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tax relief

Freedom from Back Taxes: CPAs Offer 2021’s Best Tax Relief Service

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When you’re in trouble with the IRS, it’s tempting to bury your head in the sand and simply will those problems away. However, in the absence of adequate tax relief services, those pesky problems can take on a life of their own. Before you know it, a year of unpaid taxes snowballs into a host of unpalatable consequences, like liens, levies, and criminal charges.  

 

Don’t make the mistake of trying to sort out the ensuing madness on your own. Tax relief services offer individuals facing severe legal and financial consequences from unpaid taxes a means forward. 

 

Under the expert guidance of a certified public accountant, you can remediate your tax situation. However, before we discuss the many tax remediation tools in your CPA’s arsenal, we’ll deliver a brief crash course in Back Taxes 101. 

Back Taxes 101—Going from Bad to Worse. 

As you may have already guessed, back taxes is a term that refers to overdue tax payments. Although we often associate back taxes with unpaid or unfiled federal tax returns, back taxes can also occur at the state or county level. For instance, a back tax arising at the local level may involve an unpaid property tax to your county of residence. 

 

As with any unpaid bill, back taxes often result in the accumulation of even more debt. For example, the IRS charges those who do not file a tax return with a 0.5% penalty. In other words, the non-filing individual must pay 0.5% of the unpaid tax value. This penalty continues to accrue each month until the fine reaches 25% of the original overdue amount—unless, of course, one pays off the debt. 

 

Meanwhile, the IRS charges additional interest on the unpaid amount (currently, 5%) for up to 5 months. This tacked-on interest applies regardless of whether or not the individual filed their taxes. Remember: Some individuals file their taxes but don’t pay them in full simply because they can’t afford the bill. 

 

Regardless of the reason one has for not paying their taxes, we can all agree that back taxes result in indisputably crummy consequences. The longer one doesn’t pay those taxes; the worse things can become. So next, let’s take a closer look at how a simple tax flub can go from bad to worse.

Now, That Escalated Quickly.

In this world, nothing is certain except death and taxes. (And, by taxes, we mean tax collection.) 

 

When taxpayers neglect to pay their taxes, the IRS almost always catches on. After levying fines and interest, the IRS turns to liens and asset seizures to recoup their rightful cut. 

 

Usually, the seizure of one’s assets begins with wage garnishment. But, first, you’ll receive a written Demand for Payment requesting the delinquent amount. If you ignore this notice, you’ll open your mailbox one day to discover a Final Notice of Intent to Levy. Although you can challenge this document by requesting a formal hearing, the IRS can contact your employer if your efforts prove unsuccessful. 

 

No matter how tight you are with your boss, your employer will be legally obligated to fork over a sizable portion of your paycheck until your debt is settled. This tactic is known as garnishing your wages, and it can leave the garnishee nearly destitute during the repayment period. 

 

As a last resort, the IRS may decide to place a lien on your property. A lien is a security interest that is equivalent to calling dibs. The IRS assumes that if you cannot pay your tax bill, there may also be other bills that you’re unwilling or unable to pay. Therefore, a lien on an asset gives the IRS the right over other creditors to subsequently seize a piece of property. Consider it analogous to calling shotgun. 

 

The act of physically seizing a piece of property is known as a levy, and it only occurs after all other avenues have been exhausted. In movies and tv shows, this is the part where the IRS shows up at your house and begins carting out your valuables—although, in real life, it’s significantly less dramatic. 

Choosing the Right Tax Remediation Option

Fortunately, the IRS understands that well-intentioned individuals sometimes fall upon hard times. As such, the IRS works with individuals who demonstrate a willingness to settle their debts but may also need a helping hand.

 

By working closely with our devoted team of tax relief experts at Steven Lissner & Company, you’ll be able to identify which of the following remediation options work best for you:

 

  1. Installment Agreements

Need assistance negotiating a payment plan with the IRS? Our accounting specialists will crunch the numbers to ensure that you accept a fair monthly payment plan that doesn’t leave you completely destitute. 

