Good news for many Wisconsin Taxpayers who suffered losses due to the severe storms, tornadoes, straight-line winds, flooding and landslides that took place mid-August 2018. The President has declared a major disaster exists in the State of Wisconsin such that affected individuals and businesses may be eligible for tax relief. The Wisconsin Department of Revenue also indicated state tax relief will also be granted.
Individuals who reside or have a business located in Crawford, Dane, Juneau, La Crosse, Monroe, Richland, Sauk and Vernon counties may qualify for tax relief.
Types of Relief
Postponement of Tax deadlines (more time to file and pay)
Certain tax return or tax payment deadlines falling on or after Aug. 17, 2018 and before Dec. 17, 2018, are granted additional time to file through Dec. 17, 2018. This includes taxpayers who had a valid extension to file their 2017 return due to run out on Oct. 15, 2018. It also includes the quarterly estimated income tax payments due on Sept. 17, 2018 and the quarterly payroll and excise tax returns normally due on Oct. 31, 2018. It also includes tax-exempt organizations that operate on a calendar-year basis and had an automatic extension due to run out on Nov. 15, 2018. Affected taxpayers that are granted an extension by the IRS are automatically granted a similar extension by Wisconsin for income and franchise tax.
In addition IRS penalties on payroll and excise deposits will be abated if deposits were made by Sept 3, 2018. Affected taxpayers may request a 30 day extension for Wisconsin sales/use, withholding and excise deposits by submitting a written request to the WDR.
Affected taxpayers who reside or operate a business in the covered disaster area counties will be automatically identified. If an affected taxpayer does receive a penalty notice or is outside of the covered area they must call the IRS disaster hotline (866-562-5227) to request tax relief.
Deductibility of Casualty Losses (may deduct on 2018 return or on amended 2017)
Affected taxpayers have the option of claiming disaster-related casualty losses on their federal income tax return for either the year in which the event occurred, or the prior year. See IRS Publication 547 for details.
Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. See Form 4684, Casualties and Thefts for details.
Affected taxpayers claiming the disaster loss on a 2017 return should put the Disaster Designation, “Wisconsin, Severe Storms” at the top of the form.
The IRS will waive fees and expedite request for copies of tax returns or request of tax transcripts.
Other affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster has impacted them so the IRS can provide consideration to their case.
Please contact us if we can help you determine if you qualify for tax relief or in the event you need help obtaining a waiver under these disaster relief provisions.
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About the Author
Kent Collier, CPA is a senior accountant in Wegner CPAs’ Tax and Business Services Department. He joined Wegner CPAs in 2013 after earning his undergraduate and graduate degrees in accounting from the University of Wisconsin–Whitewater. He has worked with a number of individual and business clients providing them with a variety of tax and accounting services.