IRS Offers Tax Relief for Victims of Hurricanes Harvey, Irma, and Maria

– by Brian Rippeon, CPA, Principal

Over the past weeks, IRS has announced relief for victims of the recent hurricanes. Some of the provisions for affected taxpayers in Florida, Georgia, Puerto Rico, the Virgin Islands, and parts of Texas include:

• Delayed tax filing deadlines – Individuals and businesses with tax filing deadlines ranging from September 15, 2017, to January 16, 2018, might qualify for a postponed deadline of January 31, 2018.
• The 10% penalty on early retirement plan distributions up to $100,000 is waived (distributions to those under age 59 ½).
• Employers may also make loans to employees from their retirement plan accounts up to the lesser of $100,000 or 100% of the account, and repayment can be deferred. A person living outside of the disaster area may take advantage of this relief to assist a son, daughter, parent, grandparent, or dependent. Hardship withdrawals must be made by January 31, 2018.
• They can deduct casualty losses from the hurricanes on their tax returns regardless of whether they itemize.

In addition, IRS has relaxed some rules regarding charitable donations for those of us living outside of the affected areas who want to help:

• Special relief for employer-sponsored leave-based donation programs.
• 50% of AGI limitation for charitable contributions is suspended for cash donations to qualified charities for aid to hurricane victims.
• The 10% of taxable income limit for corporate charitable donations is suspended for cash donations made to qualified charities for aid to hurricane victims.

For more information, please contact our office:  301-662-9200 or advantage@LSWG.cpa.