Disaster Recovery

We are posting this page of information to assist you in your recovery from "Ike" damage loss you and your family might have incurred during the recent storm.

FEMA assistance is not taxable. Texas Governor's Division of Emergency  Management and the Federal Emergency Management Agency (FEMA) have awarded millions of dollars in housing assistance and other needs assistance for items such as personal property, medical care and transportation.  These payments are not considered additional income for Social Security or IRS purposes.  Grants do not affect eligibility for Medicaid, welfare assistance, food stamps or Aid to Families with Dependent Children.

On September 18, the IRS made the announcement that those Taxpayers who were adversely affected by Hurricane Ike qualified for tax relief from the Internal Revenue Service, including the postponement of tax filing and payment deadlines until January 5, 2009, if you reside or have a business within the "disaster area".  The disaster area includes Harris, Montgomery, and Waller counties.  Most of our clients reside and/or have businesses within the disaster area.

Specifically, the relief postpones until January 5, 2009 the deadlines for filing any federal tax return due September 15th or October 15th.  Your individual, partnership, trust, or corporate return, is now due by January 5, 2009.

If you make estimated tax payments on a  quarterly basis and you did not make your 3rd quarter estimated payment by September 15th, you now have until January 5, 2009 to make that payment.

This postponement does not apply to any employment taxes that may be due.

Affected taxpayers in a presidentially declared disaster have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming 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 savings, this would of course depend on income factors.  If you are an existing client of ours, please e-mail or call us, we will do our best to help you to make the right choice of whether to amended your return for 2007 or wait for the filing of tax year 2008 return.  If you are on extension for tax year 2007, please discuss this issue with Sue Watkins before you bring your information to the office for preparation of your 2007 return.

HOW TO PREPARE FOR THE FILING OF CASUALTY LOSSES: complete a list of personal and non-real estate items lost; get insurance reimbursement documentation if applicable; FEMA reimbursement documentation if applicable; all SBA appraisals if applicable: the fair market value of your home and real estate before the casualty; any contractor estimates and repairs or replacement costs to the damaged property; and if you have already filed a return for 2007 and claimed standard deductions then you will also need the following items--real property tax payments for 2007, home mortgage interest, charitable contributions, reimbursed employee expenses, and out of pocket medical expenses.  Go to the www.irs.gov and download Publication 584 for a workbook to assist you in preparing this information for personal-use-property Publication 584B for business casualty.

Make a list of everything you owned and lost, determine its original cost (or adjusted cost), determine the fair market value of each item (this is the amount it could have been sold for just before the disaster) and determine the present value (after the disaster).  If you lost the original documents of your home, car or other property, we will advise you how to reconstruct your records.

You need to know the amount of your losses. It is worth the effort you make to compile this information. Make a list of each item lost, damaged or destroyed property.  In many cases the cost of cleaning up or making repairs, or appraisals in obtaining a federal loan will help in establish the decrease in fair market value of your property. 

Links for disaster relief assistance:

www.irs.gov  use the keyword "disaster
www.fema.gov for the Federal Emergency Manangement Agency
www.sba.gov/services/disasterassistance this site will assist you in applying for a disaster loan online.  The SBA Disaster Loan Program is the primary source of money from the Federal government for long-term recovery assistance. For damage to private property owned by individuals, families and businesses not fully covered by insurance, the basic form of Federal assistance is low-interest, long-termed disaster loans from the SBA.  Most people cannot afford to pay for expensive disaster repairs out of pocket, SBA disaster loans make recovery possible for the majority of borrowers.

In a disaster declared by the President, all disaster victims should register with FEMA by calling (800) 621-3362 or go online to the FEMA website before applying with the SBA for disaster assistance, however, if you are needing a SBA loan for a business go directly to SBA  without applying first with FEMA.  Business owners have two types of loans to choose from: a Physical Disaster Loan or an Economic Injury Disaster Loan

Texas Workforce Commission (TWC) Hurrican Disaster Aid is available, workers affected by Hurricane Ike have until Wednesday, October 15, 2008 to apply for Disaster Unemployment Assistance (DUA).  The TWC announced that as a result of Presidential Disaster Declaration FEMA-1791-DR, TWC is accepting applications for DUA from individuals whose employment or self-employment was lost or interrupted due to Hurricane Ike.

To file for disaster related unemployment assistance, individuals may log on to http://www.texasforce.org. or call the nearest TWC office Monday thru Friday, 8a to 5pm.  The Houston office number is (281) 983-1100

DUA is available to individuals who:
    > worked or were self-employed and can no longer work or perform services because of physical damage or destruction to
        the place of employement as a direct results of the disaster. 

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