Tax benefits for federally-declared disasters

Tax advantages for federally-declared disasters (TV-PG; 3:35)

CPA and TurboTax skilled Lisa Greene-Lewis provides sources and tax ideas for these affected by pure disasters.

Read the transcript under or watch the video above.

Video transcript:

Tracy Byrnes: So somebody made Mother Nature very sad this latest yr as a result of each time you flip round, there appears to be one other pure catastrophe taking place. And due to this fact, somebody’s getting at the very least an extension or some break on their tax return. Lisa Greene-Lewis, TurboTax skilled and CPA is right here with us proper now. I imply, there are lots of federally declared disasters this yr, aren’t there?

Lisa Greene-Lewis: Yes, there have been all the things from fires to floods, storms. So sure, there are. And there are issues that folks ought to know so far as saving cash and getting reduction on submitting their taxes.

Tracy Byrnes: So the place’s the primary place it is best to go? Like if I imagine that I used to be — I imply, I might guess folks know whether or not in a federally declared catastrophe zone. But if they do not, the place’s the primary place they need to go to at the very least get that data?

Lisa Greene-Lewis: The IRS, they do have a catastrophe reduction web page that you would be able to go to. And then additionally on the TurboTax weblog, we’re consistently updating data as that sort of reduction is available in. So you possibly can head there as effectively.

Tracy Byrnes: So as soon as I determine that I’m in a federally catastrophe declared zone, what are a few of the issues I must find out about? I imply, casualty losses abound if you’re a part of a catastrophe.

Lisa Greene-Lewis: The very first thing it’s good to know, the IRS, they usually difficulty reduction. So that may be reduction within the type of supplying you with further time to pay what you — should you owe taxes and in addition file your taxes. So we noticed lots of that this yr with all the storms. There was reduction in numerous totally different dates the place folks had been capable of lengthen with out submitting a tax extension.

So a few of these dates — it is best to have a look at your particular state, however lots of them had been extending the tax yr 2022 deadline to July, some in September, and a few in October.

Tracy Byrnes: I feel that is the essential factor, determine your deadlines most significantly. Some folks, sadly, won’t even have paperwork left. So that is an entire different can of worms. But the entire casualty loss difficulty, do I take it this yr or do I take it subsequent yr? What do I must find out about that?

Lisa Greene-Lewis: So lots of people do not understand that there’s a chance. So as an example, for instance, a catastrophe sadly occurs on this yr, 2023, however we’re not submitting our taxes but for 2023. You can amend your tax yr 2022 taxes and declare the casualty loss on there. So that is one factor that lots of people are unaware of. Or in order for you, you possibly can simply wait till we’re submitting tax yr 2023 taxes.

Tracy Byrnes: So I suppose it relies on how rapidly you want the cash, and if you wish to return and amend and you’ve got that functionality. Look, I feel the large takeaway right here is in case you are in a federally declared space, it is best to go both on to the IRS’s web site or TurboTax web site, determine the profit you get from it, and make the most of it as a result of it definitely was a hardship. Lisa Greene-Lewis, TurboTax skilled and CPA. Thank you for sharing that.

Lisa Greene-Lewis: Thank you for having me.

Editor’s Note: The content material was reviewed for tax accuracy by a TurboTax CPA skilled for the 2022 tax yr.