Newspaper article The Record (Bergen County, NJ)

Tax, Insurance Help on Storm Issues

Newspaper article The Record (Bergen County, NJ)

Tax, Insurance Help on Storm Issues

Article excerpt

Q. Now that most of the immediate needs after superstorm Sandy are being met, can you give me some tips that can help me -- and my small business -- regarding some of the longer-term tax and insurance issues of the storm?

* Tax issues -- Taxpayers impacted by the storm in specified counties in New Jersey have been granted an extension on their tax filings and payments. Any affected individuals and businesses have until Feb. 1 to file fourth-quarter individual estimated tax payments, payroll and excise tax returns, payment for the third and fourth quarters, and nonprofit organizations filing Form 990 with an original or extended deadline falling during this period. Additionally, the IRS is waiving failure-to-deposit penalties for late federal payroll and excise tax deposits, as long as they are made by Nov. 26, 2012.

* Casualty losses -- Losses for your personal-use property are potentially deductible. This deduction is limited to taxpayers who itemize their deductions. If you have filed a claim for reimbursement, no portion of the loss is deductible until the claim is resolved. A casualty loss deduction is allowable only for the amount of the loss that exceeds $100 per casualty. Also, the net amount of all of a taxpayer's casualty losses is allowable only for the amount of the losses that exceed 10 percent of adjusted gross income for the year.

The amount of your casualty loss is determined by the decrease in fair market value of the property as a result of the casualty, limited to the taxpayer's adjusted basis in the property.

You can claim the loss this year or in 2011. Taking the loss via the filing of an amended 2011 income tax return may increase your tax savings, and you may get your refund earlier than waiting to file your 2012 income tax return next year. You will need a description of the property, the cost basis and the fair market value before and after the casualty.

* Business losses -- Casualty losses on business property are computed in the same manner as personal property, except that the $100 deduction and 10 percent adjusted gross income limit do not apply. …

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