October 3, 2013

As every year goes, October 15th is the drop deadline for most Americans to file their taxes. This assumes, of course that you dutifully got your automatic extension, giving you extra time to file last year’s taxes. Now, with the arrival of October, the sand in the top of hourglass is just about gone.

Of course October also ends with the deadline — October 31 — for filing Form 941 for the third quarter, as well as the deadline for depositing any undeposited employment tax due. This also includes paying federal unemployment owed through September in excess of $500.

Colorado Storm Victims Get a Break

When severe storms pounded parts of Colorado beginning on September 11, 2013, the result was mudslides, landslides, and flooding. Based on an assessment by the Federal Emergency Management Agency, President Obama declared certain counties to be disaster areas, including the counties of Adams, Arapahoe, Boulder, Clear Creek, El Paso, Jefferson, Larimer, Logan and Weld.

The tax relief provided postpones certain tax filing and payment deadlines until December 2, 2013, for individuals, businesses, and corporations which had already obtained extensions for their 2012 returns. Those who were required to make tax payments for the 2013 third quarter by September 16 also receive an extension.

Note: There is a good chance you may still receive a penalty notice form the IRS. Call the number on the notice to have the interest and penalties abated. Remember, this relief is only available to those who had already obtained extensions.

Casualty Loss Tax Relief

If you live in an area which is a federally declared disaster, such as the above-mentioned counties in Colorado, you have options which can help. You may be able to claim the loss on an original or an amended return for last year. If you have a refund coming this will get the money to you more quickly. The other option is to wait and claim the loss on your 2013 return when you file. Obviously this will take longer, but waiting to claim the loss could bring a bigger tax savings.

Individuals should be able to deduct a personal property loss not covered by insurance or other reimbursements. If you file a 2012 return, the IRS instructs taxpayers to write these words boldly at the top of their returns: “Colorado/Severe Storms, Flooding, Landslides, and Mudslides,” to trigger expedited processing of any refund you might have coming. Contact your tax adviser for information on how to claim a disaster loss by amending a prior-year tax return.

If You Need It, Take It

There’s nothing wrong with taking advantage of extensions to file. But in the long run your affairs will be in better order if you get your information to your accountant in a timely fashion. Otherwise, you could be forced to recreate records lost in a disaster like the Colorado storms. Even with an extension, you could be looking at a living nightmare.

The IRS is updating its Tax Relief in Disaster Situations website to keep disaster victims – from Colorado and other areas — informed of the latest development.