Tax Relief for TN Residents in Disaster Areas

Tax Relief for Tennessee Residents - Tax Deadline Extended Until May 31 for Residents of Affected Areas

Covered Disaster Area

In response to the severe storms that blew through the area on and around February 29, 2012, the President yesterday declared Bradley, Claiborne, Cumberland, DeKalb, Hamilton, Jackson, McMinn, Monroe, Overton, and Polk counties as federal disaster areas.

With this declaration, residents of the above affected areas, as well as businesses whose principal office is located in any one of these areas, have until May 31 to meet certain tax filing and payment obligations.

Affected Taxpayers

The May 31 extension includes the April 17 deadline for filing individual income tax returns, making income tax payments, including estimated tax payments, and making 2011 contributions to an Individual Retirement Account (IRA).

Relief is also granted for taxpayers that have or had either an original or extended due date occurring on or after February 29 and on or before May 31.

Therefore, in addition to individual taxpayers, this tax filing and payment extension affects corporate, estate and trust income tax returns, partnership returns, S Corporation returns, estate, gift, and generation-skipping tax returns, and employment and certain excise tax returns.

The postponement of time does not, however, apply to information returns, such as Form W-2 and Form 1099 series returns.

Casualty Losses

Affected taxpayers have the option of claiming a disaster-related casualty loss on either their 2011 or 2012 Federal Income Tax Return.

Claiming the loss on the 2011 tax return may yield a quicker refund, but, depending on the taxpayer income and deduction level, it may be more advantageous to wait until filing the 2012 tax return to report these losses.

Conclusion

Please consult with your tax HHM tax advisor to determine how best to take advantage of these temporary relief provisions.