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If you’re a small business in California that’s been impacted by severe winter storms, there is relief available. In this article, we’ll go over the various tax options available to small businesses impacted by the federally-declared disaster.
Tax Deadline Extension
The Internal Revenue Service (IRS) and the Franchise Tax Board of California (FTB) have extended individual and business tax deadlines for Californians affected by the winter storms to Oct. 16, 2023.
For businesses, this means returns due on March 15 and April 18 will now be due on Oct. 16, 2023. Additionally, quarterly estimated tax payments due on January 17 will now be due on Oct. 16, 2023. This also means that you will have until Oct. 16 to make 2022 contributions to your individual retirement accounts (IRAs) and health savings accounts.
This new deadline applies to quarterly payroll and excise returns that are normally due on January 21 and April 30. The IRS will use the business address it has on file to automatically provide relief so there’s no action required on part of the filer.
Counties that qualify for tax relief are 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.
If your business is not located in one of the disaster areas, but the records needed to file your return are located in one of the disaster areas, you may still be eligible for relief. The IRS encourages taxpayers qualifying for relief who live outside the disaster area to contact the IRS at 866-562-5227. This also extends to workers assisting in relief activities who are affiliated with a recognized government or philanthropic organization.
Disaster Deduction
As a small business, you can claim any uninsured or unreimbursed disaster losses on your tax return. You have the choice to claim them in the year the loss occurred (in this instance, 2023), or the return for the prior year (2022, which you will file this year). You must write the FEMA declaration number— 3691-EM —on your return in order to claim the loss.
