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I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

H.R. 5863 now law. Do I just AMEND 2022? Is TurboTax ready for that?

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13 Replies

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

You would amend your 2023 return, not 2022 (that was due April 15, 2024).

 

Yes, if a loss occurs in 2024, you can either take the deduction on your 2024 return (to be filed after January 31, 2025) or by amending your 2023 return (which you should have originally filed no later than April 15, 2024, unless you had an extension.) https://www.irs.gov/taxtopics/tc515

 

There are two reasons you might want to claim your loss by amending your 2023 return instead of claiming it on your 2024 return.  A) to get a refund faster, or B) if your income is affected by the disaster in a way that would limit the deductibility of the loss.

 

As for reason A, it is so close to the regular filing season, that you will get any possible refund faster if you claim the loss on your 2024 return. Amended returns are taking more than 5 months to process and the IRS prioritizes current year returns.  As for reason B, only you can determine that by testing both scenarios.

 

To amend a 2023 return, use these instructions.

https://ttlc.intuit.com/turbotax-support/en-us/help-article/amend-tax-return/amend-2023-federal-stat...

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

What about H.R. 5863 that is now law? It’s the Federal Disaster Relief Act. I have losses from Hurricane Ian that occurred in 2022.  H.R. 5863 Washington signed into law this month.

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?


@douglasx1 wrote:

What about H.R. 5863 that is now law? It’s the Federal Disaster Relief Act. I have losses from Hurricane Ian that occurred in 2022.  H.R. 5863 Washington signed into law this month.


That law doesn't change anything retroactive to 2022.  The law in effect in 2022 was that you could report a disaster loss on your 2022 return, or you could have amended your 2021 return if that would have been faster.   So if you did not, you can go back and amend.  

The IRS tax notices for various disasters are here.

https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

This is what is confusing me: https://steube.house.gov/taxrelief/

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?


@douglasx1 wrote:

This is what is confusing me: https://steube.house.gov/taxrelief/


 

"Further, your net casualty loss wouldn’t need to exceed 10% of your adjusted gross income to qualify for the deduction."

 

I have not read the law, and the specific wording of this sentence makes no sense, but if it means what I think it means (that the 10% loss deductible does not apply), then I can 100% guarantee that neither Turbotax nor the IRS is ready to process a tax return that claims a loss without using the 10% deductible, given that the law was just signed.  It will likely take the IRS weeks or months to produce a new casualty loss form that does not contain the 10% deductible and program their computers to accept returns (and not consider them math mistakes and reject them).  

 

Once the IRS has updated their forms, turbotax might or might not fix their 2022 program to allow you to amend (they might decide there are not enough people affected).  There's no way to know and it's not going to happen for a long time if it does.

 

I will flag this to the moderators.  Sometimes they create a signup for notifications when forms and changes are ready.  

 

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?


@douglasx1 wrote:

This is what is confusing me: https://steube.house.gov/taxrelief/


I've researched the law, and it does say that, for disasters between 2020 and February 2025, the 10% deductible on casualty losses is suspended, and you can claim a casualty loss even if you don't itemize your other deductions.

 

This is a major change, and I expect it will delay people filing with current (2024) casualty losses for several weeks at least.  I have no idea how long it will take the IRS to update their procedures or for Turbotax to update their forms and instructions.  I would check back in a couple of months.  The deadline for amending a 2022 return to claim a loss would be April 15, 2026, so there is plenty of time.

charlesray
Returning Member

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

According to the new law, IAN is now a "Qualified Disaster". Those of us who DID NOT check the "Qualified" button were subject to the 10% deduction. Now, that 10% deduction is waived. So, can we just amend the 2022 return by checking the appropriate button and resubmitting (on paper now), or do we have to wait until the IRS and Turbotax update the process and software? It seems to me the only change is the checking of the appropriate box, printing, signing and sending it in. BTW, same thing applies to the 2023 return, but it can be submitted electronically. 

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?


@charlesray wrote:

According to the new law, IAN is now a "Qualified Disaster". Those of us who DID NOT check the "Qualified" button were subject to the 10% deduction. Now, that 10% deduction is waived. So, can we just amend the 2022 return by checking the appropriate button and resubmitting (on paper now), or do we have to wait until the IRS and Turbotax update the process and software? It seems to me the only change is the checking of the appropriate box, printing, signing and sending it in. BTW, same thing applies to the 2023 return, but it can be submitted electronically. 


