernmost state might have slipped by relatively unnoticed, federal officials took note as they do in all officially-declared major disaster areas.

So, the affected Alaskans will get special tax considerations, including a new May 1, 2025, deadline.

Similarly, taxpayers in eight states who endured earlier outbursts of Mother Nature’s ire are facing a disaster-extended deadline next Friday, Nov. 1.

Nov. 1 deadline next week: Since Nov. 1 is next Friday, let’s start with a reminder to the affected disaster area taxpayers in those states.

The Nov. 1, which also is this weekend’s By the Numbers figure, applies to the taxpayers in those states who earlier this year filed extensions to submit their 2023 tax year returns.

Those extension filers in parts of Arkansas, Iowa, Kentucky, Mississippi, New Mexico, Oklahoma, Texas and West Virginia now must get their 2023 Form 1040s to the IRS by Nov. 1.

If they miss the Friday, Nov. 1, due date — and yes, my repeated repeating of the disaster deadline is my way of nagging reminding the affected taxpayers — they could face penalty and interest charges if they didn’t pay all due tax when they filed for the extension.

Alaskan glacial flood: The latest group of taxpayers who’ve joined the disaster-extended tax deadline club are individuals and business owners in the City and Borough of Juneau.

On August 6, the Mendenhall River, which runs through northern Juneau, exceeded major flood stage, flooding streets, inundating homes, and displacing residents. This flooding was caused by a glacial outburst, when water that is dammed up by a glacier suddenly gives way and is released downstream.

The Mendenhall River gauge crested at a record 15.99 feet in the early morning of Aug. 6. That topped the prior record of 14.97 feet, which was set nearly a year ago.

IRS disaster tax relief: As is the usual procedure, the IRS announcement of tax relief for the Juneau residents followed the Federal Emergency Management Agency (FEMA) major disaster declaration, Alaska Flooding DR-4836-AK.

The relief for the Juneau taxpayers covers tax deadlines that began on Aug. 5, the day that the glacial flooding began. These affected taxpayers now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments. This extended due date applies to —

• Any 2024 individual or business tax return normally due during March or April 2025.
• Any individual, business or tax-exempt organization that has a valid extension to file their 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the flooding occurred.
• 2024 quarterly estimated income tax payments normally due on Sept. 16, 2024, and Jan. 15, 2025, and 2025 quarterly estimated tax payments normally due on April 15, 2025.
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2024, and Jan. 31 and April 30, 2025.

Business taxpayers should note that the IRS is abating penalties for failing to make payroll and excise tax deposits due on or after Aug. 5 and before Aug. 20 as long as the deposits were made by Aug. 20, 2024.

Deducting uninsured disaster losses: When disaster-affected taxpayers do get their lives back in some order and start thinking about taxes, the IRS reminds them that they may be able to deduct some disaster losses. This itemized claim is available for damaged or destroyed property not covered by insurance or other reimbursement.

Claiming the loss can result in a larger refund, particularly if you maximize it by choosing the tax year in which to make the claim. When it comes to disaster casualty losses, taxpayers can choose to claim it on either the return for the year the loss occurred — in this instance, the 2024 return normally filed next year — or on the return for the prior year, which is the 2023 return filed this year.

If you decide to use the 2023 tax year to make the claim and have an extension to file that material, you can do so when you file the original return. However, some taxpayers might need to file an amended tax return (Form 1040-X) to make a prior year disaster loss claim.

Regardless of when you make the claim, arriving at the decision is not one to be taken lightly. You need to run the numbers for each potential tax year filing to see which produces the more favorable tax result.

My post on considerations in making a major disaster tax claim has more. So does IRS Publication 547, Casualties, Disasters, and Thefts.

Other IRS resources for taxpayers who are in major disaster areas include FAQs for disaster victims; IRS.gov’s disaster assistance and emergency relief for individuals and businesses page; and Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) and its business companion Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook.

Taxpayers with disaster-related tax questions also can call the agency’s toll-free disaster hotline at (866) 562-5227. And, of course, you can talk with a tax professional for help in making this decision and filing.

Other disasters and deadlines: Finally, the IRS reminds taxpayers who got 2023 tax return filing extensions and who are in other major disaster areas of their upcoming 2025 extended deadlines.

Feb. 3, 2025, is the deadline for taxpayers in the entire states of Louisiana and Vermont, all of Puerto Rico and the Virgin Islands, and parts of Arizona, Connecticut, Illinois, Kentucky, Minnesota, Missouri, New York, Pennsylvania, South Dakota, Texas and Washington state.

May 1, 2025 is the new due date for taxpayers in the entire states of Alabama, Florida, Georgia, North Carolina, and South Carolina, and parts of Tennessee and Virginia. For these taxpayers, next May 1 will also be the deadline for filing their 2024 returns and paying any tax due.

The IRS also is providing special relief for terrorist attacks in Israel. Taxpayers who live or have a business in Israel, Gaza, or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel have until Sept. 30, 2025, to file and pay. This includes all 2023 and 2024 returns.

You also might find these items of interest:

• After 3 hurricanes, IRS grants tax relief to all Florida taxpayers
• Oct. 15 tax filing extension deadline extended for disaster area, and other, taxpayers
• Storm Warnings: Preparing for, recovering from, and helping those affected by natural disasters

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