FIRE RECOVERY | figueroa-cpa

FIRE RECOVERY UPDATES

Affected by the fires?

Below is information you may find helpful as you navigate through the recovery process.

Income Tax:

The Internal Revenue Service and California Franchise Tax Board announced tax relief for fire victims in Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba counties. Affected taxpayers will have until January 31, 2018 to make their fourth estimated tax payment normally due January 16, 2018. Please note: as we prepare year-end tax plans I may recommend that you pay your fourth California payment on or before December 31, 2017, if advantageous to you.

Affected taxpayers who’s tax return was on extension and had tax returns due October 16, 2017 now have until January 31, 2018 to file. However, because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.

Property Tax:

For damaged properties, the property value can be reappraised in the current condition, with some taxes refunded to the property owner if already paid for the current period. Once rebuilt, the property’s pre-damaged value will be restored. To qualify, you must file a claim with your county assessor’s office within 12 months from the date of damage. The loss estimate must be at least $10,000 of current market value to qualify the property for this relief. I would do this at your earliest convenience since they will be receiving many claims, as you can imagine.

You can download the Calamity Damage Reassessment form here.

This property tax relief is available to owners of real property, business equipment and fixtures, orchards or other agricultural groves, and to owners of aircraft, boats, and certain mobile homes. If any business property was damaged, please apply for business reassessment as well.

Additionally, if your property has been substantially damaged or destroyed in a Governor-proclaimed disaster and you have filed a disaster relief claim with the county assessor to reduce your taxes, you may file a claim to postpone the next installment of property taxes that occurs immediately after the disaster. If you file a "property tax deferral claim" with the county assessor before the next property tax installment payment date, that payment will be postponed without penalty or interest until the county assessor has reassessed the property, and you receive a corrected tax bill. Note: tax deferral is not available where property taxes are paid through impound accounts.

FEMA Assistance:

FEMA is asking all fire victims to file an insurance claim as soon as possible. However, they are also offering federal grants (which don’t have to be repaid) and low-interest loans to cover uninsured fire related expenses or costs that exceed coverage limits.

This assistance is available to people and businesses. The application deadline is Dec. 11 for Sonoma County, Dec. 12 for Napa County, and Dec. 13 for the other counties designated on Saturday. To apply, go to DisasterAssistance.gov or call (800) 621-3362. It appears the Small Business Administration (SBA) is handling disaster loans to businesses and home owners. However, I recommend you start with FEMA and they will refer you to SBA.

Unemployed due to fires:

Sonoma County Job Link can answer questions about unemployment insurance for those whose jobs have been affected by the fire. Information can be reached at http://sonomawib.org.

If you are temporarily not working due to the fires apply for unemployment here

Red Cross:

It is essential that you register with the Red Cross, whether you stay at the shelter or not they should register you as evacuated.

Essential Documents:

Keep all documentation on any claims or assistance you are applying for. Please label it and file it as you get it.

Essential documents should be replaced for free. State of California can help you with birth certificates in and outside of California.

Prescriptions:

Prescriptions are replaced free by your pharmacy by law in declared disasters. FEMA will pay for lost medical equipment, but your doctor may be able to replace it quicker with a new prescription for which FEMA should reimburse.

Insurance:

California Department of Insurance is assistance victims with insurance claims

Donate:

Redwood Credit Union North Bay Fire Relief
Redwood Credit Union (RCU), in partnership with RCU Community Fund, The Press Democrat, and Senator Mike McGuire, are now accepting financial donations to aid relief efforts and assist victims of the 2017 North Bay fires. 100% of your tax-deductible donations will go directly to support those affected by the fires.

www.redwoodcu.org/northbayfirerelief

Additional Resources:

For additional resources please refer to www.sonomafireinfo.org

The following information was provided by a colleague, who lost his home to a fire in Ukiah earlier this year. Hopefully this information will be helpful to those affected.

Overall, I think the correct philosophy is you are building a team to handle the situation, not trying to do it all by yourself. There will be ups and downs and having people to get you through the rough times is crucial. My recommendations would be as follows.

Get a lawyer to assist you. They don’t need to do everything, but should be there for advisement no matter how rational you feel right now.

Start a very detailed list of personal property. It will take a while, but list it room by room. When you submit the list reserve the right to submit additional items. Know that the insurance company will pay fair market value initially (low amount), but as you replace items and keep the receipts they will pay replacement value (higher amount).

If your insurance broker can’t supply someone to articulate the coverages, contract with an insurance specialist to assist you. The coverages read like IRS code and the insurance company is not always inclined to interpret them in your favor. Our policy limit expanded the more we examined the coverages and educated ourselves.

I would be cautious in taking money from the insurance company initially if not necessary. In the same vein, I would not recommend replacing anything too soon. I am not recommending anyone go without essentials, but merely that there is a recognition you will be replacing items for a long time and having some flexibility in the future is valuable.

My insurance company contracted with a relocation company that found a rental, provided rented furniture, appliances, etc. They were very professional and fast. I think that will be much harder under current situations, but you should be provided an equivalent rental location, furniture, etc. under most coverages.

When searching for a contractor look for someone that is willing to advocate for you with the insurance company. There will be a lot of aspects to rebuilding with insurance funds that are different than with private funds and both parties should understand that going in.