What is a Schedule L IRS form?
Every time you prepare your tax return, you must decide whether to itemize deductions or claim the standard deduction. Generally, it’s better to choose the larger of the two (TurboTax will help you decide which gives you the bigger tax boost). However, you may be able to increase your standard deduction for property losses you suffer within a federal disaster area.
In general, all taxpayers are eligible to claim a casualty loss as part of their itemized deductions if an infrequent or sudden event, such as a hurricane or tornado, causes property damage. If you suffer this type of loss in a federal government declared disaster area, Congress and the IRS will often introduce an exception that allows you to claim the deduction even if you don’t itemize.
The amount of your deductible loss from a disaster area is one of the few exceptions where you can increase the standard deduction. To increase your standard deduction, you must first calculate your loss on Form 4684 and then report it on the Schedule L attachment to your tax return (TurboTax will do this for you).
You can only use a Schedule L to increase your standard deduction if you file your income tax return on Forms 1040 or 1040A. If you are eligible to file using Form 1040EZ, you should consider filing on one of the other forms to take advantage of the larger deduction, even though Form 1040EZ can be prepared in less time. If you anticipate claiming a net disaster loss on Schedule L, then the IRS requires you to fill out Form 1040.