ATTENTION NEW JERSEY TAXPAYERS

 FYI -

According to the Internal Revenue Service (highlights are mine) – 

“Individuals and households affected by Hurricane Ida that reside . . . in Bergen, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Morris, Passaic, Somerset, Union, and Warren counties qualify for tax relief. 

This means that individuals who had a valid extension to file their 2020 returns, due to run out on October 15, will now have until January 3, 2022 to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.”   

And according to the New Jersey Department of the Treasury (highlights, again, are mine) - 

“. . . the New Jersey Division of Taxation is following the lead of the IRS and extending tax filing and payment deadlines for certain taxpayers impacted by Tropical Storm Ida.

This means that individuals who had a valid extension to file their 2020 returns, scheduled to run out on October 15, will now have until January 3, 2022, to file. In addition, taxpayers may be eligible for abatement of penalty and interest on underpaid tax that would normally accrue during the period of the postponement.”

Be aware that if you owe Uncle Sam additional tax with the eventual filing of the 2020 Form 1040 (or 1040-SR) you will still be assessed penalty and interest on the amount due because, as the IRS announcement correctly stated, “tax payments related to these 2020 returns were due on May 17, 2021”.   A valid extension is only an extension of time to file - and not time to pay.  But, surprisingly, Uncle Phil may abate late payment penalty and interest.

TTFN

2019 FEDERALLY DECLARED DISASTER AREAS (SO FAR)

As promised, here are the federally declared disaster areas that qualify for tax relief in 2019 (so far):

Alabama Severe storms, tornadoes, and straight-line winds that took place on March 3, 2019 for individuals who reside or have a business in Lee County.

Arkansas Severe storms and flooding that took place on May 21, 2019 for individuals who reside or have a business in Arkansas, Conway, Crawford, Desha, Faulkner, Jefferson, Lincoln, Logan, Perry, Pope, Pulaski, Sebastian, and Yell counties.

Iowa Severe storms and flooding that took place on March 12, 2019 for individuals who reside or have a business in Fremont, Harrison, Louisa, Mills, Monona, Pottawattamie, Scott, Shelby, and Woodbury counties.

Missouri Severe storms, tornadoes, and flooding that took place on April 29, 2019 for individuals who reside or have a business in Andrew, Atchison, Boone, Buchanan, Carroll, Chariton, Cole, Greene, Holt, Jackson, Jasper, Lafayette, Lincoln, Livingston, Miller, Osage, Pike, Platte, Pulaski, and St. Charles counties.

Nebraska Severe winter storm, straight-line  winds, and  flooding that took place on March 9, 2019 for individuals who reside or have a business in Antelope, Boone, Boyd, Buffalo, Butler, Burt, Cass, Colfax, Cuming, Custer, Dodge, Douglas, Hall, Holt, Howard, Knox, Madison, Nance, Nemaha, Pierce, Platte, Richardson, Saline, Sarpy, Saunders, Stanton, Thurston, and Washington counties, and the Santee Sioux Nation.

Ohio Severe storms, straight -line winds, tornadoes, flooding, and landslides that took place on May 27, 2019 for individuals who reside or have a business in Auglaize, Darke, Greene, Hocking, Mercer, Miami, Montgomery, Muskingum, Perry, and Pickaway counties.

Oklahoma Severe storms , tornadoes, straight-line winds, and flooding that took place on May 7, 2019 for individuals who reside or have a business in Alfalfa, Canadian, Creek, Cherokee, Craig, Delaware, Garfield, Kay, Kingfisher, Le Flore, Logan , Mayes, Muskogee, Noble, Nowata, Okmulgee, Osage, Ottawa, Payne, Pawnee, Pottawatomie, Rogers, Sequoyah, Tulsa, Wagoner, Washington and Woods counties.

South Dakota Severe storms, tornadoes, straight-line winds, and flooding that began on March 13, 2019 for individuals and households who reside or have a business in Bennett, Bon Homme, Charles Mix, Dewey, Hutchinson, Jackson, Mellette, Minnehaha, Oglala Lakota, Todd, Turner, Yankton, Ziebach counties, the Cheyenne River Sioux Reservation, the Pine Ridge Reservation, and the Rosebud Reservation.

And again, for for updates on the areas that qualify click here.

