Momentum - Business to Business Online Magazine November 2017 | Page 28

Tax Tips to Help Those affected by Hurricane Harvey! Newest Major Announcements – For Personal Losses. • If you filed for a Personal 1040 or Business return extension for 2016 you have until January 31st, 2018 to file. There are many other business form extensions available as well. • Take advantage of more valuable personal casualty loss write-offs: The new law loosens the restrictions to allow recent hurricane victims larger deductions. You no longer have to itemize to get the relief. Your Standard Deduction is increased by the loss. The 10% of Adjusted Gross Income limitation is removed, however the IRS increases the $100 per casualty floor to $500. • Understand business casualty loss write-offs: If you have disaster losses to business property, (Desks, furniture and equipment), you can deduct the full amount of the uninsured loss as a business expense on your entity’s tax return or on the appropriate Form 1040 schedule if you operate as a sole proprietor. The calculation of the “uninsured loss” is complex and a professional should be consulted. • Qualified Hurricane Distributions from Retirement plans: ✴ Elimination of the 10% Retirement Distribution Penalty: ✴ The IRS has liberalized hardship distribution rules. The new law states you can make “qualified hurricane distributions” from your retirement plans of up to $100,000(aggregate) made on or after August 23, 2017 and before January 1, 2009 as long as you are an individual whose principal place of abode on August 23, 2017 is located in the Hurricane Harvey Disaster area and who has sustained an economic loss by reason of Hurricane Harvey. This includes IRA’s, and 401K’s if allowed. There is also an ease up on the rules of paying tax on the distribution and the availability to contribute back to the plan, Better yet, you can spread the income over 3 years. Please consult your Investment Advisor and Plan Consultant. 27 MOMENTUM / November 2017 By: Judy A. West Managing Member, MSTA LLC General Partner, Main Street Tax Advisors, LP www.mainstreettaxadvisors.com [email protected] • When to Claim: The IRS allows you to claim your losses on your unfiled 2016 return, 2017 return or amend your previous 2016 up to October, 15, 2018. • Make sure to consult with a tax professional: Using a tax professional does cost money, but not using one this year could cost you more! As you work to rebuild, consult with Judy West, CPA, Matt Shell CPA or any other of the professionals at Main Street Tax Advisors for a full explanation of the implications of a major property loss as there could be additional considerations in your situation. This area of the tax law can be complicated, but the tax dollars involved may be significant. Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter.