As you’ve probably heard, San Diego was “under fire” –literally- last week. You may not know that TurboTax’s headquarters is in San Diego so many of the employees were affected by the fire. It seems that everyone knows someone whose home was damaged or destroyed. The headquarters received soot and smoke but no real damage. My subdivision lost over 10 homes but my home, luckily, was spared.
We, in San Diego, are proud of our firefighters, police, and all who helped save homes and people and contain the fire.
It didn’t take long for the President to declare the Southern California area as a major federal disaster. In addition to making individuals, businesses, and communities eligible for federal funding, there is usually tax relief from the IRS. And it was granted yesterday.
For the California fire disaster areas, any IRS tax deadlines between October 21, 2007 and January 31st, 2008, are extended to January 31st. For individual taxpayers, the most affected deadline is 4th quarter estimate due on January 15th. It’s now January 31st.
Affected taxpayers also have the option of claiming their 2007 disaster-related casualty losses on their 2007 tax return or amending their 2006 tax return with the 2007 losses. By amending the 2006 return, refunds are received quicker since the IRS expedites such amended returns (time frame is generally 60 days).
For details on handling such casualties, see IRS’ FAQs for Disaster Victims. Also included on this website are links on how to obtain prior returns and change your address with the IRS.
The California Franchise Tax Boards announced similar tax relief. See Southern California Fire Victims Can See Tax Relief.
Handling such casualties can be complex. The tax treatment on personal property losses is not the same for business property. Also determining the value of losses can be complex. Keep checking our support site… our plan is to add helpful articles when dealing with such disasters.