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Dear Client,
We hope you're doing well. As always, SK Financial CPA is here to keep you informed on important IRS updates. Below, we have highlighted the key points from the IRS’s recent announcement regarding tax relief due to Hurricane Milton. This relief applies to individuals and businesses in Florida, providing extended deadlines and other important tax provisions.
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Hurricane Milton Tax Relief
- Applies to individuals and businesses in all of Florida.
Extended Deadlines
May 1, 2025, is now the deadline for:
- Filing 2024 individual and business tax returns normally due in March or April 2025.
- Filing 2023 federal returns (with extensions) for individuals, C corporations, and tax-exempt organizations.
- 2024 quarterly estimated tax payments normally due on January 15, 2025, and 2025 estimated tax payments normally due on April 15, 2025.
- Quarterly payroll and excise tax returns normally due on October 31, 2024, January 31, 2025, and April 30, 2025.
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Automatic Relief
- The IRS will automatically grant relief to taxpayers with an IRS address of record in the disaster area. No action is required by you.
- If you are located outside the disaster area but your records are in an affected area, please get in touch with the IRS at 866-562-5227 to discuss your options.
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Disaster-Related Losses
2024 disaster losses can be claimed on your 2023 or 2024 federal return. That’s because individuals can opt to take the loss on the return for the disaster year or the return for the year preceding the disaster. If you’ve already filed your 2023 1040, you can amend it to take the write-off by filing Form 1040-X by Oct. 15, 2025.
If you are in a federally declared disaster area, you may deduct uninsured or unreimbursed disaster-related losses on your federal tax return. These losses apply to both personal use and business property. Be sure to include the FEMA declaration number 3622-EM on any return claiming a loss. Qualified disaster relief payments are generally excluded from gross income.
The IRS provides disaster loss workbooks for individuals (Publication 584) and businesses (Publication 584-B) to help estimate and prove the market value of items for insurance and casualty loss claims.
For more details, refer to Publication 547.
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Retirement Plan Relief
The 10% penalty on pre-age-59½ payouts is waived on up to $22,000 per disaster, provided the distribution is taken within 179 days of the disaster declaration. Tax on these distributions can be spread over three years unless you choose to pay it all at once. Any amounts recontributed within the three-year period will be treated as tax-free rollovers.
You can also borrow more from your 401(k) or other workplace plans—up to the lesser of $100,000 or 100% of your account balance. If the plan allows, repayment terms may be extended by one year for disaster relief.
Lawmakers are feeling pressure to enact a stand-alone disaster relief tax bill before year-end. It passed the House in May but has stalled in the upper chamber. The wide devastation of Helene and the effects of Milton might push senators to act on this. One provision would let people take personal disaster losses even if they don’t itemize on Schedule A. The net loss would be treated as an additional standard deduction. This would apply to federally declared disasters in 2021 and subsequent years.
If you lost prior-year returns in a disaster, use the IRS’s Get Transcript tool on its website to view and print a summary of your tax information, mail Form 4506-T or call IRS’s automated line at 800-908-9946. For an actual return, mail Form 4506.
IRS also has a phone line for disaster-related queries: 866-562-5227.
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Primary Home Assistance: To apply for FEMA disaster assistance for your primary home, complete the online application at disasterassistance.gov. The process takes 10 to 15 minutes.
Business Emergency Loan Program: Governor Ron DeSantis has activated the Florida Small Business Emergency Bridge Loan Program, offering $50 million in zero-interest loans to businesses impacted by Hurricane Milton. Small business owners, including sole proprietors, can apply at FloridaJobs.org/EBL through December 4, 2024, or until funds are exhausted.
Activate Hope Disaster Assistance Form: Activate Hope, part of the Hope Florida initiative, connects Floridians with resources for disaster recovery. Request assistance at hopeflorida.com.
SBA Disaster Loans: Types of disaster loans available include:
- Home Disaster Loans: For homeowners or renters to repair or replace disaster-damaged property, including real estate and personal property like cars.
- Business Physical Disaster Loans: For businesses of any size and private non-profits to repair or replace disaster-damaged property, including real estate, inventory, and equipment.
- Economic Injury Disaster Loans (EIDL): Working capital loans for small businesses, agricultural cooperatives, and non-profits to meet financial obligations affected by the disaster.
Information about all of the above can be found at the SBA site.
We hope this newsletter clarifies the latest IRS updates. If you have any questions or need assistance, please feel free to reach out to our team.
Best regards,
SK Financial CPA
Your trusted partner in tax and accounting services
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