Taxes 2023: 7 On Your Side, experts answer viewer questions during live Tax Chat

Wednesday, March 29, 2023
Kelly Batson, United Way Bay Area answer tax questions.
Kelly Batson with United Way Bay Area answers tax questions about child tax credits and the filing extension to pay.

SAN FRANCISCO (KGO) -- Have a question about taxes or filing your tax returns? 7 On Your Side's Michael Finney is here to help.

7 On Your Side and a team of tax experts from United Way Bay Area answered questions on Friday about changes to the tax law, new deductions, deadlines, and much more.

United Way Bay Area's Free Tax Help can get your taxes done right by one of their experts for free! You may qualify for more than $8,000 in refunds and earned income tax credits. Call 211 or visit to get started today.

Other experts helped out during the tax chat included the IRS, California Society of CPAs, and Golden Gate Society of Enrolled Agents. Read some of the viewer's questions answered by experts below.

Viewer name: Austin

Viewer question: In November we moved into an apartment in SF and our leasing agent for Green Tree Property offered a promotion/gift of $1500 for moving in, and now I received a 1099-MISC in amount of $2000, is it right that the investment property reports what is a gift as an 1099 MISC taxable income?'

Volunteer name / organization: Larry Pon, CalCPA

Answer: According to the tax code, all income received is taxable, unless there is a specific exclusion. Yes, the promotion you got is taxable and should be reported on Line 8z of Schedule 1, Form 1040.

Viewer name: Mary Smith

Viewer question: With the change in filing dates, does that impact due dates of estimated tax payments? Do they continue to be owed 4/15, 6/15, 9/15, and 1/15/24? Or is there a change to reflect new calculation dates?

Volunteer name / organization: Larry Pon, CalCPA

Answer: Assuming you are in the 44 counties covered by the Winter Storm Relief in California, your 1st, 2nd, & 3rd quarter estimated payments can be paid by October 16, 2023 without penalty. Your 4th quarter payment is still due January 16, 2024.

Viewer name: Veronica B

Viewer question: I would like to know if I can add my parents as dependents as they are both on Social Security and do not file taxes.

Volunteer name / organization: Larry Pon, CalCPA

Answer: You can claim your parents as dependents if they meet the following conditions:

No earned income

Gross income limit for 2022 is $4,400

Generally Social Security Income is not counted

You provide over of their support

If so, they can be claimed as dependents. The Other Dependent credit is $500/person.

You will also be able to include their medical expenses on your tax return.

Viewer name: Mark H

Viewer question: Hi, I recently started my own business. I still work for my former company, part time, that was destroyed by the pandemic. Are there any concerns or " Red Flags", I should be concerned about, when filing both sources of incomes ? W9 vs 1099 vs taxed income? I have been with my company for 30 years and this is all new to me.

Volunteer name / organization: Loreley Fernandez-Davila / GSEA

Answer: Reporting self-employed income along with W2 income raises no red flags as it is pretty common in this gig economy. If you receive 1099s, you should keep a record of your expenses to report on a schedule C. If there are no expenses, schedule C is not required.

Viewer name: KRR

Viewer question: My credit union loan was secured with transfer from savings into a certificate. When the loan was PIF, I cashed in the certificate. Is the earned interest on the certificate just interest or capital gains?

Volunteer name / organization: Larry Pon, CalCPA

Answer: The interest income will be taxed as interest income. This will be reported on Form 1099-INT.

Viewer name: Lyn

Viewer question: I received EDD benefits in 2021 for which I paid taxes. In 2022, EDD claimed they were not suppose to have paid me for a week and deducted the amount from my 2022 EDD benefits. I am still awaiting a hearing to dispute their claim. How do I report the money that was deducted in 2022 but had already paid taxes on in 2021?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: I would ask EDD if they will report the deduction in 2022, if so, there is no need to amend 2021. 2022 income would just be lower by the 2021 amount you paid back.

Viewer name: Meyson L

Viewer question: Hi what tax deductions are available for head of household that owns a home and uses a room for an office for work from home? Also I did purchase some equipment to print/design items for sale but didn't really get around to putting it up online for sale. Can I still claim that? Just trying to minimize my tax liability. Last year I had to pay 17k total for state and federal due to withdrawing from my 403b to for a down payment to purchase a home. It was considered taxable income and totaled with my w-2 income. Please let me know what deductions can help me save money.

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: As a home-owner who itemizes you can deduct interest on your mortgage and property taxes paid during the year. For a home office, expenses are only deductible if you are self-employed. Unfortunately, there are no home-office deductions for W2 employees. Based on your income, you could qualify for the Child tax credit. If you start your print/design business, then you would be considered a self-employed individual and can report income and expenses on Sch C. There are hobby rules to be considered. I would suggest you find a tax professional.

Viewer name: Ramond O

Viewer question: Is E- filing tax return safe? There's a lot of stories about hackers.

Volunteer name / organization: Larry Pon, CalCPA

Answer: E-filing is much more efficient that filing on paper. As long as you use a reputable vendor, it is very safe and quick. If you use a tax professional, the IRS requires strict cybersecurity standards we need to implement.

Viewer name: Hannah

Viewer question: What are some common mistakes young adults make when filing their own taxes for the first time?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: In my opinion, one of the biggest mistakes some young adults make is not filing their tax return because their income is below the filing requirement but then failing to recuperate their withholding in form of a refund. The second mistake is not getting on the same page with their parents about being claimed as a dependent.

Viewer name: Janet L

Viewer question: I am aware of the IRS and FTB extensions for counties affected by recent storms. Can you advise if the FBAR filing which is separate from the 8938 has also been extended from its usual 4-15 due date and what is the new date for the FBAR? Thank you

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: There has been no guidance regarding an FBAR filing extension, so we can assume the deadline is still April 15 given that it is filed with a different entity.

