No matter how much effort you put into preparing your home or business for a disaster, nothing can really prepare you for the trauma of actually going through one. If you find yourself picking up the pieces after a major catastrophe, here’s a short checklist of tax-related relief that often follows a disaster declaration and a few other pointers to help you start rebuilding.
Remember that the first step toward federal recovery efforts is for the president to declare a federal disaster. Such declarations usually have a geographic focus, listing certain counties that qualify for relief. Once you know you’re in a zone that qualifies, one or more of the following federal programs may apply.
One of the most common forms of relief is the extension of any upcoming tax filing and payment deadlines. You can learn more via the IRS Twitter feed (@IRSnews) or on the Service’s disaster assistance webpage. If you have access to a phone, you can also call the IRS’s disaster line at 866-532-5227.
Casualty Loss Tax Deductions
Affected taxpayers may be able to claim a casualty loss deduction on their taxes for property lost or damaged as a result of a federally declared disaster. Tax law allows these claims to be filed on a current-year return or possibly even as an amendment to a prior-year return in order to speed up any refund that may be generated.
Disaster Loans and Grants
The Small Business Administration offers financial assistance to business owners, homeowners, and renters in disaster areas.
Request a Tax Transcript
It’s not uncommon for those trying to rebuild after a disaster to have lost prior-year tax returns. You can request copies from the IRS. If you note that the request is related to a disaster and specify the state and type of event that occurred, the IRS attempts to speed up the process.
Submit a Change of Address
If you need to relocate, notify the IRS of your new address by submitting Form 8822, Change of Address (PDF).
A Few Other Thoughts
- FEMA points out that local radio and television broadcasts will be the best source for information about emergency housing, food, first aid, clothing, and financial assistance in the first days of recovery.
- Depending on the severity of the damage, authorities may require people to show identification in order to return. If you have a business location that you want to check on, try to include some documentation of the address in your “go bag” to demonstrate that you have a reason to be in the disaster zone when you return. Your driver’s license may get you clearance to return home, but additional documents might be needed to get to your business.
- Remember that “handyman scams” often follow quickly on the heels of a natural disaster that causes significant property damage. Unscrupulous “repairmen” can exert a lot of pressure with statements like, “If you don’t pay me now to get started, I’m going to the next block over and you’ll have to wait for repairs.” Insurers recommend that you don’t sign any contracts or authorize any repairs before you talk to your insurance provider.
We hope that you’ll never have to use any of this information, but if you do, please know that CRI will be here to help you navigate the recovery process.