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IRS Extends Tax Relief to Victims of Hurricane Michael by Jeffrey M. Mutnik, CPA/PFS

Posted on October 19, 2018 by Jeffrey Mutnik

Individuals who reside or own businesses in certain regions of Florida and Georgia, which the president declared as disaster areas following the October 7 landfall of Hurricane Michael, may qualify for various forms of tax relief from the Internal Revenue Services. The designated disaster areas in Florida are Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Holmes, Jackson, Jefferson, Leon, Liberty, Madison, Suwannee, Taylor, Wakulla and Washington counties. In Georgia, the relief extends to taxpayers in Baker, Bleckley, Burke, Calhoun, Colquitt, Crisp, Decatur, Dodge, Dooly, Dougherty, Early, Emanuel, Grady, Houston, Jefferson, Jenkins, Johnson, Laurens, Lee, Macon, Miller, Mitchell, Pulaski, Seminole, Sumter, Terrell, Thomas, Treutlen, Turner, Wilcox, and Worth counties.

As recovery efforts continue, it is crucial that taxpayers keep in touch with their accountants and pay attention to announcements from local and federal agencies, which may extend tax relief to other counties affected by the storm.

Tax Deadline Extensions

Affected taxpayers will have until Feb. 28, 2019, to meet all of the tax-filing and payment obligations that had original deadlines beginning on Oct. 7, 2018, including the extended filing of 2017 tax returns, normally due on October 15 and quarterly estimated income tax payments that are usually due on Jan. 15, 2019. The extension also applies to quarterly payroll and excise tax returns typically due on Oct. 31, 2018, and Jan. 31, 2019, as well as the annual tax returns of tax-exempt organizations that operate on a calendar-year basis that had an automatic extension due on Nov. 15, 2018. In addition, the IRS has granted penalty relief to qualifying businesses that had payroll and excise tax deposit obligation on or after Oct. 7, 2018, as long those companies make the deposits by Oct. 22, 2018.

 

Most taxpayers do not need to contact the IRS to receive the postponement of time to meet their tax obligations. The IRS automatically applies filing and payment relief to those individuals and businesses it identifies as being located the covered disaster areas. This relief is also granted to volunteers and other workers who travel to the covered areas to provide aid as part of an organized government or philanthropic organization.

Casualty Losses

Taxpayers who live or own businesses in federally declared disaster areas have the option to claim casualty losses resulting from Hurricane Michael on their 2018 or 2017 tax returns. Taxpayers who already filed their 2017 tax returns may choose to file an amended return for that year, especially when considering that deducting losses in 2017, when tax rates were higher, could yield a much larger tax break than if used those losses to offset income in 2018 when tax rates are lower and taxable income may be lower due to the disaster anyway. If taxpayers are party to a partnership or joint venture located or operating in the disaster area, they too should communicate with their partners to consider the benefits of amending their 2017 income tax returns as well.

Other Relief

Taxpayers who must rebuild and/or repair storm-damaged property may be able to deduct some of these expenses under the tangible property regulations. In addition, taxpayers whose losses from the storm include their prior year tax returns may receive copies free of charge as long as they complete and submit to the IRS Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, with the words “Florida Hurricane Michael” written in red ink at the top of those forms.

About the Author: Jeffrey M. Mutnik, CPA/PFS, is a director of Taxation and Financial Services with Berkowitz Pollack Brant Advisors and Accountants, where he provides tax- and estate-planning counsel to high-net-worth families, closely held businesses and professional services firms. He can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at info@bpbcpa.com.

Information contained in this article is subject to change based on further interpretation of tax laws and subsequent guidance issued by the Internal Revenue Service.

 

It’s Time for a Free Credit Freeze to Fight Identity Theft by Joseph L. Saka, CPA/PFS

Posted on October 18, 2018 by Joseph Saka

Under a new law, consumers can finally freeze their credit files and protect themselves from the increasing frequency of identity theft without reaching into their pockets to pay a fee.

As of Sept. 21, 2018, all three of the major credit reporting bureaus, including Equifax, Experian and TransUnion, have made credit freezes free for all consumers in all U.S. states. In addition, the new law also allows parents to freeze the credit of their children under age 16 without any costs to them. Previously, consumers were required to pay as much as $10 to each reporting agency every time they froze or thawed their credit histories.

According to security experts, a credit freeze is the best way to prevent criminals from stealing your identity and using that information to fraudulently secure loans or open financial accounts in your name. It alerts the credit bureaus to keep your personal information private and block anyone from running a credit check on you without first receiving your approval, which can only be accomplished by a credit “thaw” that you authorize via a personal identification number (PIN).

Data breaches and identity theft have become all-too-common occurrences of everyday life. Even some of the most admired and well-known brands, including Amazon, Target, Verizon  and most recently Facebook, have fallen victim to attacks that exposed the personal information of millions of consumers. No one is safe. Even Equifax experienced a breach in 2017 that impacted more than 145 million people.

The fastest way to freeze your credit account is to separately contact each of the three reporting bureaus by telephone or by visiting their websites:

  • Equifax: 800-685-1111, 888-298-0045 or https://www.equifax.com
  • Experian: 888-397-3742 or https://www.experian.com
  • TransUnion: 888-909-8872 or https://www.transunion.com

Each agency will provide you with a PIN that can you can use to lift a freeze when legitimate financial institutions need access to your credit history in order to extend a loan or line of credit to you. After thawing your account, you may again contact each of the reporting agencies to reinstate the credit freeze.

It is important to note that credit freezes cannot protect you from all forms of identity theft and fraud, including unauthorized credit card transactions. Instead, consumers should carefully review their monthly credit card statements to flag suspicious charges. In addition, they may request that their financial institutions send them alerts them when credit card charges exceed a certain amount or they are processed over the phone or online. As an added layer of protection, you can set up free fraud alerts that require the credit bureaus to contact you and receive your approval to release your credit file anytime a company or financial institution requests that information. Fraud alerts can be established for one year with all three credit bureaus by contacting just one of the reporting agencies.

As a final layer of protection, consumers should check their credit reports throughout the year by visiting www.annualcreditreport.com. By law, you are entitled to receive one free credit report every year from each of the three credit bureaus. Once you receive a report, review it carefully looking for any activity that is out of the ordinary and confirming that it includes only those credit cards or loans of which you are aware and for which you applied.

About the author: Joseph L. Saka, CPA/PFS, is CEO of Berkowitz Pollack Brant, where he provides a full range of income and estate planning, tax and business consulting and compliance services, and financial planning expertise to entrepreneurs, high-net-worth families and family companies and business executives in the U.S. and abroad. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or via e-mail at info@bpbcpa.com.

 

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