 

  1. Offers in Compromise

Anyone who tells you that it’s easy to secure an offer in compromise from the IRS simply isn’t telling you the truth. But let’s take a moment to rewind. 

 

An offer in compromise is an agreement between an individual and the IRS to dismiss a portion of back taxes. To qualify, the taxpayer must prove that settling their debt would be nearly impossible. If the IRS feels generous enough to agree, then the taxpayer must settle their remaining debt immediately or in rapid installments. 

 

For those who qualify, Steven Lissner & Co. will craft a compelling Offer in Compromise that maximizes your chances of securing a successful resolution. 

 

  1. Release of Wage Garnishments, Liens, & Levies

Although the IRS reserves the right to garnish your wages for non-payment, the amount collected should not leave you destitute. If a wage garnishment leaves you unable to afford basic necessities like rent, utilities, or food, contact the IRS to request a reduction. In certain circumstances, you may also be able to secure a release of the liens and levies applied against your property.

 

  1. Currently Not Collectible

In addition, individuals who qualify for the release of wage garnishments, liens, and levies may be eligible to reclassify their debts under “currently not collectible” status. If the IRS agrees, the federal government places a pause on the collection process. This temporary breather allows individuals a short reprieve from the collection grind to get their finances in order.

 

  1. The Innocent Spouse Provision

Sometimes, individuals owe money to the IRS through no fault of their own. Consider the half of a married couple who files jointly without realizing that their partner conceals a sizable tax burden. If a partner was misinformed (or even duped) by their significant other, the innocent party can request pardon from the IRS. However, doing so often proves exceedingly tricky and requires the guidance of a professional who understands tax laws inside and out.

  1. Audit Reconsideration

Were you audited by the IRS but wish to dispute the amount you owe? If you have new information to share with the IRS that might change the entire game, request an audit reconsideration to reopen your file. 

Why Hire a Certified Public Accountant Who Specializes in Tax Relief

When it comes to tax remediation, you don’t know what you don’t know. So to ensure that you receive a fair shake, leveraging the seasoned advice of a tax relief specialist becomes paramount. 

 

Under a certified public accountant’s stewardship, you’ll understand which combination of tax remediation options best suits your unique situation and devise a bullet-proof plan for getting your finances back on track. In doing so, you’ll be equipped with the knowledge you need to avoid costly mistakes—the kind of errors that only serve to compound your financial burden. As a result, not only will your credit and financial standing improve, but your property will remain intact and your well-being restored.

 

The ways in which we discharge our debts matter. And, to put it bluntly, the tax relief industry is saturated by illegitimate experts and fraudsters. A debt relief agency may lack the chops to recommend a strategic tax remediation plan that frees you from the burden of back taxes. In the meantime, you end up shelling out hundreds of dollars only to wind up in even more debt. 

 

When you consult a reputable certified public accountant like Steven Lissner, you eliminate that risk. CPAs must complete 150 semester hours (including 48 semester hours of business and accounting courses) in addition to 1750 hours of supervised training under a licensed CPA. After also passing a 16-hour exam, it’s safe to say your CPA understands the tax code inside and out.

Meet Steven Lissner, Your Tax Relief & Remediation Expert 

Steven Lissner & Co. has 30+ years of experience in successful tax relief and remediation services. Using a variety of tried-and-true strategies, SLCPA will secure a satisfactory resolution to your IRS woes. 

 

In addition, you can count on Steven Lissner & Co. to get your finances back on track. Say goodbye to back taxes and create a sustainable financial plan that encourages steady growth instead of burdensome stagnation. Get a jump start on your 2021 tax plan by contacting Steven Lissner & Co today! Debt-free living and financial security await you!

8 Money-Saving Hacks for Tax-Savvy Small Business Owners

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After years of internal debate, you’ve finally decided to take the plunge and transform your passion project into a sustainable source of income. Taking this leap of faith means that you now have the freedom to launch your business vision as you see fit, hand-select your team of rockstar employees, and set your own work hours. (Unlimited PTO? Check.)

