New York and New Jersey legislators seeking government tax help

March 01, 2013 (Press-News.org) Senators Chuck Schumer (D - New York) and Robert Menendez (D - New Jersey) have proposed federal tax relief measures to help local residents still reeling from the massive blow struck by "Superstorm"/Hurricane Sandy in fall of 2012.

The proposal

The bill, known as the "Hurricane Sandy and National Disaster Tax Relief Act of 2012," introduced in early December, would provide tax breaks to homeowners, small business proprietors and good Samaritans struggling to financially recover from what just might be the costliest natural disaster in American history. It would, among other things:
- Make the cost of all storm-related property repairs and cleaning expenses tax deductible
- Offer tax credits to business owners who kept their company payroll going despite the need for repairs or the fact that employees were unable to work
- Give tax credits, exemptions or deductions to good Samaritans who provided free or low-cost shelter to displaced relatives, friends or neighbors in the wake of the storm
- Waive penalties and fees for early withdrawal from IRA or 401k accounts when the money is used to replace lost income or make storm-related repairs

The tax breaks offered by the proposed legislation would be in addition to the more than $60 billion offered by President Obama to get the region back in full swing. It could mean thousands of dollars worth of tax aid for those worried about being able to finance repair expenses that weren't covered by insurance and wouldn't be affordable without a steady income (something many small businesses could not otherwise afford to pay, especially if business owners themselves - or the customers/vendors that fuel the businesses - are facing cleanup expenses of their own).

New York governor Andrew Cuomo and New Jersey governor Chris Christie are both lobbying for additional federal funds (in excess of President Obama's proposal) to fuel the much-needed cleanup of the biggest hub of commercial and cultural traffic in the country.

The practical effect

No matter whether any or all of the Schumer/Menendez legislation is actually enacted, it will still be a long road to full economic recovery for the region. Hope is not lost, though; current tax laws could still provide some relief in the form of deductions, exemptions or credits to those affected by the storm. For that reason, tax filings for this year and those in the foreseeable future need to be undertaken with due care and planned out meticulously.

If you have been affected by Hurricane Sandy, it is important not only to take any credits or deductions that could have an immediate impact on your tax obligation, but also to plan for the most economically viable way to proceed in the future to minimize long-term consequences as well. Consult an experienced tax planning attorney in your area to learn more about financial strategies that offer help now and for years down the road.

Article provided by Whitlock Canter LLC
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