TTFN

A REVIEW OF RECENT TAX DEVELOPMENTS

The week-day daily “Checkpoint Newsstand” from Thomson Reuters recently provided a good summary of some important tax developments that have occurred in the past three months that affect taxpayers, their investments, and their livelihood. 

 

I have provided some of TR’s summary below, with my own wording replacing theirs in several places, and including some of my own personal comments.

 

(1) The Donald T Rump Administration and select members of Congress have released a "unified framework" for tax reform. The official framework document leaves many specifics to be worked out by the tax-writing committees (i.e., the House Ways and Means Committee and the Senate Finance Committee).

 

The “framework” –

 

* Increase the standard deduction to $24,000 for married taxpayers filing jointly, and $12,000 for single filers;

 

* Eliminate the personal exemption and the additional standard deductions for older/blind taxpayers;

 

* Reduce the number of tax brackets from seven to three: 12%, 25%, and 35%;

Increase the child tax credit;

 

* Repeal the individual alternative minimum tax;

 

* Largely eliminate itemized deductions, but retain the home mortgage interest and charitable contribution deductions;

 

* Repeal both the estate tax and the generation-skipping transfer tax;

 

* Provide a maximum 25% tax rate for "small" and family-owned businesses conducted as sole proprietorships, partnerships and S corporations;

 

* Reduce the corporate tax rate to 20% (down from the current top rate of 35%);

 

* Provide full expensing for five years;

 

* Partially limit the deduction for net interest expense incurred by C corporations;

 

* Repeal most deductions and credits, but retain the research and low-income housing credits;

 

* Modernize special tax rules that apply to certain industries and sectors;

 

* Provide a 100% exemption for dividends from foreign subsidiaries; and

 

* To protect the U.S. tax base, tax the foreign profits of U.S. multinational corporations at a reduced rate and on a global basis.

 

As mentioned above, the actual details on these proposals have still not yet been determined.  As it is so late in the year it is, in my opinion, doubtful that substantive tax reform legislation will be passed before year-end.  In any case, I do not expect any legislation to affect the 2017 Form 1040.

 

(2) On September 29, the "Disaster Tax Relief and Airport and Airway Extension Act of 2017" (P.L. 115-63) was signed into law. The Act provides temporary tax relief to victims of Hurricanes Harvey, Irma, and Maria.

 

Relief for individuals includes, among other things, loosened restrictions for claiming personal casualty losses, tax-favored withdrawals from retirement plans, and the option of using current or prior year's income for purposes of claiming the earned income and child tax credits.

 

Businesses that qualify for relief may claim a new "employee retention tax credit" of 40% of up to $6,000 of "qualified wages" paid by employers affected by Hurricanes Harvey, Irma, and Maria (for a maximum credit of $2,400 per employee).

 

In addition to the new law, IRS has granted specific administrative hurricane relief, for example, extending various deadlines, encouraging leave-based donation programs for hurricane victims, and allowing retirement plans to make hardship distributions.

 

(3) On July 28, the Treasury Department announced that it would begin winding down the myRA (my Retirement Account) program—a type of government-administered Roth IRA initially offered by Treasury beginning in 2014. Noting that demand for and investment in the myRA program had been extremely low, Treasury stated that it would phase out the program over the following months.

 

The myRA program will no longer accept new enrollments, but existing accounts will to remain open and accessible, so that individuals could continue to manage their accounts until further notice. Individuals can make deposits, and their accounts would continue to earn interest. Funds in myRA accounts remained in an investment issued by the Treasury Department.  I was personally sorry to see this program go.

 

(4) The government announced a simplified per-diem increase for post-Sept. 30, 2017 travel. An employer may pay a per-diem amount to an employee on business-travel status instead of reimbursing actual substantiated expenses for away-from-home lodging, meal and incidental expenses (M&E). If the rate paid doesn't exceed the IRS-approved maximums, and the employee provides simplified substantiation, the reimbursement isn't subject to income- or payroll-tax withholding and isn't reported on the employee's Form W-2. Instead of using actual per-diems, employers may use a simplified "high-low" per-diem, under which there is one uniform per-diem rate for all "high-cost" areas within the continental U.S. (CONUS), and another per-diem rate for all other areas within CONUS.

 

The IRS released the "high-low" simplified per-diem rates for post-Sept. 30, 2017, travel. Under the optional high-low method for post-Sept. 30, 2017 travel, the high-cost-area per diem is $284 (up from $282), consisting of $216 for lodging and $68 for M&IE. The per-diem for all other localities is $191 (up from $189), consisting of $134 for lodging and $57 for M&IE.

