Understanding some aftereffects from the 2024 storms
Understanding some aftereffects from the 2024 storms.
2024 saw three named storms hit Florida and cause damage throughout the Southeast. Parts of the west coast of Florida and Western North Carolina were devastated. While the storms have passed, aftereffects linger. By now, most clients have started the process of making a claim with their insurance companies or applied for federal aid with FEMA if they were eligible. So today, we will just touch on the three most frequently asked questions we have received about storm damage.
Are hurricane damages deductible?
Yes. In general, deductible losses are costs you pay, not those paid for by your insurance, to repair damage. In December, President Biden signed a new law that applies to disasters declared from 1/1/2020 through February 9, 2025. Prior to this act, the deductible damage costs were reduced by 10% of one’s Adjusted Gross Income (AGI). For instance, if your AGI was $150,000, $15,000 of your damages would not be deductible. Under the new law, each separate casualty loss is deductible to the extent it exceeds a mere $500. In addition to eliminating the AGI reduction, this new legislation makes damages deductible whether one itemizes or not.
As is often the case with tax matters, there are many details that can affect the qualifications for deducting disaster losses. For now, the most important thing you should do if you incurred losses due to these storms is to keep good records of the damage and receipts for the repairs. Further, if you suffered damages from a declared disaster since January 1, 2020 and did not get as favorable tax treatment as this new law allows, you may be able to amend your return and receive a tax refund. Our tax team is ready to help you.
How can I help those that are still reeling in the disaster zones?
Donations to relief efforts are always appreciated. Different charities focus on different aspects of recovery. For Helene ravished areas, this site is a good guide to what groups are helping victims of the storm and flooding.
As for how to donate in the most tax efficient way, that varies from household to household. We are well versed in giving techniques and would be happy to help determine what would be best for your family. The process starts with verifying the charity is a properly registered entity. That can be done via this IRS link https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations.
The video with this post was recorded prior to the fires in California. If you wish to support relief efforts in that area, see Los Angeles Fire Department Foundation, Los Angeles Regional Food Bank, League of California Community Foundations, and the American Red Cross.
How do I know a charity is legitimate?
This is an important question to ask because unfortunately, when disaster strikes, scam artists appear. Some come with blue tarps but others with a collection basket or a website. A wealth of information on charities can be found online. Try charitynavigator.org or charitychoices.com. To take a deeper dive into how each charity spends the money it raises, look them up at guidestar.org, where you can even see the charity’s Form 990 tax filings.
Common traits of scams are charities that want you to donate via gift cards or so-called cryptocurrencies (like bitcoin) and difficulty getting information from or about the charity. If you find a charity you believe is a scam or just want to learn about charity scams, the FBI offers some resources and a fraud reporting function.
News & Notes
MFT named “Best Place to Work” for the 6th time:
It’s true. We are very proud of our team, and it is gratifying to see others recognize the work we do to maintain a great working environment. We have been named a best place to work for the 6th time. Financial Planning magazine named us one of the “52 Best RIAs to Work for.” Financial Planning took over the evaluation from Investment News, whose list of the top 75 best places to work for financial advisors in the U.S. we appeared on five times since 2019. The process which Financial Planning and the Best Companies Group used to determine the list included both information from firms about their offerings and practices and the completion of an extensive anonymous employee survey.
“These RIAs are shining examples of the ways in which workplace culture, benefits, pay and so much more can positively impact employees,” Editor-in-Chief Brian Wallheimer said. “It’s clear that these firms love their employees, and the employees love them back.”
Moisand Fitzgerald Tamayo, LLC named a top firm:
For the second year in a row, our firm was named to the list of America’s top 250 independent financial planning and wealth management firms by Forbes. The firm has been similarly recognized at various times by USA Today, Financial Advisor, Financial Times, Advisor HQ, and RIA Biz. We credit these recognitions to the quality of our team. More information and full details about the methodology can be found here.
Moisand Fitzgerald Tamayo, LLC continues to contribute to the advancement of the financial planning profession:
Four members of our team have been elected to serve on the 2025 Board of Directors of the FPA of Central Florida. Will Wallace is a Director at Large, Casandra Garrett is the chapter liaison to the state-wide consortium of FPA chapters, the FPA of Florida, Tommy Lucas, CFP®, EA is the chapter Secretary, and Brad Brescia is President-elect.
MFT Supports the development of the next generation of financial advisors:
MFT is proud to continue sponsoring the University of Florida’s Wealth Management program at the Warrington School of Business. Recently, we hosted a meet-and-greet event at the Citrus Club in Orlando, where approximately 30 students had the opportunity to connect with local financial planners and industry professionals. Now nearing the end of its second year, the program has already attracted over 200 students, becoming a standout offering for future financial advisors.
Looking ahead, Charlie Fitzgerald and Ron Tamayo will represent MFT at the program’s inaugural Future Advisors Conference on January 22–23 at the University of Florida. They will serve as judges for student financial planning presentations, further contributing to the growth and success of this impactful program.
MFT recognized by the Orlando Business Journal:
The Orlando Business Journal named us to their list of the Top Downtown Orlando Businesses. This new list by the OBJ ranks downtown companies by the number of employees.
Moisand honored as an industry leader:
In December, Dan was again named to InvestmentNews’ Hot List honoring “the top movers and shakers in wealth management.” The winners were nominated in August by wealth management professionals across the country and narrowed down to the top 97 based on their contributions helping to shape the industry.
