As the clock ticks closer to the May 17 deadline, taxpayers across the United States are urged to take action to claim their share of over $1 billion in tax refunds for the 2020 tax year. Additionally, individuals and businesses in the Wrangell Cooperative Association of Alaska Tribal Nation who were affected by severe storms, landslides, and mudslides in late 2023 have been granted extended deadlines by the Internal Revenue Service (IRS). Here’s what you need to know to ensure you don’t miss out on potential refunds or face penalties.
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IRS Tax Refunds for Affected Areas
The IRS recently announced tax relief measures for individuals and businesses in the Wrangell Cooperative Association of Alaska Tribal Nation, an area ravaged by severe natural disasters. Taxpayers in this locality now have until July 15, 2024, to file various federal individual and business tax returns and make necessary tax payments. This relief is also available to any other Alaska localities subsequently added to the disaster area.
Filing and Payment Extensions
The relief extends various tax filing and payment deadlines that occurred between November 20, 2023, and July 15, 2024. Affected individuals and businesses now have until July 15 to fulfill their tax obligations. This includes income tax returns, contributions to IRAs and health savings accounts, estimated income tax payments, payroll and excise tax returns, partnership and corporation returns, and tax-exempt organization returns.
Furthermore, penalties for failing to make certain tax deposits during the specified period will be abated, provided the deposits were made by December 5, 2023. The IRS disaster relief page provides detailed information on other qualifying actions during this postponement period.
Automatic Relief and Special Circumstances
Taxpayers with an IRS address of record located in the disaster area will automatically receive filing and penalty relief, without needing to contact the IRS. However, those who’ve relocated to the disaster area after filing their return may face penalties. In such cases, affected taxpayers should promptly contact the IRS to request penalty abatement.
Additionally, individuals residing outside the disaster area but with necessary records located there can also qualify for relief by contacting the IRS. This provision extends to workers aiding in relief activities affiliated with recognized organizations.
Extensions and Additional Relief
Taxpayers requiring additional filing extensions beyond July 15, 2024, should electronically request them by April 15, 2024. However, requests made between April 15 and July 15, 2024, must be submitted on paper. Regardless of the filing extension, payments remain due by July 15, with the filing deadline extended to October 15, 2024.
Furthermore, individuals and businesses experiencing uninsured or unreimbursed disaster-related losses have options to claim these losses on either the current or prior year’s tax return. This election must be made within six months after the due date of the federal income tax return for the disaster year.
Additional Resources and Assistance
Affected taxpayers may qualify for exclusions on qualified disaster relief payments from their gross income. Furthermore, special provisions exist for retirement plan participants, allowing for penalty-free distributions and hardship withdrawals.
The IRS advises affected individuals and families to seek free tax assistance through various programs such as Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), and IRS Free File. These services offer support in tax preparation and navigating disaster-related tax implications.
Conclusion
With the May 17 deadline fast approaching and tax relief measures in place for disaster-affected areas, taxpayers must act promptly to claim refunds, file returns, and make necessary payments. By understanding the available extensions, relief provisions, and support services, individuals and businesses can navigate the tax implications of natural disasters while ensuring compliance with IRS regulations. For those affected, timely action and utilization of available resources are essential to mitigate financial burdens and secure their rightful tax benefits.
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