 

(5) Apparently an honest mistake is no excuse for incorrectly claimed advance premium tax credit.  The Tax Court ruled that taxpayers who didn't qualify for the premium tax credit under the Affordable Care Act (Obamacare) because their modified adjusted gross income exceeded 400% of the federal poverty level had to repay all the advance premium tax credit paid on their behalf to their insurer.

 

A sympathetic Tax Court noted that while their state health insurance Marketplace may have incorrectly informed the taxpayers that they were eligible for the credit for 2014, the Court's hands were tied by the Code and regulations. The simple fact was that the taxpayers' income exceeded eligible levels and that they had to repay the advance premium tax credit payments.

 

If you have any questions on how the above developments will affect you I suggest you consult your, or a, tax professional.  You can begin your search for a tax professional at my website FIND ATAX PROFESSIONAL. 

 

TTFN

 

 

 

 

 

 

 

 

TAX RELIEF FOR HURRICANE VICTIMS

On September 29, Trump signed into law H.R. 3823, the "Disaster Tax Relief and Airport and Airway Extension Act of 2017".

 

The disaster relief component of this Act makes temporary changes to the Tax Code for individuals and businesses who were affected in –

 

* the Hurricane Harvey disaster area on or after August 23, 2017,

 

* the Hurricane Irma disaster area on or after September 4, 2017, and

 

* the Hurricane Maria disaster area on or after September 16, 2017.

 

The Act –

 

(1) eliminates the current requirement that the allowable deduction for net casualty losses from the above disasters must be reduced by 10% of Adjusted Gross Income;

 

(2) eliminates the current requirement that taxpayers must itemize deductions on Schedule A to claim a casualty loss deduction for the above disasters (the deduction will be treated as an additional Standard Deduction – and this additional deduction will be allowed in calculating the Alternative Minimum Tax);

 

(3) provides an exception to the 10-percent early retirement plan withdrawal penalty for premature distributions related to hurricane relief for the above disasters;

 

(4) allows for the re-contribution of retirement plan withdrawals for home purchases cancelled due to the above disasters;

 

(5) provides flexibility for loans from retirement plans for qualified hurricane relief for the above disasters;

 

(6) temporarily suspends the 20%, 30% and 50% limitations on charitable contribution deductions to qualified organizations associated with hurricane relief for the above disasters made before December 31, 2017;

 

(7) creates an “Employee Retention Credit” of 40% of wages (up to $6,000 per employee) paid for employers that conducted an active trade or business in the above listed disaster areas on the date of the disaster and the active trade or business for which was rendered inoperable for some period of time following the disaster; and

 

(8) allows taxpayers to use earned income from 2016 to calculate the 2017 Earned Income Tax Credit and Child Tax Credit.

 

TTFN

 

 

 

 

THIS JUST IN

Just wanted to pass along this information from the National Association of Tax Professionals -

 

“Northeast and Mid-Atlantic Granted Extension Relief

 

The IRS has granted businesses affected by this week’s severe winter storm additional time to request a six-month extension to file their 2016 federal income tax returns. The IRS is providing this relief to victims and tax professionals affected by this week’s storm (known as Winter Storm Stella) that hit portions of the Northeast and Mid-Atlantic.

 

Business taxpayers who are unable to file their tax return by today’s due date (March 15, 2017) can request an automatic extension by filing Form 7004 on or before March 20, 2017. Form 7004 provides a six-month extension for returns filed by partnerships (Forms 1065 and 1065B) and S corporations (Forms 1120S).

 

Eligible taxpayers taking advantage of this relief should write “Winter Storm Stella” on their Form 7004 extension request (if filing Form 7004 by paper).”

 

TTFN

 

 

 

 

 

 

 

 

 

DEDUCTING SANDY-RELATED VOLUNTEER EXPENSES

Many individuals, instead of or in addition to making cash donations to relief organizations, are offering hands-on assistance to victims of Sandy.

If you are able to itemize on Schedule A you may be able to claim a tax deduction for any “out of pocket” expenses connected with your Sandy-related volunteer efforts.

It is important to note that, to be deductible, you must be a volunteer with an IRS-qualified organization, such as the Red Cross.

