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California Conforms to IRS: More Time to File State Taxes for Californians Impacted by Winter Storms

SACRAMENTO – In addition to tax relief measures that Governor Gavin Newsom announced in January, California is also extending the state tax filing and payment due dates to October 16, 2023 for Californians impacted by the winter storms in December and January. This aligns California with the Biden Administration, which announced that the IRS extended various due dates until October 16, as well.

“As communities across the state continue recovering from the damage caused by the winter storms, California is working swiftly to help recovering Californians get back on their feet,” said Governor Newsom. “The state is aligning with the Biden Administration and extending the tax filing deadline in addition to the tax relief announced earlier this year.”

Last month, Governor Newsom announced tax relief for those impacted by winter storms, giving people the ability to claim a deduction for disaster loss and extending certain filing deadlines.

The following counties are eligible for this extended tax relief, per the IRS announcements here and here:

Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, […]

By Linkenheimer LLP|2023-03-07T19:48:04+00:00March 3rd, 2023|CA tax, california, disaster, filing deadline, ftb, irs, New Tax Laws|0 Comments

California Conforms To IRS Filing Extensions For California Storm Victims

The Governor’s office has announced that California will conform to the filing extensions granted by the IRS for California storm victims. This means the FTB has extended filing and payment deadlines for many individuals and businesses in California until May 15, 2023.

This relief applies to the following deadlines falling on or after January 8, 2023, and before May 15, 2023:

Individual income tax returns;
Business return filings normally due between March 15 and April 18, 2023;
Fourth and first quarter estimated tax payments due on January 17, 2023, and April 18, 2023. Individual taxpayers can skip making the fourth quarter estimated tax payment and instead include it with the 2022 return as long as the return is filed on or before May 15, 2023;
IRA and health savings account (HSA) contributions; and
Quarterly payroll and excise tax returns, normally due on January 31, 2023, and April 30, 2023.

Below is the complete press release from the Governor’s office:

SACRAMENTO – Californians impacted by winter storms are now eligible to claim a deduction for a disaster loss and will have more time to file their taxes.

“Whether it’s more time to file your taxes or getting a deduction, this […]

By Linkenheimer LLP|2023-01-16T18:32:49+00:00January 16th, 2023|ca, CA tax, california, disaster, ftb, irs, tax deadlines|0 Comments

IRS Announces Tax Relief For Victims Of Winter Storms In California

Victims of severe winter storms, flooding, and mudslides in California beginning January 8, 2023, now have until May 15, 2023, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today.

Following the disaster declaration issued by the Federal Emergency Management Agency, individuals and households affected by severe winter storms, flooding, and mudslides that reside or have a business in 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 counties qualify for tax relief.

The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after January 8, 2023, and before May 15, 2023, are granted additional time to file through May 15, 2023. As a result, affected individuals and businesses will have until May 15 to file returns and […]

By Linkenheimer LLP|2023-01-16T18:17:48+00:00January 16th, 2023|ca, CA tax, california, disaster, irs|0 Comments

Intangible Assets: How Must The Costs Incurred Be Capitalized?

These days, most businesses have some intangible assets. The tax treatment of these assets can be complex.

What makes intangibles so complicated?

IRS regulations require the capitalization of costs to:

Acquire or create an intangible asset,
Create or enhance a separate, distinct intangible asset,
Create or enhance a “future benefit” identified in IRS guidance as capitalizable, or
“Facilitate” the acquisition or creation of an intangible asset.

Capitalized costs can’t be deducted in the year paid or incurred. If they’re deductible at all, they must be ratably deducted over the life of the asset (or, for some assets, over periods specified by the tax code or under regulations). However, capitalization generally isn’t required for costs not exceeding $5,000 and for amounts paid to create or facilitate the creation of any right or benefit that doesn’t extend beyond the earlier of 1) 12 months after the first date on which the taxpayer realizes the right or benefit or 2) the end of the tax year following the tax year in which the payment is made.

What’s an intangible?

The term “intangibles” covers many items. It may not always be simple to determine whether an intangible asset or benefit has […]

By Linkenheimer LLP|2022-12-12T21:36:20+00:00December 12th, 2022|irs, small business|0 Comments

Worried About An IRS Audit? Prepare In Advance

IRS audit rates are historically low, according to a recent Government Accountability Office (GAO) report, but that’s little consolation if your return is among those selected to be examined. Plus, the IRS recently received additional funding in the Inflation Reduction Act to improve customer service, upgrade technology and increase audits of high-income taxpayers. But with proper preparation and planning, you should fare well.

From tax years 2010 to 2019, audit rates of individual tax returns decreased for all income levels, according to the GAO. On average, the audit rate for all returns decreased from 0.9% to 0.25%. IRS officials attribute this to reduced staffing as a result of decreased funding. Businesses, large corporations and high-income individuals are more likely to be audited but, overall, all types of audits are being conducted less frequently than they were a decade ago.

There’s no 100% guarantee that you won’t be picked for an audit, because some tax returns are chosen randomly. However, the best way to survive an IRS audit is to prepare in advance. On an ongoing basis you should systematically maintain documentation — invoices, bills, cancelled checks, receipts, or other proof — for all […]

By Linkenheimer LLP|2022-10-03T19:48:33+00:00October 3rd, 2022|audit, irs|0 Comments