California and IRS Provide Tax Relief to Citizens of Los Angeles County Following Wildfires
California and IRS Provide Tax Relief to Citizens of Los Angeles County Following Wildfires
As citizens of Los Angeles start the long process of rebuilding and returning to normalcy following the tragic wildfires of January 2025, both the Internal Revenue Service (IRS) and California’s Franchise Tax Board (FTB) have stepped in to provide some relief to affected individuals and businesses.
The IRS announcement and FTB announcement postponed most tax filing and payment deadlines occurring from January 7, 2025, through October 15, 2025. Individuals and businesses based in Los Angeles County now generally have until October 15, 2025, to file their 2024 tax returns or make estimated payments. So, individuals who would otherwise need to file and pay their 2024 taxes by April 15, 2025 now have an automatic six-month extension for their state and federal taxes. These extensions automatically apply to any individual with a principal residence in Los Angeles County and any business with a principal place of business in Los Angeles County – there is no need for taxpayers to prove anything to the IRS or FTB. Note that the FTB did not automatically suspend payments due via installment agreement.
Additionally, individuals and businesses who suffered uninsured or unreimbursed losses related to the fires may claim a disaster loss in either tax year 2024 or 2025 under Internal Revenue Code section 165. Such losses are generally allowed as a deduction against taxable income, subject to some limitations. Because the Los Angeles fires are a federally declared disaster, taxpayers may be able to deduct qualifying losses even if they claim the standard deduction. Due to the deadline extension, taxpayers will generally have until October 15, 2025, to decide in which year to claim these losses.
For more specific questions on how the FTB and IRS announcements might impact Los Angeles County taxpayers in 2025, please reach out to the Hanson Bridgett Tax Group.
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