Updated Financial Information for L.A.County Wildfire Recovery
The aftermath of this unprecedented wildfire is overwhelming. The loss, uncertainty, and countless decisions can feel like too much all at once. But you’re not alone. Relief programs are available to ease the burden—whether it’s lowering your property taxes, extending tax filing deadlines, or deducting losses from your taxes, there are resources to help you get on your feet and start to rebuild.
At the Klapper Group, we’re not just your real estate team; we’re also your neighbors. We know how hard this is and are here to help guide you through these programs and resources. This guide has been shared with us by trusted tax professionals who have offered their expertise and guidance and it breaks down what’s available, how to access it, and what steps you can take to start the recovery process. Always double-check this information with your tax professional, because each case and household is different.
Extended Tax Filing Deadlines: More Time to Focus on Recovery
In times of disaster, even small extensions can make a big difference. To give wildfire survivors space to focus on their recovery, federal and state tax authorities have extended key filing and payment deadlines.
What’s Covered:
• Filing Extensions: You now have until October 15, 2025, to file your federal and California state tax returns, make payments, and complete other time-sensitive tax-related tasks.
• Payroll and Excise Taxes: Penalties for late deposits will be waived if payments are made by January 22, 2025.
• Automatic Relief: There’s no extra paperwork required; if you live in a disaster-designated county, these extensions apply automatically.
Who Qualifies:
These extensions are available to individuals and businesses located in federally declared disaster areas.
This extra time is designed to take one thing off your plate so you can focus on what matters most—rebuilding your home and life.
Lowering Property Taxes: A Practical Way to Save
If your home or property was damaged or destroyed, you may qualify for a temporary reassessment to reflect its current, lower value. This adjustment can significantly reduce your property taxes while you rebuild, easing the financial strain.
How It Works:
1. File a Claim: Complete the Misfortune & Calamity Claim Form and submit it within 12 months of the wildfire.
2. Damage Assessment: The Assessor’s Office may send an appraiser to evaluate the damage to your property.
3. Reassessment: Your property will be reassessed to reflect the reduced value caused by the damage.
4. Notification: You’ll receive a notice with your updated property value and any changes to your tax bill.
What to Expect:
• The reassessment process timeline varies based on the volume of claims, but it’s important to act quickly to ensure your eligibility.
If you need assistance with filing or understanding this process, the Klapper Group is here to help. We can connect you with the best experts in this field to help guide you.
Claiming Casualty Losses: Reducing Your Taxable Income
Wildfire survivors often face unexpected financial strain, but claiming casualty losses on your federal taxes can help offset some of those costs. These deductions are available for property damage caused by federally declared disasters.
Key Details from IRS Publication 547:
• What Qualifies: Casualty losses include damage, destruction, or loss caused by sudden, unexpected events like wildfires.
• Deduction Rules:
It has been recommended by tax professionals that for personal-use property, you would deduct the lesser of your adjusted basis (your property’s original cost plus improvements) or the decrease in its fair market value caused by the disaster.
• Reduce each loss by $100 (or $500 for qualified disasters) and by 10% of your adjusted gross income (AGI).
Special Rules for Declared Disasters:
• You can claim the loss for the year the disaster occurred or the prior year, whichever is more beneficial.
• Qualified disaster losses may be exempt from the 10% AGI reduction:
When fire survivors suffer property damage or loss due to a federally declared disaster, they may be eligible for a casualty loss deduction on their tax returns. Here’s how it works:
- Federally Declared Disaster: The fire must be declared a federal disaster area for the deduction to apply.
- Uninsured Loss: The casualty loss must not be covered by insurance or other reimbursements.
- $100 Rule: Subtract $100 from the total casualty loss amount for each disaster event.
- 10% AGI Rule: Only the portion of the loss that exceeds 10% of the taxpayer’s Adjusted Gross Income (AGI) is deductible.
Example for Fire Survivors:
- A fire survivor has an AGI of $50,000.
- Their total loss (after insurance reimbursement) is $12,000.
- Subtract $100 for the per-event reduction, leaving $11,900.
- Subtract 10% of their AGI ($5,000), leaving $6,900 as the deductible amount.
This rule can significantly reduce taxable income, helping survivors offset some financial burden during recovery. Survivors should consult with a tax professional or the IRS to determine eligibility and how to file.
• Reporting: Use IRS Form 4684 to calculate your loss and include FEMA declaration number 4856-DR on your return.
Documentation Tips:
• Keep detailed records, including original property costs, photos of damage, appraisals, and insurance claims or reimbursements.
Deductions like this can make a real difference during recovery. If you’re unsure how to proceed, the Klapper Group can help you understand these options or connect you with tax professionals.
Additional Benefits to Lighten the Load
Relief programs extend beyond tax deductions and property reassessments. Here are a few more benefits designed to help wildfire survivors:
• Waived Fees for Tax Return Copies: If you need past tax returns, you can request them for free.
• Disaster Relief Payments: Certain payments received as part of disaster recovery efforts are excluded from your gross income, which lowers your taxable income.
• Retirement Account Access: You may qualify for penalty-free withdrawals from retirement accounts like IRAs if the funds are used for disaster recovery.
These programs can significantly ease your financial burden. If you have questions or need direction, reach out to the Klapper Group for guidance.
Your Go-To Resource: The Disaster Relief Guide
The Disaster Relief Guide from the California State Board of Equalization is packed with useful information to help you navigate recovery. Key sections include:
• Eligibility Criteria: Who qualifies for property tax relief and other disaster benefits.
• Filing Instructions: Step-by-step guidance on how to apply for reassessment or deferral programs.
• Program Overviews: Descriptions of the various types of relief available.
• FAQs: Answers to common questions about timelines, eligibility, and documentation requirements.
This guide is an invaluable tool for understanding your rights and options. If you’re feeling stuck or unsure, the Klapper Group is here to help you make sense of it.
Real Estate Records Assistance for Fire Survivors
For fire survivors, recovering critical real estate records is essential for rebuilding and filing insurance claims. The Los Angeles County Registrar-Recorder/County Clerk’s Office provides key services to support those affected:
- Record Replacement: Obtain certified copies of deeds, mortgages, liens, and other essential property records.
- Online and In-Person Services: Records can be accessed online or at local offices. Some fees may be waived for disaster survivors. Be sure to ask and/or identify yourself as a fire survivor.
- Assistance with Lost Documents: Staff are available to help locate and replace missing or damaged records.
For detailed instructions, visit the LA County Registrar-Recorder’s website or contact their office directly.
For fire survivors, recovering critical real estate records is essential for rebuilding and filing insurance claims. The Los Angeles County Registrar-Recorder/County Clerk’s Office provides key services to support those affected:
- Record Replacement: Obtain certified copies of deeds, mortgages, liens, and other essential property records.
- Online and In-Person Services: Records can be accessed online or at local offices. Some fees may be waived for disaster survivors.
- Assistance with Lost Documents: Staff are available to help locate and replace missing or damaged records.
For detailed instructions, visit the LA County Registrar-Recorder’s website or contact their office directly.
Get in Touch
If you need personalized assistance or prefer calling to utilizing the internet, here’s how to get in touch with the Tax Assessor’s office:
• Email: [email protected]
• Phone: (213) 974-8658
• Website: assessor.lacounty.gov/tax-relief
The Klapper Group is here as a trusted partner throughout your recovery. Whether it’s understanding tax relief, completing forms, or connecting with experts, we’re just a call or email away. We understand that relief may not erase the hardship, but it can ease the financial burden as you recover. Together, we’ll navigate this and rebuild Los Angeles stronger than ever.