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With firefighters still battling to contain the wildfires that have scorched neighborhoods across Los Angeles, victims have barely started to come to terms with their losses. On top of the deep personal toll, they’ll face a maze of financial and logistical hurdles as they plot their next steps. That includes the challenges of submitting insurance claims, calculating taxes and rebuilding homes.
Here is a quick primer on some key financial matters for people in affected areas, especially those who have been directly impacted. For all the issues below, your Private Wealth Advisor can help you understand your situation and can walk you through potential options to discuss with your outside tax and insurance professionals.
As always, you should consult with your tax and legal advisors to discuss whether these ideas make sense for your specific situation.
Insurance claims: For many victims, filing an insurance claim may be a logical first step. Keep track of any expenses incurred since evacuating your home, such as hotels and meals, which could be covered by insurance. Keep records of all conversations with insurers and ask if additional information is needed. A good resource is the California Department of Insurance, which can be contacted at (800) 927-4357.
Property tax relief: In Los Angeles County, property owners suffering damage may be eligible for property tax payment deferrals without penalty or interest. You can also ask for property tax reassessment, which can lower the taxes due. Generally, the reassessment will only apply to structures that are damaged or destroyed and not to the value of the land itself. The forms requesting relief must be filed within 12 months of the event. More information, including the necessary forms, can be found on the Los Angeles County Assessor’s website.
Mortgage payments: In the event of major disasters, mortgage lenders may permit the forbearance of payments but keep in mind that this is typically a temporary postponement only; principal and interest will still be owed to the lender. Contact your mortgage lender to understand your options.
Income taxes: Due to the wildfires, many L.A. County residents have been given extra time to file federal tax returns and make corresponding tax payments. Generally, the deadline for federal tax returns and payments has been extended to October 15, 2025. Relief is also available for quarterly estimated tax payments. Details are available at irs.gov.
California has announced that the state will offer similar relief for both returns and tax payments owed by L.A. County residents. Those details can be accessed at ftb.ca.gov. You should also consult with your tax advisor to confirm that your situation qualifies prior to relying on any extension.
Possible income tax deductions for losses
Statements and forms: To continue getting important physical mail that may include information needed for tax purposes, consider getting a P.O. Box and asking the postal service to forward mail to it. Also, you may want to use this P.O. Box as your mailing address on all forms you fill out.
Naturally, these financial issues entail a great deal of complexity. Your Private Wealth Advisor is always available to help you think through options, as well as connect you with tax professionals, as you navigate this challenging period.