Filing Deadlines

• If you are a victim of a federal disaster, such as the 2011 floods around the country, you are given automatic tax filing extensions. For example, the IRS waives the failure-to-deposit penalties for businesses who must deposit excise or employment taxes by a specified date. The extensions typically last until the beginning of the quarter following the disaster. For individual taxpayers or corporate filers, you may receive an extension for filing your tax return, depending on the date of the disaster. Estimated tax payment extensions are generally included in the relief as well. The IRS automatically identifies taxpayers in the affected zones and applies the filing and payment relief. If you receive a penalty notice, call the number on the notice to have the IRS abate any penalty or interest charges.
  
  

Travel Allowances

• If your business was affected by the disaster and you had to temporarily move it outside the zone of your usual "tax home," you and your employees may qualify for mileage reimbursement for the trek to and from work. If you reasonably expect to be in the new location for less than a year, this relocation is considered a temporary assignment and allows you to claim mileage expenses for travel to and from the business, lodging expenses and 50 percent of the cost of meals. However, if you intend to stay in the new location for more than a year, you will lose these tax benefits at the point that your reasonable expectation changed.
  
  

Casualty Losses

• Flooding can cause damage that may not be covered at all by your insurance and can also result in a total loss for your home. In addition, the fair market value of your home can decrease even if needed repairs are made, but the IRS only allows you to decrease the fair market value by the loss related to the physical damage to the property, not a general decline in property values. Your property basis can be adjusted accordingly. This is a complex calculation and you should consult a tax professional. The IRS also allows flood victims to deduct losses that are not reimbursed by disaster relief funds or insurance payments.
  
  

Expedited Refunds and Document Replacement

• You are allowed to amend your return from the year prior to the flood to claim the deductions you are allowed under the disaster relief program, or you can claim the deductions on the tax return filed for the tax year in which the flood occurred. The IRS notes that you may incur a greater tax benefit if you wait, but if you choose not to, the refund from the amended return will be expedited if you put the flood designation at the top of the return. Fees for copies of prior tax returns are also waived but you must note the disaster designation at the top of Form 4506 or 4506-T, in red. For example, a North Dakota resident would put North Dakota/Flooding in red ink at the top of the form or return.