The Internal Revenue Service has extended tax deadlines for individuals and businesses affected by Hurricane Katrina. The extension extends the Sept. 15, 2005 deadline for personal and corporate estimated tax payments, along with other filing issues, to Oct. 31.
This relief applies to 31 Louisiana parishes, 15 Mississippi counties, and three Alabama counties. Taxpayers in affected areas should write "Hurricane Katrina" in red ink on forms filed with the IRS. The IRS's statement indicates that it will not charge interest or late penalties that would otherwise apply.
The IRS also announced that it is establishing a toll-free disaster relief number for use by those taxpayers affected by the hurricane. Callers to this dedicated telephone line can find out about available tax relief, get free copies of their tax return transcripts, and receive Disaster Tax Loss Kits. Callers may also be referred to the Federal Emergency Management Agency's assistance lines for additional help. If you are one of the unfortunate taxpayers affected by this tragedy, and you need assistance from the IRS on any tax matters, don't hesitate to call (866) 562-5227.
You should also know that there is special tax relief available to taxpayers living in areas that the president has declared as disaster areas. These special tax provisions are in place to help taxpayers recover financially from these disasters, and they aren't just for Hurricane Katrina; eligible disaster areas include the Wyoming tornado in August and Hurricane Dennis victims from July. Individuals can deduct some losses not covered by insurance by filing amended 2004 tax returns or by claiming this year's losses when filing tax returns next spring. In addition, there are other special tax provisions that may apply if you reside in any of these qualified disaster areas. Check out the IRS announcement and various links providing additional information on this relief.
Finally, many of us want to help disaster victims by donating money, goods, or services. Sadly, times of need often attract scam artists interested in lining their own pockets. Before you donate, make sure that you're giving to reputable and qualified charitable agencies. The IRS has advice on selecting a qualified charity and information on confirming a charity's status with the IRS.
Given the dire shortages of water, food, and medical supplies, taxes are probably the last thing on many victims' minds. Here's hoping their lives return to something closer to normal in the very near future.
When he's not dealing with tax issues, Roy Lewis is a motivational speaker who lives in a trailer down by the river. He understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns, as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.
