Melanie: After enduring a FEMA-declared natural disaster, Melanie invested $45,000 in repairs and flood defenses, only to learn about new tax relief regulations enacted after her tax filing. Can she still take advantage of these benefits, and how can everyday taxpayers stay informed about retroactive laws?
Danielle: Danielle is contemplating a mini-retirement while her husband is between jobs. They have substantial savings, and she dreams of traveling, yet she is concerned about health insurance, leaving her job, and feeling directionless. Could this be the fresh start she needs?
Leigh: Leigh and her husband have $125,000 in a 529 plan that they no longer need for educational expenses. Their objective is to pay off the mortgage so that one of them can stay home with their children – what would be the most effective way to utilize this money?
Pedro: Pedro took the advice from Paula and Joe – he has now secured a fully remote position that offers a 30% higher salary, matches his benefits, and provides a community aligned with his values.
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Melanie: How can I benefit from retroactive tax relief for those affected by natural disasters? I was looking into the One Big Beautiful Bill Act, which includes tax relief for disaster victims, and then I found out about the Federal Disaster Tax Relief Act of 2023 that was passed in December 2024, well after I submitted my 2023 tax return. This law offers retroactive relief for 2023. That year, I faced a FEMA-declared disaster and spent approximately $22,000 on demolition and repairs, along with another $23,000 for flood control systems and sewer repairs. I received some assistance from FEMA and $5,000 from my homeowner's insurance. Can I still take advantage of these relief measures? Should I amend my 2023 tax return? What documentation is necessary for this process? More generally, how is someone expected to know about a retroactive bill like this? If I qualified, should FEMA have informed me? Additionally, how can an average person stay on top of future legislative changes to ensure they don't miss any relief opportunities?
Danielle: How should I manage health insurance during a mini-retirement? I'm in my early 30s, and my husband will soon be without work for six months to a year. We have enough savings to support us, so I'm tempted to take a mini-retirement. I want to travel, explore national parks, maybe spend some time in Hawaii – essentially do the things that make me happy, since my job no longer does. However, I'm struggling to figure out the health insurance aspect. What options do we have? I want to take this step before starting a family. Although I'm anxious about leaving my job, staying does not fulfill me. I'm also worried that even after this mini-retirement, I may still be unsure about what brings me joy or what kind of work to pursue in the future. Perhaps this time off is exactly what I need. Could a mini-retirement now be more beneficial than attempting to retire a decade early?
Leigh: What should I do with the $125,000 left over in a 529 plan? I'm 31, and my husband is 33. We have a solid income and are debt-free aside from our mortgage. Both of us hold master’s degrees and do not intend to return to school. We have a four-month-old son who might use the 529, but my parents are establishing an account for him that will be fully funded. While I’m uncertain of the amount, I anticipate it will sufficiently cover his needs. I’ve been contributing $7,000 per year to my Roth IRA, but given that the lifetime cap is $35,000, there will still be a considerable amount remaining after that option expires. We’ve already withdrawn $30,000 over the past two years to reduce our mortgage, but the taxes and penalties involved are stressing me out. Withdrawals for non-educational uses are taxed at regular income rates, along with state income tax in Oregon, plus a 10 percent penalty, which makes it feel quite painful. I don’t expect that anyone in my family will need these funds for education. My husband and I aim to pay off our mortgage, allowing one of us to stay at home with our children, and while the 529 balance would assist, it won’t cover the entire amount needed to pay it off. What’s the best way to think about this money and how to utilize it?
Pedro: How did I move from federal employment to a remote job I love? I was a federal worker who had been asked to return to the office, and I was seeking an escape. You both provided excellent advice: target roles at the intersection of technology and government, and instead of just sending out résumés, focus on networking and acquiring referrals. I followed this advice and it paid off. I secured a position with a company
Individuals affected by FEMA-declared disasters might be eligible for specific IRS tax relief, possibly even for previous years. Discover how to revise your tax returns, what records to maintain, and the procedure for claiming these benefits.