How Natural Disasters Affect Your Taxes & How to Prepare for Them
While September and October are prime time for Atlantic hurricanes, natural disasters of any kind can strike at any time. As such, it’s a good idea for taxpayers to think about – and plan ahead for – what they can do to be prepared. Here’s what taxpayers should keep in mind:
3 Tips for Taxpayer Natural Disaster Preparation
1. Update Emergency Plans
Because a disaster can strike any time, taxpayers should review emergency plans annually. Personal and business situations change over time, as do preparedness needs.
When employers hire new employees or when a company or organization changes functions, they should update plans accordingly.
They should also tell employees about the changes. Individuals and businesses should make plans ahead of time and be sure to practice them.
2. Create Electronic Copies of Key Documents.
Taxpayers should keep a duplicate set of key documents in a safe place, such as in a waterproof container and away from the original set.
Key documents include bank statements, tax returns, identification documents, and insurance policies.
Doing so is easier now that many financial institutions provide statements and documents electronically, and financial information is available on the Internet.
Even if the original documents are provided only on paper, these can be scanned into a computer. This way, the taxpayer can download them to a storage device like an external hard drive or USB flash drive.
3. Document Valuables.
It’s a good idea for a taxpayer to photograph or videotape the contents of their home, especially items of higher value.
Documenting these items ahead of time will make it easier to claim any available insurance and tax benefits after the disaster strikes.
How to Obtain a Copy of a Tax Return
Taxpayers who need a copy of their prior-year tax return have several options. If they:
- Went to a paid preparer, they might be able to get a copy of last year’s tax return from that preparer.
- Used the same tax preparation software this year that they used last year, that software will likely have their prior-year tax return.
- Didn’t use the same tax preparation software this year, they may be able to return to their prior-year software and view an electronic copy of that return.
How to Get a Transcript
Taxpayers who are unable to access prior-year tax return using the above methods can get a copy of their transcript by calling the office directly or going to IRS.gov and using the Get Transcript application.
By selecting “Get Transcript Online,” the taxpayer can immediately view, print or download their transcript.
If they prefer to have a copy sent to the address that the IRS has on file, they can select “Get Transcript by Mail.” They should receive their transcript in the mail in five to 10 days from the time the IRS receives their request online.
Tax Due Dates for September 2018
Individuals – Make a payment of your 2018 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment date for estimated tax in 2018.
Partnerships – File a 2017 calendar year income tax return (Form 1065). This due date applies only if you were given an additional 6-month extension. Provide each shareholder with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1.
S corporations – File a 2017 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you made a timely request for an automatic 6-month extension. Provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1.
Electing Large Partnerships – File a 2017 calendar year income tax return (Form 1065-B) and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension. Otherwise, see March 15. Provide each partner with a copy of Schedule K-1 (Form 1065-B) or a substitute Schedule K-1.
Corporations – Deposit the third installment of estimated income tax for 2018. A worksheet, Form 1120-W, is available to help you make an estimate of your tax for the year.
Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in August.
Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in August.