No, it's not just checking a box.  Both Turbotax and the IRS computers need to be reprogrammed to process disaster losses in a completely different way (no 10% deductible, and making the loss an "above the line" deduction that you can take even without itemizing your other deductions.  It changes the rules and calculations completely.  You will need to wait for updated forms from the IRS to file on paper, and for updated programming if you want to use the software.  

charlesray
Returning Member

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

Thanks for the response. However, both the 2022 and 2023 Premier desktop versions have the "Qualified" button calculations already built in .  When I first submitted, I checked the normal button. (My understanding, from several news reports, is that many users and professionals already submitted using the qualified button option - counting on Congress passing the law eventually. ) I have already run test calcs and looked at the forms produced. They all follow the rules as best I can tell for a Qualified disaster claim - and carry all the calcs forward to schedule A properly - without the 10% deduction. Not sure what else Turbo tax could do in this area. I know that the 3 year averaging of IRA withdrawals will have to await updating of the software for 2022-2024. But I'm not going to do that until this year's 2024 withdrawals for Milton.  In the amended description box I am specifically calling out the laws passage and the use of the Qualified button option.  Now waiting on the IRS?  That's a whole different beast. I don't even want to begin calling them and asking this question....

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?


@charlesray wrote:

Thanks for the response. However, both the 2022 and 2023 Premier desktop versions have the "Qualified" button calculations already built in . 


 

Are you talking about a casualty loss deduction or a qualified disaster for purposes of an IRA withdrawal?  The SECURE Act 2.0 created some new options for withdrawing money from retirement plans to deal with "qualified" disasters.  This is currently included in Turbotax.

https://www.irs.gov/newsroom/disaster-relief-frequent-asked-questions-retirement-plans-and-iras-unde...

 

That is completely different than the Disaster Relief Act of 2024, which changes how casualty losses are deducted using form 4684.  This is not included in Turbotax or in the official IRS forms and instructions. 

https://www.irs.gov/taxtopics/tc515

 

 

 

 

charlesray
Returning Member

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

The only change I am wanting to do is on Form 4684, changing the check box from Line 4f to Line 4e. This changes line 11 on the 4684 to $500 and allows line 15 to be put into line 16 of Schedule A instead of doing the 10% calculation of 4684 line 17. 

 

This is the only change I think I have to make to enable an amended return to be submitted.  I am hoping that by the time the IRS gets around to actually reading this amended (paper) return this year, they will have the proper instructions in place to accept it.

 

I do not want to mess with anything about IRA withdrawals until TY2024 when Turbo Tax will be updated with the latest requirements of the Secure act. 

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?


@charlesray wrote:

The only change I am wanting to do is on Form 4684, changing the check box from Line 4f to Line 4e. This changes line 11 on the 4684 to $500 and allows line 15 to be put into line 16 of Schedule A instead of doing the 10% calculation of 4684 line 17. 

 

 


Here's the problem I am seeing.  According to the IRS instructions for the 2023 form 4684, nothing that happened after Feb 25, 2021 is a "qualified disaster" under the terms of the law that created the special calculation.  It should really be impossible to claim any qualified loss on a 2023 tax return, but the IRS seems to have left the calculation in "just in case."

 

That means it will be much simpler for the IRS to reprogram their computers.  But reprogramming is still needed, because you must enter the FEMA number of the disaster on the top of the form 4684, and the IRS has to at least re-program their computers to accept additional disaster numbers through 2024.  The draft version of the 2024 instructions retains the 2021 date and does not recognize the changes due to the 2024 Disaster Relief Act.

 

So, while you can generate a return with the correct calculation, there is no guarantee that it will be processed correctly by the IRS, since you have to include the disaster number.  It's up to you if you want to try it, or wait for guidance from the IRS as to when they will be ready. 

 

 

charlesray
Returning Member

I "think" I can amend my 2022 Tax return because of losses not covered by ins. for Hurricane Ian in 2022 like deductible and losses to property. Is this correct?

Thanks! Pretty much what I thought. The only saving grace is a paper submittal which means a long delay in getting it read. No use in calling them about it. I know I will get a different answer every time I ask the question. I am going to wait a couple more weeks, talk to a few CPAs and see what they are doing before I submit.

 

Thanks Again!

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