09/23/2025
THE SEMI SILVER LINING OF THE AUGUST FLOOD
According to the IRS, residents and business owners in three Milwaukee, Waukesha and Washington counties now have until Feb. 2, 2026, to file various federal tax returns and make tax payments.
The Feb. 2, 2026, filing deadline applies to:
• Any individual, business, or tax-exempt organization that has a valid extension to file their 2024 return due to run out on Oct. 15, 2025.
• Quarterly estimated income tax payments normally due on Sept. 15, 2025, and Jan. 15, 2026.
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2025, and Jan. 31, 2026.
• Calendar-year partnerships and S corporations whose 2024 extensions run out on Sept. 15, 2025.
• Calendar-year corporations whose 2024 extensions run out on Oct. 15, 2025.
• Calendar-year tax exempt organizations whose extensions run out on Nov. 17, 2025.
Casualty losses
• Affected taxpayers in Milwaukee, Waukesha and Washington have the option of claiming disaster-related casualty losses on their federal income tax return for either the year in which the event occurred (the 2025 return normally filed next year) or the prior year (the 2024 return filed this year). Taxpayers have extra time—up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file)—to make the election. For individual taxpayers, this means Oct. 15, 2026.
• Individuals may deduct personal property losses that aren’t covered by insurance or other reimbursements.
Qualified disaster losses
• In federally declared disaster situations, specifically those deemed "qualified disaster losses," special rules apply. For these losses, the 10% of Adjusted Gross Income (AGI) reduction is waived, and you can add the loss to your standard deduction, meaning you don't have to itemize to claim it
• Affected taxpayers in Milwaukee, Waukesha and Washington counties claiming the disaster loss on their return should put the FEMA disaster declaration number, 4892-DR, on any return.
Payment agreements
• For taxpayers in an existing installment agreement or payment plan, reminder notices will continue to be issued, and direct debits will continue. Missed payments won’t cause an agreement to default during the postponement period.
• This means that an agreement will remain in effect, even if no installment agreement payments are made until Feb. 2, 2026. However, the usual interest and late-payment penalty charges will continue to accrue during this period.
• Taxpayers who wish to suspend direct debit payments should contact IRS Special Services toll-free number at (866) 562-5227.
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Additional Information
• Qualified disaster relief payments are generally excluded from gross income. This means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living, or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. You can exclude this amount only to the extent any expense it pays isn’t paid for by insurance
• Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement. For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and that the taxpayer may take into income over three years.
If you or your friends and neighbors were financially impacted by the August floods please have them contact Tax Management LLC 414803-3164 to ensure that the obtain the tax benefits afforded to taxpayers impacted by Federal Disasters.