However, doing so also means assuming a high level of financial risk. During the leaner months, you’re the person who’s on the hook for payroll. Accordingly, meeting all of your legal obligations to your employees can translate into your business going without profit for a few months.

Playing your odds conservatively isn’t the hallmark of a failing operation—even booming businesses prepare for leaner times. Instead, leveraging your money wisely is a indicator of business acumen and a surefire blueprint for success.

Trust us when we say: Tax-savvy small business owners know how to implement the following money-saving hacks. So, roll up your sleeves, and let’s dive in.

1. Write off home office expenses IF you qualify.

If you’re operating your business venture out of your home, then you may qualify to deduct a bevy of associated expenses from your end-of-year taxes. But, certain conditions must apply:

  • You must regularly and exclusively use the space to conduct business. This requirement means that your office can’t double as a spare room, entertainment space, library, doggy boarding area, or at-home gym. Remember: If the IRS ever audits your business, they’ll want to conduct an in-depth inspection of this space. So, when in doubt, it pays not to take any risks. Best to shove those winter skis in the attic instead.
  • Your home office must serve as your principal place of business. If your home office doesn’t function as home base for your day-to-day business ops, then forget it. You’ll need to be able to prove that you conduct business here on the regular, whether that means coding websites or meeting in person with prospective clients.  Did you meet the criteria to claim the home office deduction? If so, then you can deduct a percentage of expenses related to your mortgage interest payments, utilities, office repairs, and essential services like high-speed internet. To ensure that you adhere to the letter of the law, entrust the guidance of a certified public accountant who can help you calculate your eligible expenses.

2. Invest in your retirement pronto.

Retirement plans don’t just benefit your employees. They allow you to defer paying taxes on any earnings that you invest into traditional retirement plans. The funds therein are only taxed when an employee withdraws them in retirement. However, because you made that initial investment into an eligible account—such as a 401(k) or IRA—that grows as the years tick by, you’re actually earning money. So, invest away and watch your money grow!

For example, individuals under age 50 can invest up to $5,500 per year into their traditional or Roth IRAs. For individuals over age 50, that annual investment value increases to $6,500.  However, thanks to the beauty of compounding interest, those investments mature over time, generating a robust source of retirement income.

3. Accurately calculate and deduct business vehicle expenses.

This deduction isn’t for the faint of heart. It requires meticulous attention to detail in your recordkeeping and receipts. Boatloads of them.

If you use a car in an official capacity to complete business activities, you can deduct certain expenses related to its operation. However, for mysterious reasons, vehicles that double as equipment (e.g., forklifts) or private transit (e.g., taxi cabs) don’t qualify. For less mysterious reasons, neither do luxury automobiles. So, save the Maserati for personal use.

Once your vehicle meets these qualifications, you must determine the percentage of the time that you devote its use to business activities. Here’s an important tip: The answer is never 100% of the time. For example, if you use the company car to make a Starbucks run—while essential in our opinion—it doesn’t count.

Also—and this is particularly important for small business owners to know—commuting miles from your home to your business aren’t deductible either. Unfortunately, Congress assumes this to be a baseline cost for any worker vs. a deductible business expense.

From there, decide if you’ll be deducting the standard mileage rate or itemizing the costs to reflect hidden fees (such as monthly parking passes, tolls, etc.). For 2021, the IRS has set the standard mileage rate at 56 cents per US dollar.

4. Receipts, receipts, receipts.

On that note, let’s discuss the importance of saving your receipts and divulge a little-known hack.

According to the IRS, you’re supposed to save any business receipts for up to five years. We hear you. That’s crazy talk. But, annoyingly, creating a paper trail is essential in the event of an IRS audit. The agent assigned to your case will expect you to furnish evidence of home office expenses, mileage, you name it. So why not say goodbye to those little crumpled-up bits of paper and let an app organize the data for you? There are numerous apps on the market with built-in scanning functionality to digitize those receipts.

Conveniently, this discussion provides the perfect segue into our next topic: Quickbooks.