Here is the word on deducting your expenses from the “Out-of-Pocket Expenses in Giving Services” section of IRS Publication 17 (Your Federal Income Tax), with some comments from me (any highlights are mine) -

“Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be:

• Unreimbursed,

• Directly connected with the services,

• Expenses you had only because of the services you gave, and

• Not personal, living, or family expenses

If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. {Using the standard mileage allowance is probably the better choice.  FYI, this rate is set by Congress and not the IRS and has not changed in a dog’s age.  It is possible that Congress may pass legislation to increase this rate for Sandy-related travel only, as they have done in the past with high-profile natural disasters – rdf}

You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate.

You must keep reliable written records of your car expenses.  {This is very important.  Keep a mileage log in, for example, your pocket date book of all the miles driven for Sandy-related relief efforts.  Actuually you should keep good records of ALL of your relief-related expenses. - rdf}

Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure {However, on this issue the IRS also says – “The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip.” – rdf}, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses.

Deductible travel expenses.   These include:

• Air, rail, and bus transportation,

• Out-of-pocket expenses for your car {see above – rdf},

• Taxi fares or other costs of transportation between the airport or station and your hotel,

• Lodging costs, and

• The cost of meals. {Unlike business meals you can deduct 100% of the cost of meals – you are not limited to 50%. - rdf}”

As I mentioned above, Congress may pass legislation to add or liberalize deductions for Sandy-related travel, as they have done in the past with high-profile natural disasters.  If they do I will let you know here at TWTP.

If you donate canned or other food items to a charity for Sandy victims be sure to keep your supermarket receipt and circle the items donated.  And if you donate used clothes or household items be sure to make a detailed listing of what you are giving.

Remember, you must give these items to a recognized charitable organization.  If you put together a care package and give or send it directly to a specific needy individual or family you cannot claim a deduction on Schedule A.

TTFN

DEDUCTING SANDY

Hurricane Sandy was the most devastating and expensive natural disaster to hit the East Coast. 

It has been estimated that Sandy will end up causing about $20 billion in property damages and $10 billion to $30 billion more in lost business.  At least 56 people in the U.S. were killed.  More than 4 million people were without power for more than a week. 

While I was lucky to escape the effects of Sandy, just about every one of my New Jersey friends and clients, no matter where they live in the Garden State, was, or still is effected in some way.

If you are a victim of Sandy, you may be able to deduct losses as an itemized deduction on your Schedule A.  Worth repeating – you must be able to itemize to claim any tax deduction for your losses.

Casualty losses are reported on Form 4684 (PDF), Casualties and Thefts, before being transferred to Schedule A.

A casualty is damage, destruction or loss of property that results from an identifiable sudden, unexpected or unusual event – such as a car accident, earthquake, fire, flood, hurricane, storm, tornado, and the like.

Your loss is the lessor of –

•  the adjusted basis of the property before the casualty or theft, or

•  the decrease in fair market value of the property as a result of the casualty or theft.

You cannot deduct the “replacement cost” of an item totally destroyed in a casualty.  If you lost an item that originally cost you $500, but will now cost $700 to replace, your deduction for that item is NOT $700 – it is $500.  The “adjusted basis” of a personal item is generally its original cost.

You must first reduce the loss by any insurance or other reimbursement you receive, or expect to receive. 

If your reimbursement is more than your allowable loss you may have taxable income.  If you receive an unexpected reimbursement in a subsequent year, or if a reimbursement received after your return claiming the loss has been filed is not what you had expected when calculating the allowable deduction, you may need to make an adjustment on a subsequent Form 1040.

Next you reduce the resulting net amount by $100.  This $100 reduction is per incident.  If there is only one casualty or theft during the year the reduction is $100.  If there are two separate incidents, one casualty and one theft, the total reduction is $200.

The total amount of all net casualty and theft losses for the year, after subtracting actual or anticipated reimbursements and the $100 per incident, is then reduced by 10% of your Adjusted Gross Income (AGI).  The remaining amount is what can be deducted.

If the total amount of net casualty and theft losses for 2012 is $9,500 and your AGI is $105,000, you get no deduction ($9,500 - $10,500 = $0).  

