What is the IRS doing to help with natural disaster relief?
We are getting hit with a one-two punch this hurricane season between Hurricane Harvey, Hurricane Irma and who knows what else will hit. The last several years the IRS has typically acted to provide taxpayer relief for natural disasters such as hurricanes Kartina and Rita, the 2014-2015 record snow fall in New England, the 2010 New England floods, Hurricane Sandy, Hurricane Matthew, the Ebola Outbreak in 2014, and the 2010 Hatian earthquake. As you read this you would think we were facing the end, but thank goodness there has been help from the IRS. The typical measures often include delaying various filing deadlines, delating various payment deadlines, loosening rules for write offs for damage, and allowing for certain charitable contributions.
What has the IRS done so far regarding Hufficane Assistance?
Paid Time Off Donation
Did you know that you can donate your sick/vacation/personal pay or other Paid Time Off options to natural disaster relief? The pay is not reflected in one’s income and the employer can write it off as a business expense rather than a charitable contribution. This benefits the taxpayer as it keeps one’s AGI (adjusted gross income) down and it benefits the employer since business expenses receive preferable treatment when compared with charity which might be limited.
Easier Access to 401K & 403B Hardship Distribution
The IRS is allowing for easier access to 401k & 403b funds by liberalizing hardship distribution requirements and loan provisions. Each retirement plan has its own provisions that govern some of these actions so they may not apply to all. However, if a retirement plan intends to amend to provide for loan features and hardship withdrawal features, then a taxpayer can take either action before the plan is formally amended.
Corporate and Personal Extensions Deadlines Postponed
The IRS is also postponing a number of deadlines for persons in affected areas such as the September 15th and October 15th corporate & personal extended deadlines. Estimated tax payment deadlines have also been delayed in certain cases. The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief; however, if you or your business was affected by Harvey and you happen to reside outside the affected area, you can still call the IRS and ask for relief.
BEWARE OF FAKE CHARITY SCAMS
Finally, BEWARE OF FAKE CHARITY SCAMS!!! We cannot stress this enough. There are charities out there that seek to just rip you off under the guise of natural disaster relief. They pull at your heart strings and yet they have no intention of helping those who genuinely need hurricane relieve assistance. There are other charities that claim to assist with Hurricane Relief under many clever names, but in reality all they do is put money in their agenda pot. So make sure you vet the charity carefully.
You will learn a lot about what charities are out there to assist hurricane victims with natural disaster relief just by watching mainstream media. Regardless if you want a mainstream or faith based charity, you can always vet these charities on GuideStar.org, a charity check website that puts out all the major information you need to learn about your choice of assistance. Guidestar.org tells you the description of the charity with financial information. This website also allows you to download a full report on your charity provided they are listed including: Contact Information, if the charity is known by another name, the charity’s mission, impact summary, financial data, financial information, forms 990s files with the IRS, Annual Reports, board of directors, etc.
Sources and Resources
- Emergency Savings: 67% of People Don’t Even Have $500 Emergency Fund
- Did You Donate to Charity?
- Don’t Expect the IRS to Take Your Word on Charitable Deductions – Substantiate
- Charitable Contribution: Tax Plan for Potential IRA-to-Charity Provision
- Year-End Tax Strategy: Do You Have One?