5. Quickbooks to the rescue.

Quickbooks is one such app that enables you to upload and store your receipts with minimum hassle. But, it’s also an ideal tool for running many of the day-to-day financial operations of a small to mid-sized business.

Quickbooks integrates seamlessly with a range of programs from PayPal and Shopify to Amazon Business and Microsoft Excel. Like Salesforce, Quickbooks’ customizability is one of its crucial features, whether it’s displaying data via reporting or generating invoices and processing payroll. But, unlike Salesforce, Quickbooks is easy and intuitive to use.

Likewise, when tax time rolls around, you’ll be grateful that you have it. Simply give your accountant access to your Quickbooks, and watch the magic happen.

If you’re not a technology guru and setting up Quickbooks seems daunting, you need not stress. At Steven Lissner & Company, our accountants provide Quickbooks setup, tutorials, and customized solutions for your business. Enlist a best-in-class accounting whiz to solve your bookkeeping issues and free up more time for the things you love—like interacting with customers.

6. Deduct fees for new (and used) business equipment.

We all know that you can deduct the business expenses incurred for purchasing new equipment, whether it be an updated computer, an industrial-grade freezer, or a company van.

But, did you know that you can also deduct the costs associated with used equipment that you purchased during the tax year? If you weren’t in the know, don’t beat yourself up too badly over it. The IRS amended Section 179 to expand the equipment eligibility requirements within the last five years.

Exactly how much in expenses can you deduct? You can write off the eye-popping full amount of $1,0505,000 in equipment costs. If your enterprise falls into the small business category, this deduction can feel like a much-needed windfall.

7. Don’t be afraid to claim your losses.

By losses, we don’t mean the money you lose during a particularly poor-performing quarter. Instead, we’re talking about certain debts that you’re unlikely ever to collect. Let’s face it: Sometimes customers don’t pay up.

When that occurs, you don’t have to chalk it up simply as a financial loss. Instead, the government allows you to deduct those debts from your yearly earnings. This provision can take some of the sting out of a business deal gone bad.

8. Advertise away!

Marketing costs to enhance your business’s profitability margins are fully deductible—so advertise away! Hire a UX designer to give your website a user-friendly interface. Employ an SEO expert to fine-tune your content strategy, enriching your site with the keyword-rich language that search engines love. Divert some funds to social media marketing, video production, and expanding your online presence.

In capable hands, advertising costs are a win-win. They bring you business revenue and they save you money on end-of-year taxes.

The Secret Sauce of Tax Savings

Just as advertising is better off left in the hands of professionals, so too is filing your taxes. Almost any cook can make brisket, but only a handful of cooks know the secret sauce recipe that makes customers queue up for miles around.

A skilled certified public accountant is like a Michelin star chef. They possess all the ingredients needed to whip up a winning financial strategy. Whether you’re a small business owner or a late-career CFO, hiring a tax accountant to maximize your returns is always a good idea.

With an industry-leading tax expert in your corner, you’ll be able to identify unique solutions for your business and devise a blueprint for your financial future. You’ll receive human support for all of your tax questions, instead of relying on automated algorithms and faq sections. And, you’ll be prepared when chaos descends in the form of an IRS audit. Scratch that. What would otherwise seem like chaos will now proceed like orderly, predictable clockwork.

At Steven Lissner & Company, our certified public accountants possess the skills you need to help your small business thrive. Contact our tax advocates today to plan for your future tomorrow.

Single Moms: Save an Extra $1000 (or More) on Your 2021 Taxes

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We all get it: Tax season burnout.

Now, imagine trying to muck your way through the tax filing process while operating a single- parent household and working nights while earning your degree.

Seems nearly impossible, right?

And yet, today’s single moms are superheroes—juggling childcare with financial responsibility, work-life balance, and more.

Accordingly, when tax time rolls around, the IRS rewards single moms in BIG ways. Understanding the ins and outs of these tax benefits can help you save thousands of dollars on your next return.

