joe martin – Joseph T. Martin Income Tax Service

March 2021 – Update

There are only 5 more weeks left in the standard 2020-2021 Tax Season.

April 15, 2021 is the tax deadline this year. April 16, 2021 is the 57th anniversary of the first Gemini Space Mission–unrelated, but very cool.

I am still available to file your 2020 tax return remotely, over Zoom, FaceTime, the phone, or through the mail.

You can also drop your documents off with me in my secure outdoor drop box.

Remember you are not alone! I am also here for previous year returns, amended returns, or any other tax accountant issues you may have at this point, however complicated.

You can pay online. Venmo preferred. Paypal also accepted. You can also still pay by check.

Remember: Due to new IRS security regulations, I need a copy of your driver’s license to submit with your tax return. If you don’t have one, I can give you a list of alternative documents.

I look forward to working with you this year. Enjoy the lighter days and warmer season now upon us.

Tax Season 2020-2021

A few updates:

Due to the global health crisis, the government is currently behind in their correspondence. Please do not send money to the IRS based on a letter or email before contacting me to verify.

If you are more comfortable in a language other than English please let me know and I can request the government send you correspondence in the language you prefer.

This past year I was able to take multiple courses based on the updates to the tax codes this year, both generally and because of Covid-19. One thing that stands out is that the IRS wants people to indicate if they got money from the stimulus payment but that is NOT taxable. They are trying to ensure no one missed out on money owed to them. When you send me your information please let me know whether you received stimulus. Again, it is not taxable.

As in years past I am offering a variety of options to get your taxes done. Maybe people will not notice a difference. I can always talk on the phone or respond to email and will be easy to reach.

New this year: I am here for you virtually, but I am not taking in-person appointments.

We can meet on the phone, over Facetime or Zoom, or you can mail or email me your documents.

There is a secure and monitored drop box on the path in front of my home for those who prefer to physically drop off their documents.

You can pay online. Venmo preferred. Paypal also accepted.

You can also still pay by check.

As always, I am so grateful you trust me to do your taxes and I will be there for you. My prices are lower than most, because my business grows the old-fashioned way: through word of mouth from my friends and loyal clients. I still offer a $10 credit to any client who refers new clients.

My daughter, Emily, will be working with me again. She is a certified tax preparer and excited to start her sixth year in the family business.

This year the average charge for most returns will be $215.00 long form and $85.00 short form.

Call: 845-986-6158 or Email: joemartintax@gmail.com to schedule your appointment.

** Due to new IRS security regulations, I need a copy of your driver’s license to submit with your tax return. If you don’t have one, I can give you a list of alternative documents.**

Thank you all sincerely for your continued support and business. Here’s hoping the holiday season brings you joy and light.

Sincerely,

Joseph T. Martin

The Difference Between a Tax Credit and a Tax Deduction

Read a great post from Kailey Fralick on The Motley Fool breaking down the difference between two exciting things that reduce the amount of money you own the government. H/T @TMFKaily

32157159628_30737c4a57_o — Photo Credit Kevin Smith

From “What’s the Difference Between a Tax Deduction and a Tax Credit?”:

Tax deductions reduce your amount of taxable income in the eyes of the IRS, or in other words, how much money the government will consider in deciding what rate to use in taxing your income and how much cash to apply that rate to in tallying up your tax bill.

If you take a $1,000 tax deduction, your taxable income for the year will be reduced by $1,000. Depending on your annual income and how many tax deductions you qualify for, you could wind up in a lower income tax bracket, resulting in the government taxing a smaller percentage of your earnings.

Even if your tax deductions don’t change the bracket you occupy, allowing you to be taxed at a lower rate, they can still reduce the amount you owe in tax, by reducing your taxable income. You can figure out how much you’re saving by multiplying the value of the deduction by the income tax bracket you’re in. For example, a $1,000 tax deduction would be worth $220 off the tax bill for someone in the 22% income tax bracket.

I hope these definitions and examples help to clarify what these two commonly-heard tax terms mean–and what they could mean for you.

What is a tax credit?

Tax credits reduce the amount of taxes you owe, but instead of doing so by reducing your taxable income, tax credits reduce your actual tax liability, acting as a dollar-for-dollar reduction of your tax bill.

If you qualify for a $1,000 tax credit, the total in taxes you owe will be reduced by $1,000. So to answer the question at the start of this article: You’re much better off taking the $1,000 tax credit over the $1,000 tax deduction.

When it comes to tax credits, there are two main types: refundable and nonrefundable. Refundable tax credits offer the better deal, if you can take advantage of them, because if their value exceeds your tax liability, the government will actually refund you the difference. Nonrefundable tax credits may reduce your tax liability to zero, but the government does not refund you any excess once you hit zero.

One of the most common refundable tax credits is the earned income tax credit (EITC). It’s designed to help lower-income families, especially those with dependent children, save on their taxes. The maximum income requirement to use in qualifying for the EITC depends on your tax filing status and your number of qualifying children. This tax credit could be worth $519 for the 2018 tax year to couples with no children, $3,461 to families with one child, $5,716 to families with two children and $6,431 to families with three or more children. If these amounts exceed your total tax liability for the year, the government will give you the difference in your tax refund. This means it’s still worth filing a tax return if you will qualify for this benefit, even if your income for 2018 is less than $12,000, meaning you’re not legally required to file a tax return.

IRS Scam Alert

34704591454_223fb3ce2a_o IRS SCAM ALERT:

IR-2018-27, Feb. 13, 2018

WASHINGTON – The Internal Revenue Service today warned taxpayers of a quickly growing scam involving erroneous tax refunds being deposited into their bank accounts. The IRS also offered a step-by-step explanation for how to return the funds and avoid being scammed.

Following up on a Security Summit alert issued Feb. 2, the IRS issued this additional warning about the new scheme after discovering more tax practitioners’ computer files have been breached. In addition, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. The IRS Criminal Investigation Division continues its investigation into the scope and breadth of this scheme.

These criminals have a new twist on an old scam. After stealing client data from tax professionals and filing fraudulent tax returns, these criminals use the taxpayers’ real bank accounts for the deposit.

Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.

Different Versions of the Scam

In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency.

In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

As it did last week, the IRS repeated its call for tax professionals to step up the security of sensitive client tax and financial files.

The IRS urged taxpayers to follow established procedures for returning an erroneous refund to the agency. The IRS also encouraged taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts. Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.

Here are the official ways to return an erroneous refund to the IRS.

Taxpayers who receive the refunds should follow the steps outlined by Tax Topic Number 161 – Returning an Erroneous Refund. The tax topic contains full details, including mailing addresses should there be a need to return paper checks. By law, interest may accrue on erroneous refunds.

Tax Season 2018

33627520581_39a17f0720_o This is a very different year and confusion surrounding taxes seems to be at an all-time high. I’m writing not only because tax season is on its way, but to tell you that I am here to help.

I am now accepting appointments in my home office for tax preparation.
Call: 845-986-6158 or email: joemartintax@gmail.com to schedule your appointment.

You can do your taxes via Facetime / email and pay online via Paypal.

You can also process with me by mail.

→$10 credit for using Facetime, email, or postal preparation.

→$10 credit to any client who refers new clients to my business.

As always, I’m also happy continue to meet with you in-person.

I am very grateful to all of you who have already referred your friends and family.

Speaking of family, my daughter, Emily, will be working with me again this year. She is a certified tax preparer and excited to start her 3rd year in the family business.

The return price varies depending on the service. This year the average charge for most returns will be $200.00 long form and $80.00 short form.

**Please remember that due to new IRS security regulations, you need to supply a copy of your driver’s license for me to submit with your tax return**