Viewer name: Rosemary C

Viewer question: Has the tax filing deadline for the IRS and the FTB been delayed to Oct 16, 2023 for ALL people in the CA 'disaster area' (which is all of the Bay Area and most of CA) -- even if you WEREN'T that affected by the winter storms? Or do we have to prove/show that we were 'affected' by the winter storms somehow?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: The extension applies for all California counties, except Imperial, Kern, Lassen, Modoc, Plumas, Shasta and Sierra. You do not need to prove you were affected by the storms and the extension is automatic.

Viewer name: Bryan P

Viewer question: With W2 deadlines looming over employers, what if the W2 you received is in correct? My previous employer has issued W2 via ADP payroll company. I started to work on my 2022 taxes and to my surprise they failed to list the employers 'state' identification number for filing my state taxes. I called the California tax board and they were no help. I have tried to reach the employer but he's not responding. I don't know what to do or who to turn to. I thought maybe Michael can help me?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: Try using six nines (999999) for the state identification number.

Viewer name: Michelle A

Viewer question: I'm Michelle, a 60 y/o woman, married with no minor children. I own a primary residence in my name only. My spouse and I are thinking of selling the house and retiring in the next 1-3 years. Question 1) What actions are required to qualify for the $500k married deduction of the capital gains tax from selling the home? Does my spouse need to be on the mortgage? Question 2) Should I create a trust? Will the tax benefits be the same if the house is sold and proceeds go to the trust? Do you recommend any helpful books or trust advisors who charge by the hour or on a sliding scale?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: The requirements for you to qualify for the $500k capital gains exclusion is to live in the property for two years out of the last 5 years prior to the sale date. Your husband does not need to be on the mortgage. Trusts are an estate planning tool, not a tax sheltering tool. Trusts are a very complex topic and we recommend you find a professional to assist you.

Viewer name: Myra S

Viewer question: I realize we in the Bay Area can wait to file our taxes until October. Question: Does this mean that if you owe taxes you can wait until them and NOT accrue interest or penalties on that money? Will this apply to the State as well as the Federal Govt?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: Yes, the extension applies for filing and payments without penalties or interest.

Viewer name: Dan E

Viewer question: I purchased a 2023 Chevrolet Bolt EUV on November 11,2022-the day the car hit the lot. My turbo tax said Chevrolet vehicles do not qualify for any part of the Federal Electric Vehicle Tax Credit. I know that the rules changed in the fall under the inflation reduction act. Can I get any credit at all? Thank-you

Volunteer name / organization: Larry Pon, CalCPA

Answer: The Inflation Reduction Act was signed by President Biden on August 16,2022 which made substantial changes to the Electric Vehicle Credits. Since your vehicle is manufactured by General Motors, there are no EV credits because GM exceeded the 200,000 EV vehicle limit.

Viewer name: tonitonzzz_

Viewer question: Can I write off my commute to and from work for my taxes?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: Unfortunately, you cannot.

Viewer name: Rod L

Viewer question: Will a married couple get more of a refund if they file jointly or separately?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: It depends on your income, but married filing separately requires more knowledge of community property state tax law. Incomes over $1M could benefit more from MFS.

Viewer name: Wendi A

Viewer question: If I received the Golden state stimulus check do I still need to report it on my taxes even though both the IRS and the state of California did it is not going to be taxed ? I'm preparing my taxes myself and i don't know how to report the income from the stimulus and then get it to not be applied as part of my income. But I did read somewhere that an enrolled agent said it needs to be reported. Thank you for any help you have on this issue.

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: If you received a 1099-MISC from CA, we recommend that you report it to avoid any IRS notices created by the automatic system due to the matching principle. You can report the income on Schedule 1 line 9 and back it out on line 8z.

Viewer name: Scott M.

Viewer question: Do I still need to prepare and pay my taxes before the extension date expires ? Because of the special emergency declared areas in the bay area I understand we don't have to file an extension and returms.arent.due.until November. But if we owe do we have to pay now?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: The extension is until Oct 16, 2023. It is automatic and it applies for filing and payments.

Viewer name: Sandra J

Viewer question: I received a 1099 indicating I was sent a middle class refund from California. Problem is I never received the refund. Do I report this as income even though it wasn't received? How can I find out where my refund is? Thank you.

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: We recommend reaching out to the Franchise Tax Board to find your payment. The Middle Class Tax Refund is not taxable for the IRS or CA.

Viewer name: Kurt V

Viewer question: Did I hear that if you filed with a Standard Deduction you can still add Charitable Contributions also?

Volunteer name / organization: Larry Pon, CalCPA

Answer: No, this did not get renewed for 2022. This only applied to 2020 and 2021 as part of the Covid tax relief legislations.

Viewer name: Michael F

Viewer question: 2021 state taxes said I owed them $7000. Fearing the worst, I paid it. Come to find out they owed me $120. I have been calling and they sent me an unreadable copy of the tax return. I have yet to get my $7000 + 120 returned. Can you help me? Thank you.

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: Unfortunately, the only ones who can answer that question is the Franchise Tax Board. You could hire a professional and sign a POA so they call and resolve it on your behalf.

Viewer name: Daniel C

Viewer question: If you already filed and got a tax form, what do you do?

Volunteer name / organization: Loreley Fernandez-Davila / GGSEA

Answer: it depends on the form, but most likely you should amend your tax return.

Take a look at the questions and answers from last year's tax chat here.

Take a look at more stories by Michael Finney and 7 On Your Side.


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