Tax filing alert
Many taxpayers will not be able to file their 2024 tax returns by their deadline. Taxpayers can receive a six-month extension of time to October 15, 2025 to file and avoid any interest charges or penalties from the IRS if done properly. What does “done properly” mean, what are the benefits and downsides of an extension, and should you extend your tax return this year? Our Tax Manager, Kevin McDermott, CPA, explained the basics of how extensions work in a prior post.
Important numbers and dates for 2025
Marginal tax brackets for tax year 2025
Married filing jointly
Taxable income | Tax rate |
$23,850 or less | 10% |
$23,851 to $96,950 | $2,385 Plus 12% of amount over $23,850 |
$96,951 to $206,700 | $11,157 Plus 22% of amount over $96,950 |
$206,701 to $394,600 | $35,302 Plus 24% of amount over $206,700 |
$394,601 to $501,050 | $80,398 Plus 32% of amount over $394,600 |
$501,051 to $751,600 | $114,462 Plus 35% of amount over $501,050 |
$751,601 and above | $202,155 Plus 37% of amount over $751,600 |
Source: IRS
Single filers
Taxable income | Tax rate |
$11,925 or less | 10% |
$11,926 to $48,475 | $1,193 Plus 12% of amount over $11,925 |
$48,476 to $103,350 | $5,579 Plus 22% of amount over $48,475 |
$103,351 to $197,300 | $17,651 Plus 24% of amount over $103,350 |
$197,301 to $250,525 | $40,199 Plus 32% of amount over $197,300 |
$250,526 to $626,350 | $57,231 Plus 35% of amount over $250,525 |
$626,351 and above | $188,770 Plus 37% of amount over $626,350 |
Source: IRS
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan, is increased to $23,500, up from $23,000. The catch-up contribution limit for employees aged 50 and over in the plans remains $7,500 for 2025. New in 2025, catch-up contributions for employees 60-63 in 2025 is $11,250 if the plan documents have been amended to allow for this special larger contribution.
The limit on annual contributions to an IRA is unchanged at $7,000. The IRA catch-up contribution limit for individuals aged 50 and over also remains $1,000 for 2025.
For 2025, the limit on Qualified Charitable Distributions from IRAs increased to $108,000, up from $105,000. The annual gift tax exclusion is increased by $1,000 to $19,000, and the Lifetime exemption from Gift and Estate Taxes is $13,990,000.
For more information, see Rev. Proc. 2024-40 for most inflation adjustment amounts, Notice 2024-80 for amounts relating to retirement accounts, and Rev. Proc 2024-25 for amounts relating to health savings accounts (HSAs).
Upcoming Important Dates
February 15 –
- Form W-4 filing deadline for taxpayers who claimed an exemption from income tax withholding for the prior year to continue their exemption in the current year
March 15 – if not in disaster area. (If in Florida, Alabama, Georgia, North Carolina, or South Carolina, see May 1 below. If in Los Angeles, see LA Fire note below.)
- Income tax return (Form 1120S) filing and payment deadline for calendar year S-corporations
- Income tax return (Form 1065 or 1065-B) filing and payment deadline for calendar year multi-member partnerships and multi-member LLCs (default)
- K-1 issuance deadline
- Request for automatic six-month extension (Form 7004) filing deadline to extend filing Form 1120S, 1065, and 1065-B
- S-corporation election (Form 2553) filing deadline to be treated as an S-corporation in the current year
March 31 – End of Medicare General Enrollment Period
April 1 – “Required Beginning Date” which is the deadline to complete the first Required Minimum Distribution (RMD) from an IRA or retirement account for anyone who turned 73 in 2024. (2025 RMD due date is December 31, 2025)
April 15 – if not in disaster area. (If in Florida, Alabama, Georgia, North Carolina, or South Carolina, see May 1 below. If in Los Angeles, see LA Fire note below.)
- Income tax return (Form 1040) filing and payment deadline
- Gift tax return (Form 709) filing and payment deadline
- Request for an automatic six-month extension (Form 4868) filing deadline to extend filing Form 1040 and 709
- Q1 estimated tax payment deadline
- Deadline to contribute to an IRA or HSA for prior tax year
- Income tax return (Form 1040) filing and payment deadline for sole proprietorships and single-member LLCs
- Income tax return (Form 1120) filing and payment deadline for calendar year C-Corporations and multi-member LLCs that elect to be classified as a corporation
- Request for an automatic six-month extension (Form 7004) filing deadline to extend filing Form 1120
- Q1 estimated tax payment deadline for sole proprietorships, single-member LLCs, C-corporations, and multi-member LLCs that elect to be treated as a corporation
May 1 – Q4 2024 estimated payments (was due 1-15-25), Q1 2025 estimated payments (was due 4-15-25), filing a 2023 tax return that was on extension (was due 10-15-24), and filing a timely 2024 tax return or 2024 extension (was due 4-15-25) for taxpayers that reside or have a business anywhere in Alabama, Georgia, North Carolina, South Carolina, or Florida.
LA Fire note: Taxpayers with residences or businesses in Los Angeles County have their deadlines extended until October 15. For more detail, see this IRS notice.
Please remember to call us: When anything significant happens in your life, including changes in your finances, family, or health that could affect your financial plan, please let us know so that we can adapt our planning and portfolio work for you accordingly. Also, if you ever fail to receive a monthly statement for one of the Schwab Institutional accounts under our management, please let us know so we may assure the respective custodian delivers your statements promptly.
Yours truly,
The Team at Moisand Fitzgerald Tamayo, LLC