Disaster Tax Information

Dear Friends & Family,

We hope you and your family are safe and well. We know many of you have sustained property damage and, as everyone in our area, have felt the emotional toll of this unprecedented disaster.

While cleanup efforts are a central priority right now, we want to make certain that information relating to the tax consequences for damage and resources for aid are readily available to you. For ease of use, this information will be posted on our website: www.ljcpa.biz. You can access it at any time.

If we prepared your tax returns, and you are in need of information from or copies of your prior year returns, please contact our office. This information is required to file for some types of aid or apply for a disaster loan. We will not be charging our clients for this service.

We would also like for you to let us know if you sustained damage in the flood so we can be prepared to assist you. At your convenience, please email us and let us know if the damage was to your home, business, etc.

Get in touch with us at:

Email: [email protected]

Phone:  Lafayette (337) 269-6032

Baton Rouge (225) 293-8300

The following information applies to any person or business in one of the parishes declared a federal disaster area by the U.S. Government due to the South Louisiana Flooding of 2016.

Unemployment Benefits

Disaster unemployment benefits have been approved for both employees and small business owners/self-employed individuals. In order to qualify, you must be unable to work due to physical damage to your place of employment or place of business, or have sustained an injury resulting from the disaster that prevents you from working.

You must apply by September 15, 2016. You can apply at www.laworks.net.

SBA Disaster Assistance Loans 

The Small Business Administration has a disaster loan program for individuals, businesses and nonprofits. Before applying with the SBA, you must first register with FEMA atwww.DisasterAssistance.gov or call 1-800-621-3662.

You can then apply for a SBA Disaster Assistance loan online at www.sba.gov, or in person at any Disaster Recovery Center.

Tax Return Deadlines 

Internal Revenue Service (IRS):

  • Any returns that were originally due on or after August 11, 2016 and before January 17, 2017 are now due on January 17, 2017. This includes extended 2015 individual income tax returns, 3rd quarter 2016 employment tax returns and many extended business tax returns. However, penalties will not be waived on taxes due on extended tax returns that were originally due before August 11, 2016, as the taxes were due on the original due date.
  • 2016 estimated tax payments due September 15, 2016 and January 16, 2016 are now due January 17, 2017.
  • Any federal payroll and excise taxes normally due on or after August 11, 2016 and before August 26, 2016 will now be due August 26, 2016. If penalties are not waived automatically, and you receive a penalty notice, you may have to call the IRS to request a waiver of the penalties and it should be corrected at that time.

Louisiana Department of Revenue (LDR) :

  • Individual, corporate and other income tax returns due on or after August 11, 2016 and before January 17, 2017 are now due January 17, 2017.
  • 2016 estimated tax payments due September 15, 2016 and January 15, 2016 are now due January 17, 2017.
  • Louisiana taxes withheld from employees’ paychecks due on or after August 11, 2016 and on or before November 15, 2016 will have penalties abated if received by LDR by November 30, 2016.
  • Withholding returns due on or before October 31, 2016 are now due by November 30, 2016.
  • Sales, excise and severance taxes and returns originally due 8/20/16, 9/20/16 and 10/20/16 are now due November 15, 2016.
  • Many less common Louisiana taxes and returns have also been extended. Seewww.revenue.la.gov for more information.
  • In order to facilitate correct processing, if you are filing a paper return with LDR, write “South La. Flooding 2016” in BLACK ink at the top of the return.

Deducting Losses from the Disaster on Your Tax Return 

First, document everything you can. Take pictures, keep receipts and have signed contracts when possible. If your property is insured, you must file an insurance claim in order to claim a deduction for any damage not covered by insurance.

If you have losses on your primary residence as a result of the disaster, you may be eligible for a tax deduction. You have the choice of taking the deduction on your 2015 or 2016 return. If you have already filed your 2015 return, you may file an amended return to claim a refund. This amended return is due by the due date for your 2016 return, including extensions.

Some of the computations involved in the deductions are affected by other amounts on your tax return. If you don’t need the money immediately for disaster assistance, we recommend you wait until you have all information for your 2016 return to decide which year to claim the loss, so that you may do so on the year that is most beneficial to you. Even if you decide to include the loss on an amended 2015 return before you have information for your 2016 return, you must wait until you have valid assessments of the damage and an estimate of any insurance reimbursement or aid you will receive.

Business property and rental property that sustained damages may also be eligible for tax deductions. Again, if you have insurance coverage on the property, you must file a claim with your insurance company and you must wait to take the deduction until you have valid assessments of the damages and an estimate of any reimbursement.

Businesses who are located outside of a disaster area but have critical records maintained in a declared disaster area may also qualify.

In an upcoming newsletter, we will include more details about computing the losses for a primary residence, rental property and business property.

If you made it all the way to this sentence without your eyes glazing over, congratulations and kudos to you! We are here to support you in any way we can, and look forward to assisting our clients throughout this recovery and rebuilding process.