The recent hurricanes Harvey and Irma caused devastation in areas throughout the U.S. Virgin Islands, Puerto Rico, Florida and Texas. Businesses in these areas are still struggling to rebuild their buildings and replaced damaged property. Many have lost important data needed to file tax returns. In addition, because of the significant financial impact of these disasters, some businesses simply don't have the capital they need to make estimated tax payments, pay payroll taxes or meet other obligations. Fortunately, the Internal Revenue Service is taking steps to ease some of the tax burden on affected businesses and their employees.
Who Qualifies for Relief?
You may qualify for tax relief if your business is located in an area that was declared a disaster zone by the federal government because of Hurricane Harvey or Hurricane Irma. Certain types of tax relief are also available to workers in a federal disaster area who have 401(k) or other employer-sponsored retirement plans and need money to make repairs after the storm.
What Type of Relief is Available?
Small businesses and other taxpayers located in qualifying areas have already received an automatic filing extension from the IRS. If you had already filed for an extension on your 2016 return, your due date has now changed from October 16 to January 31, and you won't face any late filing penalties as long as you meet the new deadline. If you were required to make estimated tax payments on September 15 and January 16, you can make these payments any time before or on January 31 without facing any penalties.
If the IRS requires you to file quarterly payroll and excise tax returns, any returns that were due on October 31 won't be considered late as long as they are received by January 31.
If any of your employees have employer-sponsored retirement plans, such as a 401(k), the IRS will allow you to relax the rules associated with loans against these accounts so that your employees can get the money they need to repair damage. You can also relax the rules for hardship withdrawals. Your employees must take advantage of this tax relief by January 31.
Contact a Tax Professional
Even with the extensions and other tax relief available from the IRS, you may still have trouble filing and paying your taxes on time. Filing and/or paying will be especially difficult for small businesses that suffered a loss of important data and/or significant financial damage because of the recent hurricanes. If you need help with any aspect of your business's tax obligations, please contact Padgett Business Services today for assistance.
All content posted on this website or distributed by SmallBizPros, Inc. DBA PADGETT BUSINESS SERVICES is intended for informational purposes only. To determine whether these concepts are appropriate for your business, you should seek advice from a PADGETT BUSINESS SERVICES® representative or an independent advisor before implementation.