Mary Feichthaler

Hurricane Ian was the most financially devastating hurricane to ever hit Florida and it has caused over $100 billion of damage to homes and businesses. One year later, Congress has yet to consider legislation to designate Hurricane Ian as a qualified disaster. Congressman Gregory Steube did introduce a bill to Congress on March 1, 2023, (H. R. 1331), to treat Hurricane Ian as a qualified disaster loss for income tax purposes, which would have provided much-needed tax relief to Southwest Florida residents, but the bill has yet to be discussed by Congress. However, even without Congressional action, many homeowners in Lee County are still eligible for potentially tens of thousands of dollars of tax refunds.

With the Oct. 15 extended deadline to file personal income tax returns quickly approaching, many taxpayers have filed their 2022 returns assuming that they will not be able to benefit from claiming an ordinary casualty loss and that Congress will not consider favorable qualified disaster legislation before the filing deadline.

Even if one has received insurance reimbursements, taxpayers do have the potential to receive significant income tax relief by claiming a non-qualified casualty loss on their amended 2021 or 2022 personal income tax returns.

The rules involving deductions relating to unreimbursed property damage caused by a casualty loss hinge on what type of casualty is incurred. The last major hurricane to impact our area was Hurricane Irma, which was given special designation by Congress as a “Qualified Casualty Loss.” As a result, taxpayers adversely impacted by Hurricane Irma were able to maximize their loss deductions without claiming other itemized deductions.

Casualty losses are determined based on the damaged property’s fair value immediately before and immediately after a disaster such as a hurricane. Hurricane Ian is the most serious storm to impact our area since Hurricane Irma and the most damaging in Florida history. Since Hurricane Ian has not been designated as a qualified disaster, taxpayers must deduct 10% of their adjusted gross income (“AGI”) plus an additional $100 from the amount calculated as their initial casualty loss. This remaining casualty loss amount is combined with other itemized deductions such as mortgage interest, property taxes, charitable donations and medical expenses to arrive at the total itemized deduction amount. If this amount exceeds the individual’s standard deduction, the more favorable itemized deduction amounts will be claimed on the tax return, resulting in a reduction of income tax. In the case where itemized deductions exceed AGI, a loss carryover is generated to be utilized for further tax benefits in the following tax year.

My clients have seen an average reduction in residence fair market value of over $60,000. Depending on the taxpayers’ adjusted gross income, this casualty deduction can result in a tax savings of thousands, possibly tens of thousands, of dollars. Please keep in mind that deductions are also reduced by insurance reimbursements, but losses are not impacted by actual out-of-pocket repair estimates or payments.

If Hurricane Ian had been designated by Congress as a qualified disaster, the taxpayer’s casualty loss deduction would not be impacted by adjusted gross income and would result in even greater tax savings.

The casualty loss rules are complicated and require that several steps be followed correctly prior to the deduction of losses caused by Hurricane Ian. Damage to business property is also eligible for the deduction. Taxpayers are eligible to file amended returns up to three years after the initial due date of the tax returns. This means that there is still plenty of time to consider filing an amended return to claim deductions for Hurricane Ian losses. Millions of dollars of loss deductions are being left unclaimed by Cape Coral homeowners.

The services of an experienced CPA should be sought to help correctly navigate the complicated Internal Revenue Service casualty loss rules. I also encourage all Lee County homeowners to contact their elected officials to encourage them to bring H.R. 1331 to a vote in Congress to designate Hurricane Ian a Qualified Disaster. Below is the telephone contact information for our Florida senators and congresspeople. Each of these officials has a form on their official websites through which constituents can send emails.

• Sen. Rick Scott: 202-224-5274 or

• Sen. Marco Rubio: 202-224-3041

• Congressman Byron Donalds: 202-225-2536

Mary Feichthaler is a licensed CPA and has 26 years of experience assisting individual, corporate and nonprofit clients in all areas of taxation including income tax compliance and audits, sales tax, FIRPTA and offers in compromise. She has lived in Cape Coral since 2002. She graduated magna cum laude from Georgetown University with a degree in accounting and graduated magna cum laude from Pace University with a master of science in taxation degree. She is a Gulfshore Business 40 under 40 Award Winner and was a 2021 FICPA Women to Watch Award Nominee.

Mary Feichthaler can be reached at mary@feichthalertax.com or at 239-898-8522.

The information in this article is general in nature and not intended as tax advice to anyone. Individuals should consult with a licensed CPA before making any tax or investment decisions.