Our State Is On Fire

Rick Walter, CPA
Latest posts by Rick Walter, CPA (see all)

I never really thought of the down side to having 80 degree plus days of hot sunny weather in our state. As a golfer, I only thought of what this means to me – leaving the umbrella behind and not checking the weather before I made plans to golf.

The devastation that has resulted in eastern Washington has made me feel a little guilty. The loss of life and property is overwhelming and my heart goes out to those affected by the uncontrollable flames.

During a conversation with Nick Sooy with Farmers Insurance, he indicated that only about 50% of the homeowners carry fire insurance. This was important to know since there were all these fund raising events going on to send money over to Chelan and other communities that were and continue to be affected. Our Rotary Chapter raised over $1,600 and will be sending it to help with the relief efforts.

So what does this have to do with taxes? There are a couple of connections to discuss.

First thing to remember is if you plan on taking a charitable deduction for your donation to the fire victims and responders, be sure you make that donation thru an organization that qualifies as a charity, a 501(c)(3).

A donation directly to a person or group of people – while a very nice thing to do – will not yield you a tax deduction on your return. There are many organizations assisting the needy during this time. The Red Cross, the local Rotary Foundations and any church should be qualified to accept your donation.

The other aspect of taxes is being able to claim a casualty loss on your return. If you had no insurance or were significantly under insured, there could be a tax deduction to claim for 2015. There are a ton of rules and limitations so contact your accountant once the damage has been assessed.

The thoughts and prayers of myself and our firm are with those of you who have been impacted by the fires directly or thru family members.

Our thanks go out to all of the agencies that have men and women on the fire line and in a support role for your tireless efforts.

Thanks for listening and I will talk at you again.

Author: Rick Walter, CPA

Rick Walter brings over 25 years of professional tax and accounting experience to Hutchinson & Walter. Specializing in small to mid-size business entities and start up organizations, Rick brings a deep understanding of the unique tax compliance and accounting issues specific to those entities.

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