Posted: March 5, 2013

Postponement of Deadline to Elect to Deduct Prior Year Losses

In response to the continued effects of Hurricane Sandy, the IRS has postponed the deadline to deduct losses attributable to the October 2012 disaster.

Under special disaster relief tax rules, losses due to Hurricane Sandy may either be deducted on a 2012 tax return or as an amendment to a  2011 tax return. Since most Sandy losses will be considered "casualty losses", the loss must exceed 10% of your Adjusted Gross Income in order to be deductible.  Therefore, there may be a greater tax benefit by amending the 2011 tax return if income was lower in 2011 than in 2012.

Summary

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The States of New Jersey and Connecticut have approved further relief from tax filing deadlines for businesses still reeling from the impact of Superstorm Sandy.

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First and foremost, all of us at Wilkin & Guttenplan want to express our sympathy and concern for all who have been impacted by Hurricane Sandy. Most of our team members were also affected by the storm and many have been collecting items for donation and volunteering at shelters in order to aid in the recovery effort. We understand that only time can heal the wounds created by the storm, but working together we will come back, stronger than before.

HESTEP is providing a sales tax exemption up to $100,000 for each applicable company for purchases of building, construction and renovation materials, machinery and equipment and other items of personal property and related services needed to rebuild after the storm.

The sales tax waiver will be limited to 250 applicants and has a maximum $100,000 sales tax benefit.

All businesses with storm-related physical damages are eligible for the exemption program, however, priority will be given to industrial businesses located within Flood Zone A and the area of New York City impacted by an extensive power outage as a direct result of Hurricane Sandy.

First and foremost, all of us at Wilkin & Guttenplan want to express our sympathy and concern for all who have been impacted by Hurricane Sandy. Most of our team members were also affected by the storm and many have been collecting items for donation and volunteering at shelters in order to aid in the recovery effort. We understand that only time can heal the wounds created by the storm, but working together we will come back, stronger than before.

Federal Tax Day Current, I.4, FEMA Disaster Area Designation and Amendments: Delaware, New York and Rhode Island, (Dec. 10, 2012)

The Federal Emergency Management Agency (FEMA) has announced that the president on November 16, 2012, determined that certain areas in Delaware are eligible for assistance from the federal government under the Disaster Relief and Emergency Assistance Act (42 USC 5121) as a result of Hurricane Sandy during the period of October 27 through November 8, 2012 (FEMA-4090-DR). Accordingly, taxpayers in the following counties who sustained losses attributable to the disaster may deduct the losses on their 2011 federal income tax returns: Kent, New Castle and Sussex.

Federal Relief

Over the past week, Hurricane Sandy has had a severe impact on many individual and business taxpayers across the East Coast. The Internal Revenue Service, in response to the widespread and ongoing devastation, has announced relief for Affected Taxpayers with respect to the counties listed below. Victims of Hurricane Sandy whose primary home or business are located in federally declared disaster areas are considered Affected Taxpayers and may qualify for an automatic extension of time to file and pay certain types of taxes. In addition, taxpayers whose books, records or tax professionals are located in areas affected by Hurricane Sandy may also qualify for relief.