And, things just got even better in 2021. We’ll explain how you can leverage recent changes in the Child Tax Credit to receive an additional $1000 (or more) on your next tax return.

But before we dive into these tax breaks, let’s review some best practices for single parents who wish to claim their children as dependents.

Best Practice #1: File as Head of Household

Want to maximize your 2021 return? Then, file for “head of household” instead of “single” if you can meet the following criteria:

  • On the last day of the 2021 tax year, you were unmarried.
  •  In 2021, you contributed more than 50% toward household expenses. (Household expenses include rent, mortgage interest payments, property taxes, utilities, food,
    essential maintenance repairs, and homeowners insurance.)
  • Your children cohabitated with you for the majority of the year.

Did you meet all of the criteria above? Next, make sure that you’re the only parent who intends to claim the child as a dependent on their taxes. In the event of a dispute between you and a former partner, consult this handy list of Tiebreaker Rules published by the IRS.

Best Practice #2: Request Financial Assistance for Tax Preparation

Do you make less than $57,000 per year, have a disability, or identify as a non-native English speaker? Then, you may qualify for Volunteer Income Tax Assistance (VITA).

By taking full advantage of the VITA program, you can obtain access to trained volunteers who will use automated software to process your tax returns.

In this instance, free assistance doesn’t mean reduced quality. VITA volunteers must undergo extensive training and testing to prove their mastery of the latest tax laws.

How about single grandparents above age 60? Instead of using VITA, consider trying Tax Counseling for the Elderly (TCE). Unlike VITA consultants, TCE volunteers receive specialized training to field questions on financial matters that affect retirees.

Best Practice #3: Hire a Certified Public Accountant

If you bring in more than $57,000 per year, then you should consider hiring a certified public accountant to file your taxes. Doing so could mean the difference between being stretched too thin and flourishing during the next tax year.

As we’ll see shortly, tax laws are constantly changing. A perfect storm in 2020—courtesy of the COVID-19 pandemic—has led to the odds stacking up in your favor during 2021.

Don’t miss out on the essential resources you need to help your family thrive. By enlisting the trusted guidance of a certified public accountant with decades of experience, you’ll feel well ahead of the curve.

Especially when it comes to staying up to date on the latest tax news. Let’s consider recent changes to the 2021 Child Tax Credit as a case in point.

Supercharge Your Tax Refund with the 2021 Child Tax Credit

For one year only, the IRS has increased the Child Tax Credit by 50%, or at least $1,000 per child. (Before 2021, a single parent claiming the Child Tax Credit would receive $2,000 for each qualifying child under the age of 16.)

But, all of that changes for the 2021 tax year before reverting back to business as usual.  In response to the COVID-19 pandemic, Congress passed the American Rescue Plan Act (ARPA) on March 11, 2021. Aside from providing much-need financial assistance to forestall foreclosures and evictions, the ARPA greatly expanded the Child Tax Credit.

Now, eligible families can receive $3,600 for dependent children under the age of 6 and $3,000 for children between the ages of 6 and 17. (That 17 isn’t a typo. For the first time, 17-year-olds will count as eligible dependents.)

As in prior years, income restrictions will apply. If you’re single and filing as “head of household,” then your Adjusted Gross Income (AGI) must not exceed $112,500 per year. (Your AGI refers to your pre-tax income before the IRS adds back in certain deductions.)

For single filers, your income must not exceed $75,000 annually if you intend to claim the credit. This is why best practice #1, or filing as head of household, can make such a crucial difference come tax time.

After your income surpasses the thresholds mentioned above, phase-out ranges apply. For example, head of household filers will receive $50 less for each $1,000 in income that exceeds $112,500. This means that a single mom can make up to $240,000 in annual income and still receive a partial payment, albeit a very small one.

Advance Child Tax Credit Payments

You may be thinking, “That sounds great, but I need money now.”

After all, it’s been a difficult year. At the height of the COVID-19 pandemic, 14.8% of Americans had lost their jobs. 

Although the economy is on the rebound, when you’re living paycheck-to-paycheck, those temporary setbacks aren’t so temporary. Especially if you’re raising children on a single income.

