|The IRS has extended the filing of income tax returns for everyone who had a valid extension on file from June 15th. The new due date is January 3, 2022. In addition, quarterly estimated 2021 income tax payments for September 15th are also extended.|
For payroll tax payments, at this time it is unclear whether or not that new deadline is Jan. 3rd, 2022, or Sept. 10th, 2021. The notice states that late payment penalties would be abated if deposited by September 10th. Historically, these dates have been the same. It is unknown why payroll taxes were only extended 2 weeks. We know that the IRS/Government seem to always publish things that can be taken several different ways. We will continue to monitor this until we have a clear answer.
Here is a link to the IRS Notice LA-2021-04 with details of the extended dates if you would like to read them.
For those of you who have experienced damage due to the hurricane, please see below:
Casualty Loss Deductions
A casualty loss is calculated by subtracting any insurance or other reimbursement received or expected from the smaller of the decrease in fair market value (FMV) of the property as a result of the casualty or the adjusted basis in the property before the event.
For example, if you had a boat that you purchased for $35,000, but the current value of the boat on August 29th was $20,000 and it was a total loss, you would have a casualty loss of $20,000. But let us say the insurance company gave you $17,000 for the loss of the boat, then your casualty loss would be reduced to $3,000. This is a very simple illustration; in most cases it will be more complicated.
This link will give you a very thorough list of items and categories that maybe you would have overlooked in compiling your casualty loss. I found it quite helpful for clients in Hurricane Katrina. IRS Publication 584.
Naturally, my team and I are here to help you navigate the channels so that we can maximize your loss deduction. However, it is always best to work with your insurance adjuster to minimize the amount of the loss. You may need to ask them for a re-evaluation of your losses after you have received bids on repairs. DO NOT take the advice, that I have heard given by these adjusters. Some have stated that if we cannot cover all the losses, you can deduct in on your tax return. That will only give you a credit on your income tax rate, not the full amount of the loss.
We have all pulled through something like this before, and because of the love for our communities, we somehow find a way to pull through. Please know that my heart goes out to my clients and employees who have suffered from this hurricane. If you have any questions at all, please reach out to us.
Your Accounting Family at Estess CPAs.