2025 has been a hard year already, and it’s only mid-February. There’s one portion of that I want to address today.
But first, did you catch any of SNL’s 50-year anniversary special last weekend? I was a nerd in high school without a date or a party to go to, and I was a fan of George Carlin, so I stayed up to watch that first show. Laughter is a medicine we all need a spoonful of right now. Enjoy any of these SNL characters over the years?
I am flattered that many of my clients look forward to hearing a joke from me every tax season. I can also offer relief in another way: trustworthy financial advice.
Unfortunately, this week’s topic is not such a fun one to think about, but it’s a real one. Because it seems like a devastating hurricane or wildfire is ravaging someone’s hometown about every other week (or possibly your hometown).
And the uncomfortable part is, whether you’re hearing about these events on the news or experiencing them firsthand, it tends to make you feel rather *small*. Disasters of this magnitude can also make you feel powerless against the unexpected.
Because as much as you want to, you can’t white-knuckle your way around these situations. But that doesn’t make you powerless.
What matters more is how you get back up (or, in some cases, how you help others get back up).
So, I want to offer some helpful resources for doing just that:
- You can donate money or items to a disaster relief organization.
- You can give blood at a blood donation center.
- You can volunteer for on-the-ground help with relief efforts.
But if all you have capacity for is picking yourself back up, that’s completely valid too. My team and I are a support for you to lean on in times like these.
TaxMaster Financial Service Corporation’s
“Real World” Personal Strategy Note
Tax Deadlines For Natural Disaster Victims: What You Need to Know
“Prepare for the unknown by studying how others in the past have coped with the unforeseeable and the unpredictable.” – George S. Patton
If you were affected by one of the many natural disasters the past 12 months, I want to take a moment to recognize that what you’ve been through is no small thing.
Your life was turned upside down in an instant, and probably still feels (at least some level of) off-kilter – whether the disaster that affected you was many months ago or only a few short weeks ago. You can’t just slap on a Band-Aid and call it good. The road back to “normal” for you and your family is a long and difficult one, as you no doubt know very well.
And in the midst of the hard you’re facing, it’s completely understandable to overlook something like tax deadlines. Which is why I want to gently offer some guidance on this topic, to help make things at least a little easier for you where I can.
Abnormal tax deadlines
When a natural disaster strikes, the IRS is not unfeeling to your situation. They almost always offer extended tax deadlines for those living in federally declared disaster areas. You probably won’t get to taxes right away, but once you have the bandwidth for them, the first step is to check for extension updates from the IRS.
The extensions also apply to you if records you need to meet tax deadlines are located within the affected area, if you’re a relief worker in the disaster area, or even if you were hurt while vacationing there.
The below extended deadlines apply to you if you were affected by any of these major events:
– The California wildfires. If you live in Los Angeles County, you now have until October 15, 2025, to file and pay your personal income tax return (normally due April 15th). You can also make IRA and HSA contributions for 2024 until the new deadline of October 15th. If you’re a business owner, this includes certain estimated payments as well.
– Hurricane Helene. If you live in Alabama, Georgia, North Carolina, South Carolina, or certain parts of Florida, Tennessee, or Virginia, your 2024 tax deadline for both filing and payment has been pushed to May 1, 2025.
– Hurricane Milton & Hurricane Debby. All of Florida has until May 1, 2025, to file and pay 2024 taxes.
Green-er relief
Extending tax deadlines isn’t the only way the IRS looks to help if you face a natural disaster. If your property gets damaged within a declared disaster area, you can claim a casualty deduction when you file your taxes.
The math on this one is a bit of a ride, but stay with me…
To figure out how much you can deduct, you’ll start with either the property’s tax basis or the decrease in its fair market value—whichever is smaller. From that, subtract any insurance payouts or other reimbursements you received. Then, subtract 100 dollars from the total. Finally, subtract 10 percent of your Adjusted Gross Income (AGI) from that amount.
And voilà – that’s your casualty deduction ready to claim on your return. (I’m happy to give you a hand with this if long-winded deduction calculations aren’t your thing).
What should you focus on now?
If a natural disaster has disrupted your tax filing this year (or any year, for that matter), make sure to…
1. Check IRS Announcements. Like I mentioned earlier, this is the first place you’ll want to go for details about extended deadlines and any other kind of relief (you can check what the IRS has to say about your area here or check in with my office).
2. Make sure you have your tax records. If you lost any important tax documents in a disaster, contact the IRS for transcripts of past years’ filings and reach out to your financial institutions for duplicate documents. This is so you have what you need to claim disaster relief, and so you can file accurately when your extended deadline comes.
3. Document your losses. Put together a record of your property losses with photos, receipts, and a written inventory. You’ll want to have these when you’re claiming deductible casualty losses (FEMA’s checklists can help you with documentation).
4. File for an extension (if you need to). In the case that the IRS doesn’t offer your area an extension, we can file one for you, or you can apply for one using Form 4868. However, this only pushes back your filing deadline – NOT your payment deadline.
I know I’ve just given you a lot of technical details to think about, and I’m not unaware that rebuilding your life after an event like this is hard. And the fact that you’ve persevered this far is something truly commendable.
Although your taxes are just one small piece in rebuilding the greater whole of your life, my team and I are here to make it one less thing you have to worry about. We’re here to support you. Let’s talk when you’re ready:
