California Tax Deadline 2023: time, dates and when is the deadline to file taxes
The massive wave of storms that have hit California led the state to extend its tax filing deadline. When it is, and are all eligible for the extension?
California has been hammered by storms caused by a weather phenomenon known as an atmospheric river that dumps rain and snow across the state for days at a time. In a state that has been experiencing a historic mega-drought for the past two decades, such severe rain has left areas devastated and killed at least 22 people.
In response, the Golden State has decided to extend tax season for residents of hard-hit countries, giving filers in those areas more time to submit their returns without facing penalties. The IRS followed California, meaning taxpayers will have until 15 May to submit their state and federal tax returns.
Govenor Gavin Newsom described the extension as a way to support residents get “back on their feet and help communities recover.”
Who qualifies for the extension?
The extension applies to over 40 of the state’s 57 countries. Residents of the ten largest counties in the state, in terms of population, are all eligible.
Which counties are eligible for a filing extension?
Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo and Yuba
In addition to the traditional income tax return, those who submit quarterly estimated tax payments to the IRS will have until 15 May to provide the reports due on 17 January and 18 April. Most businesses have submitted their tax returns and payments back on 15 March. However, firms located in one of California’s affected countries will have until 15 May to get their finances in order.
How do I claim disaster losses on my tax return?
If the President of the United States declares a state of emergency due to a natural disaster, residents who incur losses can deduct them on their tax return. Using the IRS’ federal Form 4684, taxpayers must determine their “personal loss by using the smaller of the decrease in the fair market value of your property due to casualty or the adjusted basis of the property.”
What does the IRS mean by “fair market value”?
When calculating the “fair market value,” the IRS says they are looking for the “amount at which property would change hands between a willing buyer and seller.” On the other hand, the “adjusted basis” includes “what you paid for the property plus the cost of any improvements, less deductions such as depreciation.”
To determine your deduction, you will first need to “deduct insurance proceeds or other reimbursement you received or expect to receive” and then subtract $100 and “10% of your federal adjusted gross income.” The value calculated is the amount you can claim “as your casualty or disaster loss.”
If you are submitting a paper return, then the state advises the taxpayer to “write the name of the disaster in blue or black ink at the top of their tax return to alert FTB.” For those that plan to submit electronically, there will be a dedicated space where this information can be reported through the software.