Wednesday, October 10, 2018
Eric Smith, an IRS spokesman, said that amid natural disasters, the IRS often grants tax relief to affected residents, based on the Federal Emergency Management Agency’s declarations. As Hurricane Michael makes landfall so close to the extended deadline of October 15 to file their 2017 taxes, the deadline could be extended further or those that are affected by the storm. Last month, the IRS granted relief to those affected by Hurricane Florence and extended the deadline.
Be aware that the Tax Cuts and Jobs Act, the tax overhaul that went into effect this year, has changed the way you can claim personal casualty and theft losses. Prior to the Act, total of losses needed to exceed 10% of your adjusted gross income and could be duty to natural disasters, fires, thefts, etc. Now, casualty losses can only be claimed on your taxes in the case of a federally declared disaster, and is still subject to the 10% threshold.
Under both the old and new tax law, how much you can claim as a loss will be reduced based on the insurance payout you receive for your damages.
See Darla Mercado, How Hurricane Michael Might Affect Your Taxes, CNBC, October 10, 2018.