If you have a deductible casualty loss in a disaster area, as would be the case with Sandy, you have the option of claiming the loss on the return for the year in which the casualty occurs – your 2012 Form 1040 - or the previous year.  This means that you do not have to wait until next year to get the refund generated by the casualty loss – you can amend your 2011 Form 1040 and get a refund now, when you need the money to replace and repair.

In the past the idiots in Congress have passed special tax breaks related to victims, and those who provide help to victims, of high-profile natural disasters.  While the idiots in our current Congress could not act properly and timely on the expired and expiring tax breaks, they may enact some Sandy relief before year-end, which could alter the rules discussed above. 

Perhaps they will address the “extenders” in the Sandy relief legislation?

On the income side, BUSINESS INSIDER tells us that “There Are Some Hidden Tax Benefits for Hurricane Sandy Victims” –

·   “Storm-related workers compensation: Workers who receive storm-related compensation from their employers won’t face a tax liability. The payments include a number of expenses such as funeral costs.

·   Payments from charities and state programs: Payments from charities, state programs and the Federal Emergency Management Agency (FEMA) will also be tax-exempt, according to the IRS.

·   401(k) loans: Taxpayers will be allowed to borrow funds from their 401(k) retirement savings in to make storm repairs, or under other specific circumstances, without the usual penalties.”

Of course if you were a victim of Sandy you should contact your tax professional for more information and advice.

TTFN

SANDY TAX RELIEF UPDATE

The latest word from the IRS on relief for victims of SANDY -

“Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Connecticut, New Jersey and New York will receive tax relief. Other locations may be added in coming days based on additional damage assessments by FEMA.

The tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses will have until Feb. 1, 2013 to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due Jan. 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct. 31, 2012 and Jan. 31, 2013 respectively. It also applies to tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period. 

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. The IRS automatically provides this relief to any taxpayer located in the disaster area. Taxpayers need not contact the IRS to get this relief.

Beyond the relief provided by law to taxpayers in the FEMA-designated counties, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief.  Taxpayers who live outside of the impacted area and think they may qualify for this relief need to contact the IRS at 866-562-5227.

In addition, the IRS is waiving failure-to-deposit penalties for federal payroll and excise tax deposits normally due on or after the disaster area start date and before Nov. 26, if the deposits are made by Nov. 26, 2012. Details on available relief can be found on the disaster relief page on IRS.gov.

So far, IRS filing and payment relief applies to the following localities:

In Connecticut (starting Oct. 27): Fairfield, Middlesex, New Haven, and New London Counties and the Mashantucket Pequot Tribal Nation and Mohegan Tribal Nation located within New London County;

In New Jersey (starting Oct. 26): Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, Somerset and Union;

In New York (starting Oct. 27): Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, Suffolk and Westchester.”

TTFN

FILING RELIEF FOR SANDY VICTIMS

I just heard that the “IRS Gives Additional Time to Taxpayers and Preparers Affected by Hurricane Sandy; File and Pay by Nov. 7”.

“The Internal Revenue Service today announced it is granting taxpayers and tax preparers affected by Hurricane Sandy until Nov. 7 to file returns and accompanying payments normally due today. 

The relief applies to taxpayers and tax preparers in an area affected by Hurricane Sandy or otherwise impacted by the storm that hit the Mid-Atlantic and Northeastern United States this week.

This relief primarily applies to businesses whose payroll and excise tax returns and payments are normally due today. No action is required by the taxpayer; this relief is automatic. Regular federal tax deposits are due according to current rules. However, the IRS notes that if taxpayers or tax practitioners receive a penalty notice for this period, they can contact the IRS at the number on the notice to request penalty abatement due to reasonable cause on account of the storm.”

IT AIN'T NECESSARILY SO

The news media, and other tax blogs, have been reminding us lately that extended 2010 Form 1040s (and 1040As) must be postmarked by next Monday – October 17, 2011 – in order to be considered to be timely filed.

While this is basically true, NJ taxpayers (thankfully for my late filers) get until October 31, 2011 to file extended 2010 Form 1040s and 1040As and 2010 Form NJ-1040s – because of Hurricane Irene.

All highlights in the below quotes are mine.

The IRS says in IR-2011-87 –

“The Internal Revenue Service is providing tax relief to individual and business taxpayers impacted by Hurricane Irene.

The tax relief postpones certain tax filing and payment deadlines to Oct. 31, 2011. It includes corporations and businesses that previously obtained an extension until Sept. 15, 2011, to file their 2010 returns and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter of 2011, which would normally be due Sept. 15.”

