When a natural disaster strikes, taxes are probably the last thing on your mind. But unfair as it may seem, tax day — typically April 15th — will come around no matter what.
The good news: “Historically, the Internal Revenue Service acknowledges the financial impact of devastating storms, droughts, forest fires and earthquakes with extended deadlines and tax relief,” said Intuit TurboTax. Depending on your specific circumstances, this may include a tax deduction and an expedited tax refund, which could make getting back on your feet post-disaster just a little bit easier. Here is what you need to know.
You may automatically get a tax extension
If you live in certain disaster areas specified by the IRS, then you may not have to worry about filing your taxes by the usual April 15 deadline.
For example, “the roughly 10 million taxpayers who live in Los Angeles County have an extension until Oct. 15 to file and pay to help those recovering from the recent wildfires,” and “they also can delay paying quarterly estimated taxes,” said The Wall Street Journal. Additionally, taxpayers in parts of Virginia, Florida and Tennessee, and “all of” Alabama, North Carolina and South Carolina have until May 1 to file due to Hurricane Milton and Hurricane Helene, said TaxSlayer.
Alongside individuals, these extensions also apply “to business owners, sole proprietors and business entities,” as well as those whose “tax preparer lives in the disaster area […] even if you live outside the area,” said TaxSlayer.
You can check the IRS website to see if your area is eligible, in which case these extensions will automatically apply. Even if you do not live in the designated areas but were still impacted, you may be able to secure a later deadline if you contact the IRS.
You could qualify for disaster deductions
Another perk you may have access to is a tax deduction for any disaster damage you faced. However, “from 2018 to 2025, individuals can deduct losses only for federally declared disasters” — so “if your house is damaged or destroyed in a storm or fire that doesn’t receive a federal designation, you can’t take the deduction,” said U.S. News & World Report.
For those who are eligible, these casualty losses can “be deducted even if you take the Standard Deduction rather than itemizing your deductions,” said Intuit TurboTax. The amount of the loss you can claim, per IRS rules, is generally the “lesser of the cost basis of the property (which is usually what you paid for the house plus the cost of home improvements) or the drop in fair market value of your property because of the disaster,” said U.S. News & World Report.
You might get your tax refund faster
One last silver lining come tax season is that “individual taxpayers and businesses in a federally declared disaster area can claim losses related to the disaster on their tax returns for the previous year and receive their refund in a shorter amount of time,” said TaxSlayer. To do this, you will typically need to file an amended tax return.