In recognition of this, the IRS will be issuing advance payments of the Child Tax Credit. Beginning July 15, 2021, the IRS will begin distributing installments of the credit via direct deposits or checks to qualifying families.

For example, families will receive monthly payments of $300 for each qualifying child under age 6. Therefore, by the end of the year, you should have already acquired 50% of your annual Child Tax Credit. Any amount missing or owed back to you will be reconciled on your 2021 tax return.

Often, this is a good thing.

The IRS estimates the advance payment amounts you will receive in 2021 based on your 2020 tax return. If your income declined in 2021, for instance, then the IRS will likely owe you a larger refund.

Additional Tax Credits for Single Moms

But, there’s more.

In 2021, the Child and Dependent Care Credit will also increase for one year only. Single parents eligible for the credit must meet the following criteria:

  • You hired paid childcare so that you could attend work or search for employment.
  •  Your child is younger than 13-years-old or older than 13-years-old and meeting federal
    requirements for having a disability.

In 2020, single moms claiming this benefit could receive a maximum tax credit of $3,000 for childcare expenses for one child. If multiple children were in the picture, then that value doubled to $6,000.

However, the American Rescue Plan Act (ARPA) widens those amounts to $4,000 and $8,000, respectively.

That’s a significant jump!

Lastly, if you’re a single mother making less than $50,000, then you may qualify for the Earned Income Tax credit (EITC). But, your eligibility hinges on how many children you can claim. To discover if you qualify, review this table of income requirements published by NerdWallet.

Your Largest Tax Refund Yet

Keeping up with the latest changes in tax law is complicated, to say the least.

If you’re also a single mom who’s juggling a thousand responsibilities, then you probably don’t have time to research tax regulations.

And, who could possibly blame you? Children are difficult enough to raise when two adults are shouldering all the responsibility—let alone one.

When it comes to filing your taxes, you don’t have to shoulder the burden alone. Enlisting the assistance of a certified public account ensures that you have access to up-to-the-minute changes in tax laws.

Even better, you don’t have to get your hands dirty. With a world-class tax accountant in your corner, you’ll eliminate needless hours sitting in front of a computer screen.

Have you ever tried to find the answers you need to important tax questions by using the “help” section of an online tax filing system? Working with a CPA ensures that you’ll never have to interact with robots or dig your way through online forums again. Instead, you’ll be interacting with a human who has your best interests at heart and delivers exceptional and personalized service.

Likewise, you’ll never miss out on hidden tax breaks, like the Child Tax Credit, that will supercharge your tax return.

In Summary: Contact Steven Lissner & Company Today!

In this blog, we’ve discussed how you can save big in 2021 by claiming a variety of tax credits. Believe us when we say: We’ve only just begun to scratch the surface.

Most importantly, however, you’ll be able to maximize your tax return while minimizing all the hassle.

And, your time is invaluably important when you’re a single parent. Extra time means attending dance recitals, PTA meetings, relaxation retreats (because you definitely deserve it), and much more.

To learn more about how you can secure your largest refund yet, contact our industry-leading tax experts today at Steven Lissner & Company.

The Top 7 Tax Breaks for U.S. Veterans

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Active duty service members work overtime to safeguard our freedoms at an incalculable cost to their personal lives. From missed milestones (like first steps and birthdays) to abrupt relocations, military family life has become synonymous with sacrifice.

This sacrifice often takes the form of extended deployments to distant, war-torn regions of the world. Here, the stakes are high; the costs, steep. One unlucky move could result in loss of limb or loss of life.

In recognition of the tremendous sacrifices we call upon our veterans to make, the IRS has responded by awarding the following tax breaks to U.S. veterans. Keep browsing for an easy-to- follow guide on tax savings for U.S. veterans!

1. Tax-Free Pensions for Elderly & Disabled Veterans

Did you know that the Veterans Administration (VA) offers pension plans to elderly and disabled veterans—even if the disabling event occurred outside of active duty?