The relief is available to “certain taxpayers in Connecticut, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Puerto Rico and Vermont”.

In New Jersey the relief applies to the following counties - Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren.  That is all 21 counties of New Jersey – so all of New Jersey gets the extension.

The NJ Division of Taxation tells us -

“New Jersey’s tax relief . . . extends to taxpayers who reside or have a business in all 21 counties of New Jersey impacted by Hurricane Irene and New Jersey considers an affected taxpayer qualifying for tax relief to include businesses, individuals, those with tax records, and relief workers in areas disrupted by Hurricane Irene.

Taxpayers now have until October 31, 2011 to file their New Jersey tax returns such as individual income tax, corporation business tax, sales tax, inheritance tax, estate tax, partnership and other business taxes administered by the Division of Taxation and to submit payments for any return and/or payment, including estimated payments which have either an original or extended due date occurring on or after August 27, 2011 and on or before October 31, 2011.

The extended due date permits individuals and businesses that received a filing extension until October 17, 2011 to have until October 31, 2011 to file their returns. Businesses that previously obtained a filing extension to September 15, 2011 are also covered by this relief and have until October 31, 2011 to file their returns. Estimated tax payments for the third quarter of 2011 are now due October 31, 2011 instead of September 15, 2011.”

Of course this additional time does not mean you should continue to procrastinate.  If you have not already gotten your 2010 tax “stuff” to your preparer – get off your arse and do it!

TTFN

DISASTER RELIEF FOR NEW JERSEY

The IRS has expanded hurricane tax relief to cover taxpayers from all 21 counties in New Jersey.

“The President has declared the following counties a federal disaster area: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 27, and on or before Oct. 31, have been postponed to Oct. 31, 2011. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 27, and on or before Sept. 12, as long as the deposits are made by Sept. 12, 2011.”

The State of NJ is following the federal government in providing extensions to affected taxpayers.

According to the NJDOT website -

“The New Jersey Division of Taxation is following the federal guidelines for tax relief as recently provided in the Internal Revenue Service announcements NJ-2011-42 and IR-2011-88 issued September 1, 2011 for victims of Hurricane Irene.

New Jersey’s tax relief, however, extends to taxpayers who reside or have a business in all 21 counties of New Jersey impacted by Hurricane Irene and New Jersey considers an affected taxpayer qualifying for tax relief to include businesses, individuals, those with tax records, and relief workers in areas disrupted by Hurricane Irene.

Taxpayers now have until October 31, 2011 to file their New Jersey tax returns such as individual income tax, corporation business tax, sales tax, inheritance tax, estate tax, partnership and other business taxes administered by the Division of Taxation and to submit payments for any return and/or payment, including estimated payments which have either an original or extended due date occurring on or after August 27, 2011 and on or before October 31, 2011.

The extended due date permits individuals and businesses that received a filing extension until October 17, 2011 to have until October 31, 2011 to file their returns. Businesses that previously obtained a filing extension to September 15, 2011 are also covered by this relief and have until October 31, 2011 to file their returns. Estimated tax payments for the third quarter of 2011 are now due October 31, 2011 instead of September 15, 2011.

In addition, taxpayers whose preparers were affected by Hurricane Irene have until September 22, 2011 to file returns normally due September 15, 2011. The taxpayer’s preparer must be located in an area that was under an evacuation order or a severe weather warning because of Hurricane Irene, even if the preparer is located outside of the federally declared disaster areas. This relief, which primarily applies to corporations, partnerships and trusts that previously obtained a tax filing extension, is available to taxpayers regardless of their location. This relief does not apply to any tax payment requirements.

If you receive a billing notice from the Division, you should call our Customer Service Center at the number listed on the notice to explain your circumstances. If you have additional questions about New Jersey tax relief for Hurricane Irene, call 609-292-6400 or e-mail the Division.”

It appears that for both federal and NJ returns there is no need to write “Hurricane Irene” or anything special on returns filed within the newly extended deadlines.  Both Sam and Chris should automatically identify your qualification when processing the return.  If you are penalized for late filing or paying, and you qualify as an affected taxpayer, you should write to Sam or Chris and the P+I will be abated.

While Irene did not affect me personally, my computer’s diarrhea caused delays for me, and I am happy to have the deadlines extended.

TTFN