The Eaton & Palisades fires affected almost everybody in Los Angeles County, either waking up in the morning to smoke and ash or finding out that their home is gone or has severe smoke damage. All of Los Angeles County was declared a Presidential Disaster Area on January 8, 2025. When an area is declared a disaster area by the president, the IRS extends the filing deadline. All of Los Angeles County residents 2024 tax returns have been extended until October 15, 2025, including payments and estimates that are normally due on April 15, June 15, and September 15.
If you do have a balance due and do not pay by April 15, you will receive a letter in June or July stating that your balance due is late, this letter will go out to the entire country that has a balance due. A couple of weeks later, the IRS will mail another letter stating that you live in LA country and your payment is due Oct 15.
In 2018, the IRS stopped allowing theft and loss deductions unless under certain circumstances. One of those circumstances is if you reside in a Presidential Declared Disaster Area. There are a few rules, but if you had any losses due to the January 7 winds or the fires, you may be able to deduct some of your losses on your 2024 or 2025 tax return.
Here is how the IRS explains it:
“Personal casualty losses are losses from casualty, disaster, and theft that are not connected to a trade or business, or a transaction entered into for profit. Generally, if the loss is caused by a federally declared disaster, you may deduct personal casualty losses relating to your home, household items, and vehicles on your federal income tax return. For tax years 2018 through 2025, personal casualty losses are otherwise not deductible. A theft loss deduction is generally available, however, if the loss is due to theft related to a transaction entered into for profit, you may not deduct casualty and theft losses covered by insurance, unless you file a timely claim for reimbursement, and you reduce the loss by the amount of any reimbursement or expected reimbursement.”
If you or somebody that you know had a loss due to this disaster, they should contact their tax professional on the best way to handle their taxes. If you would like to learn about Casualty, Disaster and Theft Loss, you can look up IRS Topic Number 515.
