FEMA assistance & Taxes

cmspenc83e

I was renting a home in FL and lost most of my possessions due to Hurricane Helene flooding, which also forced me and my wife to relocate long-term. We usually claim 0 allowances so that at the end of the year we owe little-to-no additional taxes. Considering we received FEMA funding, how is that going to impact our taxes this year? I do have receipts for most of the moving-related expenses we were forced to incur as a result of the hurricane.

PamelaP

I'm sorry to hear you've gone through so much! FEMA assistance is not considered taxable income, so it would not need to be entered in the "Income" section of our software. The main thing that may affect your taxes is taking a disaster loss. This is a type of itemized deduction for damaged or destroyed property not covered by insurance or other reimbursement in a Federally declared disaster area. You would enter the information in our software by selecting "Deductions/Credits" then "Casualty and Thefts." It will only affect your taxes if your expenses exceed a certain amount and you itemize your deductions. Here's another helpful resource directly from the IRS about Hurricane Helene specifically:

https://www.irs.gov/newsroom/irs-help-available-to-victims-of-hurricanes-helene-and-milton-may-1-deadline-now-applies-to-individuals-and-businesses