It has been a particularly devastating season for hurricanes across North America and beyond. People living everywhere from Puerto Rico and the Caribbean to Texas and Florida are just beginning to deal with the devastation brought to their lives, belongings and careers. Luckily, victims and survivors of recent hurricanes will have tax breaks available to them. These will help them lessen the financial burden of recovering from the event. Here are some of the most important tax breaks for hurricane victims that you should know about.
Under the new hurricane relief laws, the usual 10 percent early withdrawal penalty tax does not apply to hurricane victims. In fact, victims who lost their home due to hurricane damage can withdraw money from their IRA without any tax penalty between September 4, 2017 and December 31, 2018.
As an employer affected by the hurricane, you can receive tax credits for each employee. The law stipulates that a tax credit of 40 percent of wages will be provided to employers, with a $6,000 tax credit limit per employee. To qualify for employer tax credits, you must employ people at a business located in a core disaster area.
With the new hurricane relief laws in place, victims of the recent hurricanes can deduct their losses from their income taxes. However, victims can only deduct those losses if they exceed 10 percent of the household’s adjusted gross income. The new law eliminates the stipulation that individuals must itemize their deductions in order to receive the benefits. Victims of the hurricane can take advantage of the deductions available to them, whether they itemize or not.
People can usually deduct up to 50 percent of their income in charitable deductions from their taxes. Post-hurricane, the laws have changed. There is no limit to the amount that can be written off for charitable deductions. This rule change encourages people to give as much money as possible to help those affected by the devastating hurricanes. The IRS rewards good samaritans as one of its many tax breaks for hurricane victims.
If you experienced catastrophic damage to your home or business during a recent hurricane, consider what tax breaks might be available to help. Rebuilding your home can be a daunting challenge, but taking advantage of all available assistance can help alleviate the burden.
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