A pension plan is a work-sponsored retirement program that requires employers to pay monthly support to former workers upon retirement. Once a popular source of retirement income, pension plans are now uncommon in the private sector.

However, the VA awards disability pensions to elderly and disabled veterans who meet the following criteria:

  • Senior status (Age 65 or older)
  • Unemployed or under-employed due to a permanent disability
  •  Completed at least 90 days of active duty, including one day of combat service
  • Residents of nursing facilities
  • Recipients of Social Security Disability Insurance (SSDI) or Supplemental Security
    Income (SSI)

The key takeaway for your taxes? The IRS categorizes disability pensions as untaxable income. Therefore, any income obtained from your pension won’t count as an income source during your federal and state tax returns. Moreover, these funds can amount to hefty savings when you need them the most—during the leaner months of your retirement.

2. VA Disability Compensation for Former Service Members

Now, let’s discuss former service members who suffered permanent disabilities in the line of duty. (This includes individuals with pre-existing conditions that worsened during their service period.)

These individuals may qualify for monthly tax-free disability compensation from the VA. Examples of “service-connected disabilities” covered by these benefits include:

  • Loss of vision or hearing
  • Amputation or limb paralysis
  •  Spinal cord injuries
  • Traumatic brain injuries
  • Third-degree burns
  • Cancers caused by exposure to radioactive or toxic materials
  • Qualifying chronic illnesses
  •  Post-traumatic stress disorder (PTSD)
  •  Severe anxiety or depression
  •  Military sexual trauma
  • Etc.

For a comprehensive list of eligible conditions, please review the disability compensation criteria published by the U.S. Department of Veterans Affairs.

Individuals who qualify will receive a disability rating of 0-100% from the VA. The VA then calculates the amount of monthly disability compensation from this rating and the veteran’s number of dependents.

For example, a 60% disabled veteran with a spouse and child may receive up to $1,328.39 per month in disability compensation. In contrast, a 30% disabled veteran without any dependents may only receive $441.35 in monthly payments. More importantly, however, all of this additional income is considered tax-free.

To more accurately estimate your compensation rates, please visit veteransunited.com.

3. Tax-Exempt Housing Grants for Disabled Veterans

Veterans who qualify for disability compensation may also be entitled to receive a Specially Adapted Housing (SAH) grant. An SAH grant allows individuals with service-connected disabilities to purchase a new (or remodel an existing) home with adaptive modifications.

For example, a disabled veteran with monoplegia could use these funds to make their home wheelchair or crutch accessible.

For the 2021 tax year, disabled veterans can receive up to $100,896 in SAH funds—all of which are nontaxable.

4. Tax-Free Benefits for Survivors

If you lost a loved one to military service, then you may qualify for a variety of spousal and child support programs. Moreover, many of these services are exempt from federal and state taxes. Examples of tax-free benefits for survivors include:

  • Survivors Pension Benefit: You may qualify for this tax-free form of financial assistance if:
  • You’re the spouse or child of a recently deceased veteran who completed combat service.
  • Your net worth (including your primary residence, car, and assets) falls below the designated threshold. In 2021, the VA has established the net worth limit to qualify for the Survivors Pension at & < $130,773.
  • Death gratuity: This one-time payment of $100,000 relieves the financial burden assumed by family members upon the death of a service member. This covers casualties that occurred during:
  • Active duty
  • Reserve duty
  • ROTC training
  • Authorized travel
  • Tax-free healthcare benefits, including emotional support, dental coverage, and more
  • Tax-free tuition assistance for undergraduate and certificate coursework under the Survivors ‘and Dependents’ Educational Assistance Program
  • Access to Family Survivors’ Group Life Insurance, Basic Allowance for Housing (BAH), burial assistance, and more

5. The Compensated Work Therapy (CWT) Program

Many veterans struggle to reacclimate to civilian life after serving in the military. Consider the following statistics:

  • Although veterans account for 6% of the US population, 8% of homeless individuals identify as veterans.
  • 23% of female veterans report suffering sexual assault during their time of service.
  • In 2008, 13.8% of sampled veterans who served in Afghanistan and Iraq had received an official PTSD diagnosis.
  • 25% of sampled veterans reported abusing alcohol in the 4 months following deployment.

