Extensions, credits, free filing: Here’s what Sonoma County residents need to know for doing taxes this year

The April 18 deadline to file taxes is just around the corner for most Americans, but the impact of strong winter storms across California has pushed the deadline to October for those affected.

But when it comes to the annual filing, some Sonoma County residents aren’t taking advantage of credits available to them.

Data from the California Policy Lab shows that 56% of Sonoma County residents were eligible but didn’t claim the California Earned Income Tax Credit in 2021, leaving $573,788 of these credits for low- to moderate-income residents unclaimed.

The data also found that 92% of eligible Californians who filed taxes and claimed the Federal Earned Income Tax Credit, but not the California Earned Income Tax Credit, used an in-person, paid tax preparer.

“People are really hurting financially ... and things are getting more expensive,” said Mandy Nand, economic mobility program manager of United Ways of California.

“A tax credit is going to help reduce what you owe back and then it’s going to put more money in your pocket.”

Here’s what else Sonoma County residents need to know about filing taxes this year.

Tax deadline extensions

After the winter storms in December and January, the Franchise Tax Board extended the filing and payment deadline for the state’s 2022 tax year to Oct. 16 for impacted Californians, including those in Sonoma, Marin, Mendocino and Lake counties.

A news release from the state said this move aligns California with the Biden administration, which announced that the IRS also extended tax deadlines for Californians’ federal tax submissions to Oct. 16.

“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,” Gov. Gavin Newsom said in the release.

Claiming storm loss

Sonoma County taxpayers can also get a deduction for disaster loss when filing either an original or amended 2022 state tax return, according to the state’s website.

Those filing a physical return should write the name of the disaster — in this case it would be “Disaster: Severe Winter Storms” — in black or blue ink at the top of their tax return to inform the Franchise Tax Board.

Taxpayers filing electronically should follow program instructions to enter disaster information on their return.

Tax credits

The prices of basic essentials increased throughout 2022, with the price hikes making it more difficult for some Sonoma County residents to buy groceries or pay rent and bills.

Many qualified Sonoma County taxpayers are unaware of tax credits and free file programs that can help ease the stress of tax season, Nand said.

A tax credit is a dollar amount that qualifying taxpayers can directly subtract from the taxes they owe, such as the Earned Income Tax Credit and the child tax credit.

There are a wide range of tax credits, including for earned income, the number of children in a household and for being a full-time student.

The Foster Youth Tax Credit is one of the newer tax credits, created for current or former foster youth who were between the ages of 18 and 25 at the end of the 2022 tax year.

A full guide to available tax credits can be found on United Ways’ website.

Nand said taxpayers miss out on hundreds of dollars simply because they don’t know how to access them.

“We don't want people to forfeit a portion of that refund ... which is why we focus so heavily across the state and helping people file their taxes for free,“ Nand said.

“They (volunteer income tax assistance and free tax prep programs) are fully aware of all of the tax credits that are available to us and they're going to make sure they get every single tax credit that belongs to you.“

Nand said the self-filing option for taxpayers will have instructions on how to double-check for tax credits taxpayers are eligible for. In-person and virtual help preparers through United Ways will also know whether tax credits can be applied.

Free-file programs

There are multiple tax software platforms, like TurboTax and FreeTaxUSA, that make filing online more convenient and sometimes at no cost.

Some programs can be costly, such as TurboTax, which starts at $54 to file federal and state taxes. There are more affordable options, like FreeTaxUSA, which doesn’t charge to file federal taxes and charges $14.99 for each state tax filing.

Taxpayers making less than $60,000 annually can use United Ways’ Free Tax Preparation program, an in-person tax filing option guided by a volunteer trained and certified by the IRS.

It’s United Ways’ most popular option, Nand said.

There are seven in-person locations to access the program in Sonoma County. It’s also offered virtually at myfreetaxes.org, where taxpayers can connect with one of the trained and certified volunteers over email or on the phone to file or even file on their own.

To file virtually with help, taxpayers must meet the following criteria:

• Income at or less than $66,000 ($60,000 for filing with in-person help).
• No rental income from a property the taxpayer owns.
• Did not file for bankruptcy in 2022.
• Had no cancellation of debt outside of non-business credit cards.
• No clergy income.
• If married and are filing jointly.
• Had no self-employment income with business-related expenses over $35,000 or businesses with employees, inventory or business property.

Taxpayers with incomes at or under $73,000 can use the “File on my own” option through TaxSlayer, a tax filing software available online. Nand said United Ways has guides and YouTube videos that walk taxpayers through the self-filing process.

“We want to change that misconception that filing taxes is scary so we’re trying to make things easier as much as we can,” she said.

“We focus heavily on helping people file their taxes for free across the state of California, so it’s very important for us that people get to keep 100% of their refund.”

AARP also offers free tax assistance nationwide with at least nine in-person assistance locations across Sonoma County.

There are no income or age limits to use the service and the taxpayer doesn’t have to be an AARP member to access this service, according to the AARP Foundation Tax-Aide Program website, but its focus is on taxpayers who are over age 50 and have low to moderate income.

“AARP Foundation Tax-Aide has provided free tax assistance to millions of low-income Americans for more than 50 years,” Lynnette Lee-Villanueva, vice president of AARP Foundation Tax-Aide, said in a news release.

“Even modest refunds are a lifeline for older adults, many of whom live on a fixed income, and it’s crucial they do not miss out on the credits and deductions they have earned and need.”

Middle Class Tax Refund

The Middle Class Tax Refund was a one-time inflation relief payment for California taxpayers announced back in October to help cover basic necessities such as rent, groceries and gas.

The IRS announced in February that recipients do not have to claim this one-time payment on their 2022 federal tax returns.

The IRS said in a news release that taxpayers who choose not to claim this payment on their 2022 tax returns will not be challenged by the IRS.

You can reach Staff Writer Sara Edwards at 707-521-5487 or sara.edwards@pressdemocrat. com. On Twitter @sedwards380.