I read that "the main tax change in the new legislation is that individuals can take personal disaster losses even if they don't itemize. They're able to deduct uninsured personal losses in excess of a $500 threshold without regard to the 10%-of-adjusted-gross-income offset that generally applies to disaster loss deductions. This net loss is treated as an additional standard deduction for nonitemizers". However, I haven't been able to get this information into TurboTax in the way indicated before. Please assist. Thank you. Here's how you would report the loss on your return. First, use Form 4684 to calculate the loss. Then transfer the disaster loss amount to Schedule A, line 16, and write "Net Qualified Disaster Loss" on the dotted line. If you are not itemizing, then you would also put your regular standard deduction on line 16 of Schedule A and write next to it "Standard Deduction Claimed With Qualified Disaster Loss." You then combine these two amounts and transfer the total to Form 1040, line 12.
I have a similar problem. The Disaster Relief Act of 2024 lets those who don't itemize increase the standard deduction by the amount of their net qualified disaster loss (as described in Form 1040 line 12 instruction, exception 4) - but the program doesn't have any route to do this.
If your loss is a Qualified Disaster Loss, you would enter the details in the Deductions and Credits section of TurboTax, under Casualties and Thefts.
You would need to check that This event qualifies as a Federally declared major qualified disaster loss when you describe the Casualty Event. enter your FEMA Disaster Code, the date and location of the disaster, the cost basis of the property and the fair market value of the property immediately before and after the disaster.
TurboTax will compute the deduction as an increased Standard deduction by the amount of the casualty loss, less $500.
For those taxpayers claiming the standard deduction with a casualty loss, you are supposed to be able to write "Standard Deduction Claimed With Qualified Disaster Loss" on Line 16A of Schedule A. I do not see this option. Can someone explain how to do it. Thanks.
@bobthecpa A Casualty loss is only deductible on a federal tax return if the loss occurred in a federally declared disaster area.
Click on Federal Taxes (Personal using Home & Business)
Click on Deductions & Credits
Click on I'll choose what I work on (if shown)
Scroll down to Other Deductions and Credits
On Casualties and Thefts, click on the start button