Accordingly, the Compensated Work Therapy (CWT) program counteracts these challenges by equipping veterans with the resources they need to obtain gainful employment. Under the CWT, unemployed veterans belonging to high-risk groups can receive intensive supports, including:

  • Incentive therapy: Guided, non-competitive employment in a therapeutic setting with a case manager and team of support individuals
  • Sheltered workshops: Six months of paid skill-building in an isolated environment with other veterans
  • Transitional work: Supervised non-competitive work at an affiliated employment site, often sponsored by a vocational rehabilitation program
  • Supported employment: Competitive employment with appropriate modifications, such as on-site job training

Not only do these supports allow veterans to break the cycle of unemployment, but the income obtained from these programs is considered non-taxable. When end-of-the-year taxes roll around, this can make a HUGE difference in your refund.

6. Tax-Exempt Education Benefits for Veterans

Even if you’re not in the military, you’ve probably heard of the Post-9/11 GI Bill. The GI Bill enables honorably discharged veterans with at least 90 days of active duty service to pursue higher education.

Wondering how much money you may qualify for? The Post-9/11 GI Bill uses a tiered approach.

Here’s how this works in practice. If you’ve served at least 18 months of active duty service but less than 24 months, you qualify for a 70% reduction in your tuition costs and fees payable. (To review the full table of benefit tiers, click here.) This means that your GI Bill would pay $7000 of a $10,000 tuition bill from an accredited institution!

Moreover, funds received from the GI Bill do not need to be added to your annual income when calculating taxes. This means shaving thousands of dollars off of your taxable income!

7. New Jersey State Tax Exemptions for Veterans

Veterans should be happy to claim the Garden State as their home.

For example:
Were you honorably discharged from the military before the end of the previous tax year? If so, then you may receive a $6,000 exemption on your NJ state income taxes. Likewise, your spouse can also claim this exemption if he or she qualifies as a veteran.

Are you a veteran with a service-connected, 100% disability rating? If so, then the state of New Jersey refrains from assessing real estate taxes on your primary residence. However, in order to claim this state tax exemption, you must first submit the following form.

And, finally, did you know that NJ is one of only 22 states that doesn’t tax military retirement pay? At the end of the year, this can translate into a significant source of tax savings!

Steven Lissner & Company Supports Our Veterans!

As you can see, tax exemptions for veterans are exceedingly complex—and we’ve only just begun to scratch the surface!

To ensure that you receive the full refund that you deserve, enlist the expertise of a certified public accountant who can boast a proven track record of supporting our veterans.

At Steven Lissner &amp; Company, our tax experts offer specialty tax preparation services for veterans and active duty service members. Our accountants will leave no stone unturned when analyzing your finances for hidden opportunities to save BIG on end-of-year taxes.

With 30 years of experience under our belts, we know the tricks of the trade to secure your biggest refund yet.

In the military, stakes are high. The same is true of your taxes. Don’t make a costly mistake by relying on big-name, automated tax services to calculate your refund. Instead, contact one of our tax preparation experts today and enjoy the following benefits:

  • Personalized service and expert up-to-the-minute guidance
  • Discovery of oft-overlooked deductions and credits
  • Meticulous record-keeping and opportunities to plan for the future
  • Avoidance of costly mistakes
  • Audit support and protection
  • Less frustration and wasted time spent googling obscure tax terms
  • Responsive and friendly service that you can access year-round

It’s never too early (or too late) to start maximizing your tax refund. Contact our team of tax specialists today to set up a consultation!

333 Route 46 West Suite 206
Mountain Lakes, NJ 07046

(973) 917-4080

info@slnjcpa.com

Contact Us

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333 Route 46 West Suite 206
Mountain Lakes, NJ 07046

(973) 917-4080

info@slnjcpa.com

Contact Us

Client Login