Recently, I had the opportunity to tour a domestic violence shelter in Fort Lauderdale, Florida. As we walked through the facility, I observed how much effort it took for these women to transform their lives from being victims into powerful agents who seek justice through taking action against domestic violence.
After hearing their stories of domestic abuse and having their identities revealed by their rescuers, one thing became abundantly clear: these individuals needed time to heal before embarking on any future projects or activities. Thusly, they were not able to devote themselves full-time to such endeavours when they were only beginning to recover; thus necessitating that they suspend any plans they might have made until further notice.
What is a Disaster Relief Tax Credit?
The IRS offers a number of tax relief options for individuals who have been adversely affected by a natural disaster – such as hurricanes, earthquakes and tornadoes. These provisions entitle taxpayers to an increase in their refund if they suffer losses related to these events!
The IRS has created a new relief tax credit that can be utilized by individuals and families who suffered losses during a major disaster after August 29th, 2012. This creative financing tool allows individuals to offset their tax liability with funds from insurance companies or other sources – resulting in more money available for them personally.
Who qualifies for a Disaster Relief Tax Credit?
Unforeseen disasters such as hurricanes, tornadoes and earthquakes can strike with little notice and leave residents unprepared for their aftermath; this is a cause for concern for many.
The Tax Relief for Disaster Victim Assistance Act (TRDA) was passed in December 2016, providing financial assistance to those who were victims of such calamities. The incentives offered by this legislation – $1,500 for individuals or $2,500 per couple – allow eligible taxpayers to claim a tax credit for any amount exceeding the initial grant provided by FEMA. Additionally, up to an additional 10% of expenses may be granted!
In order to be considered “eligible” under the provisions of TRDA, individuals must have incurred expenses related to their property losses resulting from any one of the submitted disaster types:
For example, if you had sustained damage due to flooding caused by Hurricane Harvey in Texas in the month of August 2017 then you would qualify for this tax credit. Likewise if your investments were destroyed by a devastating wildfire outbreak – like the one that scorched over 8 million acres across California’s landmass in October 2018 – thus necessitating extensive reconstruction efforts.
What are the requirements of claiming a Disaster Relief Tax Credit?
The IRS requires that any organization seeking financial assistance for a qualifying disaster must document economic losses incurred as a result of that calamity; likewise, this documentation must be submitted along with all claim forms in order to obtain reimbursement funds.
If the Disaster Relief Tax Credit exceeds your tax liability, you may consider claiming it instead of paying the remaining amount owed.
What happens after I file my claim?
On completion of the initial assessment, a team of experienced professionals will review your claim and contact you with next steps. In most cases, your tax refund or business check could be issued within four weeks – depending on the magnitude of the disaster.
If applicants do not meet all eligibility requirements for the disaster relief tax credit, they must submit proof to regain eligibility. Likewise, if any erroneous information is provided during initial filing; it may necessitate an amendment to one’s original return.
After the disaster
Toward the end of 2018, Hurricane Michael slammed into Florida as a Category 4 storm. The devastation left behind was catastrophic – causing $30 billion in damages and resulting in more than 320 fatalities across the region.
In its aftermath, FEMA launched a Disaster Relief Tax Credit to assist individuals who incurred uninsured losses related to natural disasters. Furthermore, an additional 20 percent tax credit can be claimed if providing assistance towards repair expenses within three years – further expediting reconstruction efforts!
Are you eager to make strides toward rebuilding your life after a disaster? Then, it’s time to take action! Our professionals at DTG are here for you with their expertise in estimating recovery costs and offering disaster relief tax credits to help alleviate financial burdens on affected families.
what is the next step to claim your Disaster Relief Tax Credit?
It is essential to note that the IRS does not provide assistance in claiming your tax credits. Therefore, you must be cognizant of what documentation is required for each claim as well as how much money it will take out of pocket relative to one’s income; otherwise you may find yourself unable to follow through with it.
To access your relief, simply fill out Form 8332, then submit it along with the corresponding IRS form(s) together with all required documentation.
Conclusion
In the aftermath of a natural disaster, local and federal agencies may offer tax relief to compensate individuals for losses sustained due to a calamity such as a flood, hurricane or wildfire.
Throughout 2017 and 2018, the IRS will be offering relief on a number of fronts – from extending the filing deadline for 2017 returns in order to accommodate victims’ needs, to waiving penalties and even reducing tax payments altogether. Additionally, relief will be made available for those who have encountered financial difficulties as a result of Hurricanes Harvey and Irma; severe storms that struck Texas and Florida in recent weeks.
In order to obtain additional information about disaster relief tax credits, consider investigating the resources available on our site or accessing an app that provides more information about these benefits.
