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IRS Extends Filing Deadline to January 5, 2009 for Affected Taxpayers

September 18, 2008

As expected, the IRS has issued additional guidance for taxpayers in Texas who were adversely affected by Hurricane Ike.  The guidance (IR-2008-107) provides additional relief to affected taxpayers, which includes extending the originally announced seven-day postponement of corporate tax filings and third quarter estimated tax payment deadlines until Jan. 5, 2009.

Taxpayers Affected
Following the hurricane’s landfall on Saturday, the federal government declared the following Texas counties a presidential disaster area qualifying for individual assistance: Angelina, Austin, Brazoria, Chambers, Cherokee, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jasper, Jefferson, Liberty, Madison, Matagorda, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Waller and Washington counties. In a separate announcement, the IRS provided the same relief for taxpayers in the following Louisiana parishes: Acadia, Beauregard, Calcasieu, Cameron, Iberia, Jefferson, Jefferson Davis, Lafourche, Plaquemines, Sabine, St. Mary, Terrebonne, Vermilion and Vernon.

The IRS guidance applies to all taxpayers who live, and businesses whose principal place of business is located in the covered disaster area. Taxpayers not in the covered disaster area, but whose books, records, or tax professionals' offices are in the covered disaster area are also granted relief.

Deadline Extended

The announcement gives affected taxpayers until Jan. 5, 2009 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns) or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 7, 2008 and on or before Jan. 5, 2009.  

Casualty Losses

Affected taxpayers in a presidentially declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements but they must first subtract $100 for each casualty event and then subtract 10 percent of their adjusted gross income from their total casualty losses for the year. For details on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Texas/Hurricane Ike” at the top of the form so that the IRS can expedite the processing of the refund.

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