Hurricane Ida Update – Extensions and Casualty Deductions

For payroll tax payments, at this time it is unclear whether or not that new deadline is Jan. 3rd, 2022, or Sept. 10th, 2021. The notice states that late payment penalties would be abated if deposited by September 10th. Historically, these dates have been the same. It is unknown why payroll taxes were only extended 2 weeks. We know that the IRS/Government seem to always publish things that can be taken several different ways. We will continue to monitor this until we have a clear answer.

Here is a link to the IRS Notice LA-2021-04 with details of the extended dates if you would like to read them.

For those of you who have experienced damage due to the hurricane, please see below:

Casualty Loss Deductions

A casualty loss is calculated by subtracting any insurance or other reimbursement received or expected from the smaller of the decrease in fair market value (FMV) of the property as a result of the casualty or the adjusted basis in the property before the event.

For example, if you had a boat that you purchased for $35,000, but the current value of the boat on August 29th was $20,000 and it was a total loss, you would have a casualty loss of $20,000. But let us say the insurance company gave you $17,000 for the loss of the boat, then your casualty loss would be reduced to $3,000. This is a very simple illustration; in most cases it will be more complicated.

This link will give you a very thorough list of items and categories that maybe you would have overlooked in compiling your casualty loss. I found it quite helpful for clients in Hurricane Katrina. IRS Publication 584.