Hurricane Sandy Victims Get Tax Breaks - Storm Damage, Tax Relief - AARP Ever...
Sandy' s Victims Get Tax Breaks
IRS extends filing deadlines waives penalties in the disaster zone
If you’re a victim of Hurricane Sandy and you need to take a hardship withdrawal or loan from your 401(k) retirement plan, the IRS is making easier to do that – without the standard red tape. The agency says it’s allowing employers to provide distributions or loans to participants now, without first getting the documentation they typically require for such transactions. The IRS also broadened the expenses that qualify participants for hardship withdrawals – it now includes buying food and paying for shelter while waiting for repairs. Getty Images Victims of Hurricane Sandy will get extra time to file various taxes, returns and payments. However, it’s still not a great idea to tap your retirement plan if you can help it. You’ll still get hit with taxes and a 10 percent penalty for taking a hardship withdrawal if you’re under 59 ½. Not every plan allows for hardship withdrawals, so check with your employer for details. The agency has also announced that individuals and businesses in parts of Connecticut, New Jersey and New York that have been deemed disaster zones will get extra time to file various . IRS deadlines that fall on dates beginning in late October have been extended to Feb. 1, 2013. This relief applies to fourth-quarter individual , originally due Jan. 15, 2013, and to payroll and excise tax payments for the third and fourth quarters, due this past Oct. 31 and Jan. 31, 2013, respectively. Related
— Receive access to exclusive information, benefits and discounts. The relief also extends to tax-exempt organizations that are required to file Form 990 series returns. The IRS says penalties and interest that would otherwise apply to late payments or filings will be automatically waived for people in the disaster zone. There is no need to contact the IRS to request a waiver. Workers assisting in relief efforts and affiliated with a or philanthropic organization also are eligible for the tax relief. The IRS has also said it will work with any taxpayer outside the disaster zone but whose books, records or tax professionals are located inside it. Other IRS steps: * A pledge to expedite the applications of new charities seeking tax-exempt status to aid victims of Sandy. But the agency urges people to donate to existing charities. * Approval of programs by which employees can donate vacation, sick or personal leave in exchange for cash payments by the employer to charities helping the victims. For more information, call the IRS at 866-562-5227 or go to the disaster relief page on . Carole Fleck is a senior editor at AARP Media. You may also like: Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures
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