As we bring 2018 to a close, here are a few updates from the IRS that you should know. Please contact Cray Kaiser if you have any specific questions or concerns.
Possible refund for vets injured in combat
Certain veterans injured in combat may be due a credit or refund as a result of the Combat-Injured Veterans Tax Fairness Act of 2016, according to the IRS.
This affects vets who received one-time, lump-sum disability severance payments when they separated from military service after January 17, 1991 and included those payments as income on their tax returns.
Vets should file an amended tax return, Form 1040X, to claim a credit or refund for overpayment related to their severance payments. Click here for more information.
Natural disaster tax relief
If you suffered uninsured or unreimbursed losses as a result of Hurricane Florence or other federally declared natural disasters in 2018, you may be able to claim losses on your tax return.
Individuals and businesses in federally declared disaster areas can choose to claim losses on either the return for the year the loss occurred or the return for the prior year.
You may not need to live in a federally declared natural disaster area to qualify for relief. You’re considered “affected” if the records you need to meet a filing or payment deadline during a postponement period are located in the disaster area. Click here for more information.
No change to fourth-quarter interest rates
Overpayments are 5% for individuals and 4% for corporations. Corporate overpayments exceeding $10,000 have a 2.5% interest rate. The rate charged on underpayments is 5%. And large corporate underpayments are charged 7%.
Please contact us if you have any questions.