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Millions of Americans who have been devastated by hurricanes Harvey, Irma, or Maria should see additional help from new tax assistance signed into law last week.
We’re here to help you make sense of the “Disaster Tax Relief and Airport and Airway Extension Act of 2017” so you can get the most from your return and put cash in your hand when you need it most. Here are just a few provisions from the special disaster regulations:
Extended deadlines, enhanced benefits, and allowances for borrowing money and withdrawing money from existing retirement accounts with no tax consequences in the short-term.
The new benefits are on top of existing rules that allow taxpayers to deduct losses from disasters on their tax returns.
- The limits (20 percent, 30 percent, and 50 percent of AGI) on charitable contributions do not apply to qualified contributions made to a qualified organization
- A special earned income rule for EITC and CTC
- Employee retention tax credits for employers whose businesses were affected by the storms
It can get tricky – with factors ranging from loss computation, insurance implications, computation of basis in property damaged and other factors, the expanded benefits can be complicated to understand.
These new provisions are complex and available only in special catastrophic circumstances so each person could have a number of different factors affecting their return.
It’s best to consult with a Tax Pro to make sure you’re getting the most from your tax return. For example, if impacted by a disaster, the IRS allows you to select to claim the casualty loss in this year or the previous year – whichever one is better for you. That could mean a refund early or later, but better result, if you’re applying the casualty claim to later tax return.
Everything depends on your specific situation. Once your family and home have been secured, talk to a Tax Pro to maximize the deductions, credits and refund available to you.