Southern California's wildfire victims now have some tax relief in the form of extensions on their federal tax return filing and payment deadlines and waivers of certain penalties and fees.
Similar relief is available from California's tax collectors.
Residents in the presidentially-declared disaster areas of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura counties are eligible.
Wildfires raging in the SoCal area for more than a week, killed 14, destroyed nearly 2,000 homes, scorched more than 500,000 acres and led to five arson arrests. By Oct. 30, 16 fires were contained and seven active fires remained, down from more than a dozen at the peak of the conflagration.
Wildfire victims earlier received notice of federal housing, rebuilding, mortgage and foreclosure relief, among other assistance.
The extended federal tax deadline applies to items due on or after Oct. 21, 2007 when wildfires began and gives eligible residents until January 31, 2008 to file returns, pay taxes due and perform other time-sensitive acts.
This includes the federal withholding tax return, Form 941, normally due Oct. 31, and the estimated tax payment for the fourth quarter (say for those with a home-based or other business), normally due Jan. 15.
Affected taxpayers in a presidentially declared disaster area also have the option of claiming disaster-related casualty losses on their federal income tax return for either this year (filed next year) or last year, by filing an amended return.
IRS Publication 547, "Casualties, Disasters and Thefts" explains how to figure a casualty loss deduction.
Affected taxpayers claiming the disaster loss on last year's return only should put the Disaster Designation "California Wildfires" in bold red ink at the top of the form so that the IRS can expedite the processing of the refund.
Including the designation isn't necessary for tax returns filed at the normal time, say next year for this year's taxes and losses, because the IRS computer systems automatically identify taxpayers located in official disaster areas and apply automatic filing and payment relief.
If any affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply during the period from Oct. 21, 2007, to Jan. 31, 2008. Penalties or interest is not waived for taxpayers who don't have a filing, payment or deposit due date, including an extended filing or payment due date, during this period.
California's Franchise Tax Board, charged with administering state personal income tax and other levies, also offers the option of filing an amended return for casualty losses or including the loss in this year's tax return. The state form providing more information is "FTB Pub. 1034: Disaster Loss."
California's Board Of Equalization, charged with administering the state's property, sales and use taxes, among others, is providing an extended deadline of one month on tax filing and payment deadlines and relief from some penalties and interest due to late filing by eligible taxpayers. Additional information is available on the board's "Disaster Relief -- Frequently Asked Questions (FAQ)" Web page.
Free copies of past tax returns are also available from the IRS and state tax offices.