The IRS has once again extended the tax filing and payment deadlines in most parts of California due to destruction caused by landslides, mudslides, and severe storms. Now those Californians have until October 16th to file, as opposed to the previously announced May 15th date.

The IRS has extended the fourth quarter 2022 estimated tax payment deadline to October 16th. The 2023 estimated tax payments due on April 18th, June 15th, and September 15th, as well as the quarterly payroll and excise tax returns due on January 31st, April 30th, and July 31st, have also been delayed until October 16th. No contact or extension paperwork is necessary to take advantage of the extended time. If taxpayers receive penalty notifications within the postponed period, they should contact the number provided for the penalty to be waived.

Many taxpayers will be able to contribute more money to workplace cafeteria plans and other tax-advantaged accounts in 2022. Accounts that will have higher contribution limits in 2022 include medical flexible spending arrangements (FSAs) and health savings accounts (HSAs). For FSAs, the annual contribution limit for most employees will be $2,850 in 2022, a $100 increase over the 2021 limit. The 2022 contribution limit for HSAs will be $3,650 (up from $3,600) for individuals, and $7,300 (up from $7,200) for families.

The IRS also reminds taxpayers that FSAs are generally subject to a “use it or lose it” rule, meaning that the taxpayer forfeits any funds remaining in the account at the end of the year. HSAs typically do not have this restriction, so funds in the account carry over from year to year.

In many cases, employers may allow either a grace period (until March 15) to use up FSA funds from the previous year, or a partial carryover of funds to the next year. The maximum carryover amount from 2022 to 2023 will be $570, up from $550 for 2021-2022. However, under COVID relief legislation enacted by Congress in February 2021, employers may offer their employees a higher 2021-2022 FSA carryover limit, or an extended grace period of up to 12 months.

If you have money remaining in your 2021 FSA, check with your employer’s benefits department about whether you have a carryover or grace period option.

A tax professional can help you determine how to use the increased contribution limits for 2022, and the special 2021 COVID relief rules, to get the most out of your FSA or HSA.