The IRS has granted victims of the recent Colorado wildfires more time to file various individual and business tax returns and make tax payments. Specifically, victims of the fires that began on December 30, 2021, have until May 16, 2022, to file and pay tax returns and payments due between December 30 and May 15.
The tax relief is available to anyone in any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual assistance. At this point, only affected taxpayers who live or have a business in Boulder County qualify for the extensions, but the IRS will offer the same relief to any taxpayers in other Colorado localities designated by FEMA later.
The IRS will also work with other people who live outside the disaster area but whose tax records are in the disaster area. Call the IRS at 866-562-5227 if you face this situation. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Deadlines Extended
The deadlines that are pushed back include the April 18, 2022, due date for filing a 2021 personal income tax return and paying 2021 taxes, and various business returns normally due March 15 and April 18. Wildfire victims in the designated area will also have until May 16 to make 2021 IRA contributions.
Colorado wildfire victims will also get more time to make the quarterly estimated tax payments that are due on January 18 and April 18, 2022. This also means that impacted taxpayers who pay estimated taxes don't have to submit the fourth quarter payment for 2021 that's normally due January 18 and, instead, can simply include it with the 2021 tax return they file by May 16. In addition, farmers who would normally skip estimated payments and file their returns by March 1, 2022, can now wait until May 16 to file their 2021 return and pay any tax due.
The due date for quarterly payroll and excise tax returns normally due on January 31 and May 2, 2022, are extended to May 16 for Colorado wildfire victims, too. Penalties on payroll and excise tax deposits due from December 30 to January 13 will also be waived as long as the deposits were made by January 14, 2022.
Taxpayers don't need to contact the IRS to get this relief. However, if an affected person receives a late filing or late payment penalty notice from the IRS, he or she should call the number on the notice to have the penalty abated.
Deduction for Damaged or Lost Property
Victims of the Colorado wildfires may be able to claim a tax deduction for unreimbursed damaged or lost property. To do so, they typically must itemize and file Schedule A with their tax return. However, victims who claim the standard deduction may still be able to deduct their losses if they can claim them as business losses on Schedule C.
The deduction can be claimed on the tax return for the year the damage or loss of property occurred or for the previous year. So, for any wildfire destruction in 2021, the deduction can be claimed on either a 2020 tax year return or a 2021 return. In either case, you must write the FEMA declaration number on the return claiming the deduction. For the recent Colorado wildfires, the number is 4634DR.
If you decide to claim a deduction for 2020, you can amend your 2020 return by filing Form 1040X. For this purpose, you must file the amended return no later than six months after the due date for filing your return (without extensions) for the year in which the loss took place. So, for Colorado wildfire losses in 2021, you would need to file an amended 2020 return by October 17, 2022. Affected taxpayers claiming the disaster loss on a 2020 return should also put the Disaster Designation ("Colorado Wildfires") in bold letters at the top of the form. See IRS Publication 547 for details.
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears EbbConstructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility BillsIf passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
Ask the Editor, June 6: Questions on Hobby Losses, MedicareIn our latest Ask the Editor round-up, Joy Taylor, The Kiplinger Tax Letter Editor, answers questions on hobby losses, I bonds and Medicare premiums.
-
Homeschoolers Could Soon Save on Expenses With 529 PlansSavings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Ohio Announces Two-Week Sales Tax Holiday Amid Tariffs, High PricesState Tax Ohioans won't want to miss out on savings as pressure from tariffs spikes prices.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the SenateTax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
Ask the Editor, May 30: Questions on the One Big Beautiful BillAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the House-passed “One Big Beautiful Bill.”
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers QualifyTax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Ask the Editor, May 23: Reader Questions on Gifts, Estate TaxIn this week's Ask the Editor Q&A, we answer tax questions from readers on gifts, the estate tax and stepped-up basis upon death.
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
