Tax Relief and Claiming Losses from Flooding

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By Suzonne V Cowart, CPA
    Since the flood waters have receded, clean-up and recovery efforts have  begun.  Part of our recovery includes the tasks of filing for FEMA assistance, insurance claims, tax relief, and claiming tax losses.   As overwhelming as the flood was, this process can be overwhelming as well.
The IRS has issued some relief measures to Louisiana flood victims.  If you currently have a return that is under extension for 2015 taxes, you will have until January 17, 2017 to complete and file those extended returns.  This includes the September 15 deadline for making quarterly estimated tax payments and the October 31 deadline for business quarterly payroll and excise tax returns.  Those estimated quarterly tax payments, payroll returns, and excise tax returns will all be due by January 17, 2017 along with your fourth quarter estimated tax payments and payroll returns.
    Louisiana Department of Revenue has also issued similar tax relief measures.  For businesses, Sales tax returns/taxes due which were due after August 11, 2016 have been extended to November 15, 2016.  Withholding returns/taxes which were due after August 11, 2016 and before November 15, 2016 have been extended to November 30, 2016.  Estimated tax payments for individuals and businesses due on or after August 11, 2016 and before January 17, 2017 are extended until January 17, 2017.
    There may also be relief available for property taxes as well.  It is suggested that property owners affected by the flooding contact their assessor’s office in order to submit evidence of damages that have affected property values.  More information will be available on property tax relief along with related deadlines.
    In order to claim a casualty loss related to the flooding event, Form 4684 will need to be completed.  Affected tax payers can claim the casualty loss on Form 4684 either in 2016 or by amending their 2015 tax return.  Flood victims will need to keep in mind that in order to complete Form 4684 all insurance payments will need to be received, complete documentation of damaged or destroyed property prepared, and receipts of all repairs and replacement property obtained and retained.  Many of the insurance adjusters have spreadsheets or forms for claimants to utilize in preparing documentation for filing claims.  This same information will be needed to complete Form 4684 along with settlement documents from insurance companies.  If you did not have insurance, the same information will need to be gathered for all uninsured property.  This includes household appliances, electronics, lawn equipment, etc.  IRS Publication 547 and 584 can assist you in the information you will need to gather and can be found at   FEMA publication F-687 is also helpful in guiding you for FEMA claims.
    The process of filing your 2016 taxes or amending your 2015 taxes to claim a casualty loss will be a tedious process.  Maintaining all documentation will be necessary to make this process less time consuming and less painfull.  It is recommended that you seek a professional tax preparer to assist you with properly filing Form 4684.  
    DISCLAIMER: Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.