Here at Anstett CPA PA, we went through Irma nearly unscathed. Minus the water damage to our flooring, no power for a week, and spotty internet and phones, we are grateful that the storm surge predicted did not occur! Now let's get the important information on how Irma may affect your taxes this year!
Hurricane Irma victims will be able to draw from retirement accounts without penalty to pay for repairs, one of several provisions in a tax relief bill Congress passed Thursday.
The bill, which also assists those affected by Hurricanes Harvey and Maria, won approval 264-155 despite objections by many Democrats who said Superstorm Sandy victims in New Jersey and New York five years ago did not get the same treatment. The Senate bill passed a similar bill without objection later in the afternoon.
The tax provisions were combined with a bill both parties wanted to pass to extend through March the authorization for the Federal Aviation Administration, which is due to expire Saturday night.
The tax measures in the bill are designed to help hurricane-ravaged areas in the following ways:
- Casualty losses: Currently, taxpayers can deduct losses from their income taxes if they exceed 10% of adjusted gross income, and the taxpayer itemizes. Both of those requirements would be eliminated in the bill, so designated storm victims could write off all their losses, regardless of whether they itemize.
- Retirement withdrawals: The bill would lift the 10% penalty on withdrawing funds from many retirement accounts, including IRAs, to pay for disaster recovery. It also would provide more flexibility for borrowing from accounts.
- Expanded charitable deductions: The current limit on deducting charitable contributions — taxpayers generally can only deduct 50% of their income — would be lifted for donations to hurricane relief, so people making large gifts could write more of them off. It would also change rules for applying large write-offs to multiple years of tax returns.
Call Anstett CPA PA to understand how this will work on your 2017 Tax Return. 239.435.3536