I want to open the floor up to you for a moment.
With everything you’ve heard so far about the One Big Beautiful Bill Act (OBBBA), what questions do you have? Confusion about credits? Changes to deductions? How it might impact your refund next year? (Or maybe, all of the above?)
Whatever it is, I want to talk through it with you – that’s what I’m here for. Here’s a quick link to grab a time on my calendar: 414-325-2040. I’m already in conversation with a few of my Milwaukee clients about these topics. And just so you know, I’ll be unpacking more of OBBBA’s key details in the coming weeks (especially the ones that hit home for you).
But for now, a hopeful update: the number of missing persons from the flooding in Kerr County, Texas, was revised down to three.
I’m sure you saw the headlines: Over the July 4 weekend, torrential rains led to widespread devastation across the state. The Guadalupe River surged, swallowing homes and roads, and at least 135 people tragically lost their lives.
Up until now, the process for getting IRS relief in disaster situations like this hasn’t exactly been quick. But there’s a bill currently awaiting the president’s signature that’s aiming to change that: the Filing Relief for Natural Disaster Act.
Here’s what it’s all about (and how it could affect you or someone you care about)…
IRS Disaster Relief Just Got Faster for Milwaukee Taxpayers
“By perseverance the snail reached the ark.” —Charles Spurgeon
AI Answers: IRS Disaster Relief 2025
- The IRS can now grant tax relief faster if your state declares a disaster (no more waiting on federal approval).
- Tax deadlines can be delayed immediately after a qualifying event, like a flood or wildfire.
- Relief workers and affected individuals now get up to 120 days (not just 60) of automatic extension in federally declared disaster zones.
- Prepare a disaster tax kit and subscribe to IRS/state alert systems now.
Hey. I want to check in with you.
If you—or someone close to you—have been caught up in the disasters that have hit different parts of the country lately, I hope you’re hanging in there.
When a major disaster hits—whether it’s a flood, a fire, or a freak storm—it can leave you scrambling just to get through the day. Everything feels uncertain. And honestly, it’s a lot.
I know tax stuff probably isn’t the first thing on your mind in the middle of that kind of chaos. But I also don’t want you to miss out on some help that might actually take a bit of the weight off.
There’s a new piece of legislation making its way through Congress right now that could really change how disaster tax relief works – in a good way.
It’s a bipartisan bill that was passed unanimously by both the House and Senate (a feat in these divided times). This bill could make it easier to get the relief you desperately need access to when disaster strikes.
Let me walk you through what’s going on—and why it might matter to you, whether you’re directly affected or just want to be prepared.
What Changed with IRS Disaster Relief?
So, here’s the short version:
Until now, if your state got slammed by a hurricane, flood, tornado, or fire, the IRS couldn’t offer any tax deadline extensions unless the federal government officially declared the area a disaster zone.
That process can be slow… and it’s left a lot of people confused, anxious, and risking penalties during crises of the past.
Under the new bill H.R. 517, the IRS can make decisions based on state-declared disasters — a much faster process than waiting on the federal stamp of approval. The governor (or equivalent authority in D.C. or U.S. territories) can now send a written request to the IRS, and affected taxpayers can get federal tax relief without waiting for a federal stamp.
Here’s the technical meat of it:
- The Secretary of the Treasury (and by extension, the IRS) can postpone federal tax deadlines based on state-level disaster declarations. Think deadlines like Form 1040 filing, estimated payments, payroll deposits, SEP IRA deadlines, etc.
- The rule applies to any “qualified state-declared disaster.” Meaning anything severe enough that it warrants a postponement: wildfire, flood, tornado, etc.
- Applies to individuals, businesses, and relief workers whose principal residence, business, or tax records are located in the declared area.
- And if you’re injured, serving as a relief worker, or your home/business is in the federally declared disaster area? You now get a 120-day (instead of 60) automatic extension to file and pay.
Why Does This Matter (Even If You’ve Never Faced a Disaster)?
We never expect a disaster. And in the aftermath, paying taxes isn’t a front-and-center priority. But the reality is, the financial aftermath can follow you long after the chaos has settled.
That’s why this new bill is such a big deal. It closes a long-standing gap by allowing the IRS to grant tax relief based on state disaster declarations, not just federal ones.
That means faster support when you need it most.
It also helps protect your finances. Because late-filing penalties can pile up quickly. But this change gives you more time to focus on urgent needs, like temporary housing, repairs, and insurance. And it ensures fairer treatment across the board (including for people in U.S. territories) so more Americans can access timely relief.
Your IRS Disaster Relief Action Steps
BEFORE a disaster happens, there are two big proactive things I tell my Southeastern Wisconsin clients to do:
1. Create a “Disaster Tax Kit” including:
- Copies of past tax returns: digital is fine, and cloud storage is ideal (but if you do print them, keep them in a water-/fireproof box)
- W-2s, 1099s, property tax records, mortgage info
- Contact info for your tax pro, insurance agent, and financial advisor
- Inventory of belongings (photos/video work wonders for insurance and tax casualty loss claims)
2. Subscribe to FEMA Emails and State Alerts:
- Subscribe to the Federal Emergency Management Agency (FEMA) bulletin.
- Do the same with your state’s tax authority.
And If You Are Affected by a Disaster:
- Check whether your area has been declared an emergency by your state.
- Look up IRS updates. They typically post relief notices for affected zip codes within 24–72 hours of a disaster declaration.
- Call your favorite tax pro. We’ll help confirm deadlines, coordinate record recovery, and evaluate potential casualty loss deductions.
- Document everything: take photos, save receipts, and make notes about dates and impact.
- Remember the 120-day extension if you’re injured, a relief worker, or if your home/business is in the zone.
FAQ
“If my area gets a state-declared disaster, do I automatically get an IRS extension?”
Not automatically. The governor in your state must formally request relief from the IRS in writing. Once granted, the IRS will publish a notice listing affected zip codes and the new deadlines.
“What kinds of deadlines can be extended under the Filing Relief for Natural Disasters Act?”
The IRS can delay: filing returns (1040, 1120, etc.), paying taxes, making estimated tax payments, contributing to IRAs/SEP plans, and even IRS enforcement actions (like collections). Basically, anything time-sensitive.
“I’m a relief worker. Do I need to prove it to qualify for the 120-day extension?”
Yes. The IRS typically requires verification of your status (e.g., credentials, agency assignment, etc.) and that you were working in a qualified disaster zone. Keep your deployment records and communications.
“Will my state extend deadlines too?”
Possibly. Many states mirror the IRS in disaster scenarios, but not all. You’ll need to check your state’s Department of Revenue site (or ask us to confirm for you).
“Can I deduct property losses from a disaster on my taxes?”
Yes, if the loss occurred in a federally declared disaster zone, you may be able to claim a casualty loss on your federal return — even if you don’t itemize. But documentation is key here. We’re glad to help you figure out the details.
Next Steps
While this legislation isn’t law yet, it’s very close (as of this writing). And as with any new tax law, there will be plenty of technical details, exceptions, and nuances to sort through. That’s where we come in.
Whether you’ve been impacted by a disaster recently or just want to make sure you’re prepared, we can help you figure out what this change means for you. Now, and down the road:
414-325-2040
Preparing you for whatever comes,
Jon Neal