Tax Relief - After the Disaster Hits Your Small Business

If your business suffered disaster losses this year, the last thing you want is to have to pay more taxes on top of the other expenses you must incur. The IRS has put some measures in place to help small businesses hit by disasters, so that they don't incur additional tax liability and penalties in addition to their other losses. Here are some things you should know, if your business has been damaged or destroyed as a result of a disaster:

• You may want to file an amended tax return take advantage of section 3082(a) of the Housing and Economic Recovery Act of 2008, if you received a recovery grant. The amended return option allows you to show any reimbursement grant you might have received as reimbursement for expenses. This may lower your taxable income and prevent any tax penalties. Read Notice 2008-95 for more information and consult your tax advisor before you file. If you plan to take advantage of this opportunity to amend your return, the IRS advises:
  

  Taxpayers should write the words, “Hurricane Grant Relief” in dark, bold letters at the top of their amended return, Form 1040X, and mail it to: Internal Revenue Service Center, Austin, TX 73301-0255. Amended returns cannot be filed electronically.

  
  
• Also from the IRS Newsroom, you can search for specific information on IRS assistance for disasters in your state on the IRS Around the Nation page. For example, if you suffered losses from hurricanes in Texas, you can go to the "Texas" page and see what assistance is available.
  
  
• The IRS is postponing until Jan. 5, 2009, filing and payment deadlines for Louisiana and Texas taxpayers affected by Hurricane Ike and victims of Hurricane Gustav in Louisiana and Mississippi. It wasn't clear to me what "filing and payment deadlines" they were referring to, but I'm guessing they were talking about end-of-quarter filings for employment taxes and unemployment insurance taxes.