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Filing Deadline for Individual Tax Return April 18, 2023*

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IMPORTANT REMINDER Tax Deadline is April 18, 2023. Normally the tax deadline is April 15th but this year Emancipation in Washington DC is April 16th (Sunday) so it will be celbrated Monday April 17th

Imporant tax deadline can not fall on weekend or holiday so taxes for Individuals Taxes or Extensions are due April 18, 2023.

*certain people impacted by natural disaster have had their tax deadlines extended. Please contact us immediately to see if you qualify for this additional natural disaster extension.

Per the Governor of California Gavin Newsom’s Office

TAX EXTENSION

To help alleviate some of the stress many have endured during this trying period, the FTB has extended the filing and payment deadlines for individuals and businesses in California until May 15, 2023.

This relief applies to deadlines falling on or after January 8, 2023, and before May 15, 2023, including the 2022 individual income tax returns due on April 18 and the quarterly estimated tax payments, typically due on January 17, 2023 and April 18, 2023.

The IRS announced tax relief for Californians affected by these winter storms. Taxpayers affected by these storms qualify for an extension to May 15, 2023 to file individual and business tax returns and make certain tax payments. This includes:

  • Individuals whose tax returns and payments are due on April 18, 2023.
  • Quarterly estimated tax payments due January 17, 2023 and April 18, 2023.
  • Business entities whose tax returns and payments are due on March 15, 2023

In addition, FTB will suspend the mailing of collection notices to affected taxpayers for the next 30 days, beginning January 13, 2023.

Here is a link to find more information on  FTB Publication 1034, 2022 Disaster Loss: How to Claim a State Tax Deduction

https://www.gov.ca.gov/2023/01/13/tax-relief-for-californians-impacted-by-storms

IRS Guidance on Home Office Tax Deduction

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PER the IRS: If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. 

If you are a contractor / self employed / Partner (K1), then you better pay attention to this important tax deduction.

This year when you go to file your taxes make sure to bring the following information related to your home office.

  • Rents Paid*
  • Mortgage Interest Paid
  • Real Estate Taxes Paid
  • Insurance Paid *
  • Utilities*
  • Repairs*
  • Association Dues*
  • Maintenance*
  • Travel*
  • Legal & Professional*
  • Commissions*
  • Management Fees*
  • Bank Charges*
  • Advertising*
  • Depreciation

*We do not need to see the support documents for most of these items, BUT you must keep for your records in case of audit. PLEASE only provide the summarized annual total spent per category. If you need us to review your support documents there could be additional charges.

The tax preparer will calculate the greater tax benefits between the 2 alllowable methods to calculate your home office deduction.

Method 1 = Simplified option + For tax year after 2012 per the IRS Revenue Procedure 2013-13, certain taxpayers qualify to take a prescribed rate multiplied against square feet to calculate the home office deduction instead of the Regular Method. This simplified method greatly reduces the need for substantiation and record keeping and can be easily calculated.

Method 2 = Regular Method + For tax year 2012 and prior, the regular method allows taxpayers to take a business use % of the total home expenses plus and direct expenses. This method requires a lot more record keeping and substantiation.

Let us know if you have any question on your taxes for your Schedule C sole propreitor business expenses or Schedule E passhtrough partnership unreimbursed expenses.

We’re here to help you along the way; meet your new CPA today.

You’ll want to read this if you sold stocks last year

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Important: If you sold stocks or bonds last year in 2022 you will be receive an important tax document(s) starting in February 2023 (i.e. 1099-B, 1099-Div, 1099-Int, etc.) . You must bring these tax documents when you are ready to file your 2022 tax return. If you do not bring these documents it could delay your tax return filing and refund.

A broker or barter exchange must file this form for each person:

  • For whom, they sold stocks, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc., for cash,
  • Who received cash, stock, or other property from a corporation that the broker knows or has reason to know has had its stock acquired in an acquisition of control or had a substantial change in capital structure reportable on Form 8806, or
  • Who exchanged property or services through a barter exchange.

IRS 2023 Mileage rates

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Per IR-2022-234, December 29, 2022

WASHINGTON — The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.
These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Taxpayers can use the standard mileage rate but generally must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Notice 2023-03PDF contains the optional 2023 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2023 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

IRS issues new guidance ahead of the upcoming 2023 tax season expected to start January 23, 2023.

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Important Reminders:

  • Have all your tax information organized BEFORE you go to file your tax return
  • File a complete and accurate tax return to avoid unnecessary delays and/or penalties. Especially if you received 1099’s or Advance Payment of Credits
  • File electronically and or use direct deposit to speed up your refund. Most refunds will be issued in less than 21 days
  • Dont rush – make sure you don’t overlook eligible Deduction or Credits
  • Low-income or Elderly taxpayers can file for free with  Volunteer Income Tax Assistance and Tax Counseling for the Elderly or  Free File 
  • The filing deadline to submit 2022 tax returns or an extension to file and pay tax owed is Tuesday, April 18, 2023, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way as federal holidays. The due date is April 18, instead of April 15, because of the weekend and the District of Columbia’s Emancipation Day holiday, which falls on Monday, April 17. Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.
  • Most income is taxable unless you provided basis, deductions, exemptions, etc

Key filing season dates (individuals)

There are several important dates taxpayers should keep in mind for this year’s filing season:

  • January 13: IRS Free File opens
  • January 17: Due date for tax year 2022 fourth quarter estimated tax payment.
  • January 23: IRS begins 2023 tax season and starts accepting and processing individual 2022 tax returns.
  • January 27: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
  • April 18: National due date to file a 2022 tax return or request an extension and pay tax owed due to the Emancipation Day holiday in Washington, D.C.
  • October 16: Due date to file for those requesting an extension on their 2022 tax returns.

You can read the full IRS press release here