But by amending and refiling their 2016 return, that same family can now claim another $10,000 deduction and significantly drop their bill.įor those who suffered major losses and didn't have insurance, the increased deductions could add up to thousands - or even tens of thousands - of dollars back from the federal government, according to staffers in U.S. If this flood-hit family earned $100,000 in 2016, that'd mean they couldn't write off the first $10,000 in losses on their federal taxes and could only claim a $25,000 deduction. Previous federal tax rules limited taxpayers to claiming only casualty losses that amounted to more than 10 percent of their income. For example, suppose that family shelled out $125,000 to repair their home and replace their belongings - but flood insurance payouts and grants from the Restore Louisiana program sent them only $90,000, leaving an uncompensated gap of $35,000. 'Cost to repair is a good estimate,' said Lagarde, who added that those amending and refiling will likely want to have some sort of documentation - construction bills, receipts or estimates - to back up their claims.įor a Baton Rouge family who took on several feet of water and lost cars, televisions and furniture in the flood, the new deductions could mean a sizeable new refund on their 2016 taxes. Flood insurance payouts and government grants count against that figure, Schreiber said, but flood victims shouldn't count the value of loans taken out to rebuild because those funds eventually have to be paid back. The easiest way for a homeowner to calculate the size of their casualty losses is to add up how much they ended up paying out-of-pocket to fix their homes and replace what was destroyed, said Schreiber.

But the tweaked federal rules open it up to flood victims who took the standard deduction as well, likely giving a tax break to renters and many lower- and middle-income Louisianans who didn't benefit from the 'casualty loss' deduction when they filed their 2016 return the first time around. Regular federal tax rules also limit 'casualty loss' deductions to those itemizing their returns.

That's a significant change from past tax rules, which imposed much higher limits on the amount of uncompensated losses - known as 'casualty losses' - victims could write off. Louisiana residents hit by more than $500 in losses during the 2016 floods that weren't covered by insurance payouts or government grants can now deduct those expenses from their federally taxable income. 'They got plenty of time to do it,' said Gerard 'Jerry' Schreiber Jr., of Schreiber & Schreiber CPAs in Metairie.īecause of a change passed by the Louisiana Legislature earlier this year during an otherwise unproductive special session, flood victims taking advantage of the newly available federal disaster tax relief won't have to adjust their state returns or pay any more in state income tax, said Brandon Lagarde, tax director at Postlethwaite & Netterville in Baton Rouge. That's only if all eligible Louisianans eligible take the time to file the paperwork and claim their refund checks.Īnd while this year's tax filing deadline looms in less than a month, flood victims actually have until April 15, 2020, to amend their 2016 returns and claim the refunds, according to tax professionals who spoke with The Advocate this week. Two changes wrapped in December's GOP-backed tax cuts will let those hit by that year's devastating March and August floods write off far more of their losses on their returns - even if they didn't itemize their deductions - and get refunds on penalties for tapping retirement savings to rebuild.Ībout $500 million in federal taxes paid by Louisiana flood victims in 2016 is up for grabs and will head back into residents' pockets, according to estimates from the Congressional Budget Office. Louisianans hit by floods in 2016 will want to dust off their old tax returns from that year to tap new deductions and cash in on hundreds of millions of federal tax relief dollars for those who saw homes, cars and other property ruined by rising waters.

Turbotax 1040x amended return 2016