Don't Mess With Taxes

Updated Tuesday, October 17, 2023

The Internal Revenue Service's surprise announcement came on what was Tax Day for millions of Golden State taxpayers who earlier got additional federal filing time due to major disasters. State officials have followed suit, extending California's due date, too. In addition, the IRS last week gave U.S. taxpayers living in Israel almost a year to take care of a variety of current tax obligations.

Storms across California earlier this year produced widespread flooding and other disastrous conditions. That prompted federal relief, including extended tax deadlines. Today, the IRS gave Golden State taxpayers another month to meet federal tax obligations. (Unsplash+ in collaboration with Levi Meir Clancy)

Talk about last minute. The Internal Revenue Service today announced that most California taxpayers, who already had their 2022 filing deadline (and more) pushed to Oct. 16 (yep, today), now get another month.

Disastrous weather prompted the original postponement. The IRS relief was based on three different Federal Emergency Management Agency (FEMA) declarations covering severe winter storms, flooding, landslides, and mudslides over a period of several months.

Now taxpayers in 55 of California's 58 counties qualify for the additional month. Those who don't get the extra tax time live or have businesses in Lassen, Modoc, and Shasta counties.

As long as Golden State residents' address of record is in a disaster-area locality, individual and business taxpayers automatically get the extra time, without having to ask for it.

As for state tax filings, the California Franchise Tax Board (FTB) has followed the IRS' decision. It has confirmed that most residents now have until Nov. 16 to file and pay their state tax year 2022 returns and any due taxes.

Tax tasks that qualify for the Nov. 16 deadline: Californians who've been operating under the prior tax relief announcement probably know what's covered. But it never hurts to be sure about the wide array of tax filings and payments that now are postponed until Nov. 16.

The federal tax obligations that now are not due for another month include —

• 2022 individual income tax returns and payments normally due on April 18.
• For eligible taxpayers, 2022 contributions to IRAs and health savings accounts (HSAs).
• Quarterly estimated tax payments normally due on April 18, June 15, and Sept. 15.
• Calendar-year 2022 partnership and S corporation returns normally due on March 15.
• Calendar-year 2022 corporate and fiduciary income tax returns and payments normally due on April 18.
• Quarterly payroll and excise tax returns normally due on May 1, July 31, and Oct. 31.
• Calendar-year 2022 returns filed by tax-exempt organizations normally due on May 15.

Disaster claim options: As noted in my original California disaster relief post, eligible taxpayers in officially declared major disaster areas have the option to claim any uninsured losses as a tax deduction.

Affected filers also get to decide on the tax year you use to make the claims. You can find more on whether and when to file in my post on considerations in making a major disaster tax claim

But I do want to reiterate for the majority of California filers that when it comes to determining whether to count storm losses on your 2022 return you now have until Nov. 16 to claim then on your 2022 return, or wait and claim the damages on your 2023 filing next year. Run the numbers for both tax years carefully so that you use the one that produces the better tax results.

Claiming disaster losses as itemized deductions on the prior year filing could get you tax refund money this year that you can use toward repairs. Or you might get a bigger refund if you wait and claim it on the return for the year in which the damages actually occurred.

In either case, all tax and financial factors need to be examined, such as your current and last year's tax bracket, and any other deductions you may be able to claim in either year.

Making the filing year decision will take some time and added calculations, but the difference could be substantial. So don't rush it. And get some professional tax help if you need it.

Other disaster area tax extensions: Now also is a good time to remind taxpayers in seven other states hit by major disaster areas of their later deadlines.

Oct. 31 is the new deadline for Alaska and Illinois taxpayers in areas struck by storms and flooding earlier this year.

Vermont taxpayers who endured statewide flooding have until Nov. 15.

And Feb. 15, 2024, is the new deadline for

• Florida, Georgia, and South Carolina taxpayers in Hurricane Idalia's path;

• Hawai'i's Big Island and Maui taxpayers who endured wildfires; and
• Louisiana residents in greater New Orleans who are dealing with the effects of saltwater intrusion in the Mississippi River.

Note, too, that members of the military serving in combat zones can get an extra 180 days from their last day in those dangerous areas to file their tax returns. You can get more information at the IRS web page on combat zone service extended deadlines and IRS Publication 3, Armed Forces Guide to Taxes.

More international tax relief: Civilians also are affected by horrific international events, and Uncle Sam takes that into consideration when it comes to such things as taxes.

That's the case for U.S. taxpayers in Israel. The IRS has announced tax relief for individuals and businesses affected by the terrorist attacks there.

These Israel-located taxpayers now have until next October — specifically until Oct. 7, 2024 — to file various federal returns, make tax payments, and perform other time-sensitive tax-related actions that they otherwise may not be able to meet due to the conditions there.

Qualifying taxpayers include —

• Any individual whose principal residence or business entity or sole proprietor whose principal place of business is in Israel, the West Bank, or Gaza.
• Any individual, business or sole proprietor, or estate or trust whose books, records or tax preparer is located in the covered area.
• Anyone killed, injured, or taken hostage due to the terrorist attacks.
• Any individual affiliated with a recognized government or philanthropic organization and who is assisting in the covered area, such as a relief worker.

The tax relief generally applies to tax deadlines on or after Oct. 16, 2023, and before Oct. 7, 2024.

Details are in the tax agency's news release, as well as IRS Notice 2023-71. The IRS says it will continue to monitor events, and may provide additional relief.

You can read more about making major disaster loss tax claims in IRS Publication 547. The IRS' Disaster Assistance and Emergency Relief for Individuals and Businesses page also has more information on returns, payments, and tax-related actions for qualifying taxpayers.

Finally, you also might find these earlier blog posts of interest:

• Picking up the pieces after a major disaster
• Document your property for tax, insurance claims before storms hit
• Storm Warnings: Preparing for, recovering from, and helping those affected by natural disasters

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