Katrina Relief Workers Have
Until Jan. 3 to File and Pay Taxes

IRS and Tax NEWS

Courtesy of IRS

IR-2005-103 September 14, 2005

WASHINGTON — Hurricane Katrina relief workers have until Jan. 3, 2006 to file any returns and pay any taxes due, according to the Internal Revenue Service.

In general, this means that relief workers are entitled to the same extensions that apply to individuals and businesses located in the disaster area. Eligible relief workers should notify the IRS that they are affected by Katrina when they file returns or respond to notices or contacts from the tax agency.

Eligible relief workers are those assisting in the disaster area. This includes people affiliated with recognized government or philanthropic organizations and others.

Relief workers can get the extensions by marking the top of appropriate forms with "Hurricane Katrina" written in red ink. They can also alert the IRS by calling the toll-free disaster hotline at 1-866-562-5227.

[TaxMama note: This was the funniest thing! I was just talking to the Press Liaison at the Treasury Department asking if there would be any legislation offering concessions to the volunteers and relief workers, when this notice came from IRS! Now, they've started reading my mind.]

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Retirement Plans Can Make Loans, Hardship Distributions
to Katrina Victims

IR-2005-105 September 15, 2005

WASHINGTON – 401(k) s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Katrina and members of their families, the Internal Revenue Service announced today.

For the first time ever, the IRS and the Departments of the Treasury and Labor are providing broad-based relief to retirement plan participants affected by a major disaster.

401(k) plan participants, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with certain 457 deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.

Retirement plans can provide this relief to employees and certain members of their families who live or work in the disaster area. To qualify for this relief, hardship withdrawals must be made by March 31, 2006.

For more details, please read this PDF.

MILEAGE RATE INCREASE

Rates will increase for the period
September 1, 2005 through December 31, 2005.

Standard Mileage Rates
	Jan 1-Aug. 31,2005	Sept 1-Dec. 31, 2005
Business	$0.405 per mile	$0.485 per mile
Medical	$0.15	$0.22
Moving	$0.15	$0.22
Charity	$0.14	$0.14