Tax Season 2024: What California taxpayers need to know about filing this season

The countdown has begun to the deadline for filing state and federal income tax returns.

The IRS anticipates more than 128.7 million individual tax returns to be filed by this year’s April 15 deadline. A longer tax filing season occurred in 2023 because of the state’s record-breaking winter storms when the deadline was extended into November, according to the California Franchise Tax Board.

“The FTB recommends taxpayers gather their tax records ahead of time to help facilitate a smoother tax filing process," state controller and Franchise Tax Board chair Malia M. Cohen said in the release. "I encourage Californians to take advantage of the FTB's online services, including filing their taxes electronically and choosing direct deposit to a bank account for a quicker refund."

Here’s what else you need to know about filing taxes this year:

Direct-file systems available for taxpayers

Taxpayers in 12 states, including California, can use the new IRS Direct File pilot program to file their federal tax returns for free online in English and Spanish.

California taxpayers will not be able to file state returns using this program, according to the IRS website.

The program will allow eligible taxpayers to file their returns to the government directly without using commercial tax preparation software such as Intuit TurboTax. It should not be confused with the IRS Free File program.

The online program allows eligible taxpayers to add their tax information on a smartphone, computer or tablet with a step-by-step guide and ability to connect with online support from IRS customer service representatives.

Californians can file their state return through the Franchise Tax Board program CalFile. According to the state’s Franchise Tax Board website, CalFile allows taxpayers to e-file their state tax return directly to the Franchise Tax Board for free.

Eligible taxpayers must meet the following qualifications, among others listed on the Franchise Tax Board’s website:

• Taxpayer must be filing an original 2023 return
• Taxpayer must have been a California resident for the entire year
• Claiming 10 or fewer dependents
• Single or married/registered domestic partner filing separately adjusted gross income can be up to $237,035
• Heads of household can have an adjusted gross income of up to $355,558
• Married/registered domestic partner filing jointly or qualifying widow(er) can have an adjusted gross income of up to $474,075.

Tax credits

Continuously high prices on living expenses throughout 2023 and the elimination of emergency allotment benefits for SNAP participants have created challenges for North Bay residents.

According to United Ways of California’s Real Cost Measure, which looks at the cost of food, housing, health care, child care, transportation and other basic needs to live in California, an estimated 25% of households in Sonoma County fall under this measure.

In Napa, 29% of estimated households fall below this measure, and Lake and Mendocino combined have an estimated 30% of households falling under this measure. It’s 31% for Solano County and 28% in Marin County.

Suzanne Harris, community impact director with United Way of the Wine Country, said there “are so many credits that people are eligible for.”

“The most important thing is that if people are not required to file, they should file anyway,” Harris said. “All of these tax credits are free money back to them (the taxpayers).”

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.

Working families or individuals earning up to $30,950 could qualify for the California Earned Income Tax Credit, up to $3,529 for the 2023 tax year.

Taxpayers caring for a child, spouse/registered domestic partner or other type of dependent can qualify for the Child and Dependent Care Expenses Credit. Those who qualify can get up to $3,000 for one person or up to $6,000 for two or more people.

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.

Taxpayers interested in claiming tax credits or inquiring about other potential credits they could qualify for should consult a tax preparer or follow the instructions on their tax preparation software.

Wildfire Victim Trust update

The longtime effort to exempt victims of utility-sparked wildfires from paying federal taxes on compensation for their losses cleared a major hurdle in February after the latest form of a bill aims to provide tax relief on wildfire-related settlement payments received after Dec. 31, 2019, and before Jan. 1, 2026.

The bill is incorporated into the $78 billion Tax Relief for American Families and Workers Act of 2024, which was approved 357-70 by the U.S. House of Representatives.

The tax package must pass through the U.S. Senate before heading to President Joe Biden’s desk and could still face significant challenges.

The Press Democrat will continue covering this long-awaited effort as it heads to the U.S. Senate.

Other free-file programs

There are multiple tax software platforms, such as TurboTax and FreeTaxUSA.

Some programs can cost more, 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 earning less than $60,000 annually can use United Way’s Free Tax Preparation program, an in-person tax filing option guided by a volunteer trained and certified by the IRS. Taxpayers do not have to be U.S. citizens to qualify for this aid.

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 $79,000 ($64,000 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 nonbusiness 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 $79,000 can use the “File on my own” option through TaxSlayer, a tax filing software available online. United Way has guides and YouTube videos that walk taxpayers through the self-filing process.

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.

A news release from the foundation said the volunteer-based tax assistance and preparation program helped secure more than $1.1 billion in refunds for more than 1.5 million taxpayers last year.

“Millions of people, especially older adults living on fixed incomes, depend on their refund to pay for monthly expenses like food and utilities,” Mioshi Moses, vice president of AARP Foundation Volunteer Programs, said in a news release.

“Many taxpayers miss out on tax credits and deductions they've earned every year. AARP Foundation Tax-Aide helps anyone secure these credits and much-needed refunds while saving on tax preparation costs.”

Harris said taxpayers, or anyone looking for assistance, can call 211 to be connected with services.

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