Congressional tax rewrite bill could mean tax breaks for Louisiana flood victims

Flood debris (Source: WAFB)
Flood debris (Source: WAFB)

(WAFB) - The tax overhaul bill passed by Congress this week could mean more money in the pockets of those who flooded in August of 2016.

The bill, currently sitting on the president's desk, includes two provisions that could provide a financial assist to disaster victims. "This is a substantial Christmas gift, tax relief to a lot of our flood victims," said Congressman Garret Graves, one of those backing the legislation.

Graves says the bill allows flood victims to refile their tax returns from 2016 to write off more in damages. "Under current law, you have to reach at least 10 percent of your gross income in losses before you can deduct it from your taxes. Basically, that threshold is eliminated," he said.

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The bill also waives the penalty for those who took money out of their retirement plans to pay for repairs. "This flood is no fault of their own, and the IRS should not be penalizing them for trying to get back in their homes and businesses quickly," the congressman said.

For Baton Rouge resident, Sarah Jeansonne, things have largely returned to normal a year after her house took on several feet of water, but the trek to normalcy came with a hefty price tag, including a sizable SBA loan that could take decades to pay off. She could receive extra money in her stocking this year as a result of the disaster-related provisions in the tax rewrite bill. She says she will likely put any extra cash toward her flood recovery efforts.

"We're out more money than we got from the loan and the FEMA gr ant. We'll probably repay some of that, otherwise, it will go toward the SBA loan," she said.

President Donald Trump is expected to sign the bill into law as early as Friday.

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