Client message-January 2023
HAPPY NEW YEAR!
Our best wishes for good health, happiness, and prosperity in 2023.
Tax prep season has arrived. Please start to gather your materials so that you can take advantage of the earliest opportunity to move forward with completion of the tax returns.
There is hope that this season will be better than the last three years. Indications are that IRS might open on time and NJ software may be released in January.
IMPORTANT! ANCHOR PROGRAM. Deadline for filing has been extended to Feb 28. If you are eligible and have not filed, please do so immediately.
This program relates to NJ property tax relief for the 2019 tax year. If you were a renter/tenant with NJ gross income of not more than $150,000, or if you were a homeowner on Oct.1, 2019 with income of $250,000 or less, you are entitled to the benefit. For more information contact NJ ANCHOR hotline 1-888-238-1233; or
https://www.state.nj.us/treasury/taxation/anchor/index.shtml; or send me an email.
NEW FOR NJ
For Tax Year 2022, NJ has a new Child Tax Credit for families earning up to $80,000 a year. The refundable credit ranges from $100 to $500 per child age 5 or younger.
Also new is the NJ College Affordability Act. It has provisions for deductions to a NJBEST trust account; principal and interest payments on a NJCLASS student loan; and tuition payments up to $10,000 if attending a NJ institution of higher education.
Pension/Retirement Exclusion: If you were age 62 or older and income is $150,000 or less, you may have an income exclusion of up to $75,000 if single, or $100,000 if filing a joint return.
NJ allows an exemption of $1,000 for filers and $1,500 for each of their dependents, plus an additional $1,000 if over 65, blind or disabled. An additional $1,000 is granted for fulltime college student dependents under age 22. The veteran’s exemption is $6,000. If you are a veteran honorable discharged from active duty in the Armed Forces you are entitled to this exemption. Even if you did not qualify under previous rules, you are probably entitled now.
Property taxes: The NJ deduction is capped at $15,000. If you live in Franklin Twsp., I will pull your tax payments from the Township records. Be sure to include your total rent paid with your documents.
Personal exemptions continue to be suspended through 2025; the expanded standard deduction is in place. For 2022 the basic standard deduction is $13,850 for single or MFS; $27,700 for MFJ or QSS; HOH is $20,800. Additional amounts for age 65 or older are $1,500 per person if MFJ, or $1,850 if single; $15,700 for a single adult over 65.
Capital gains rates for MFJ with incomes of $83,350 or less is zero; over $83,350- $517,200, rate is 15%. For Single filers, cutoff is $41,675 for zero percent; $459,750 for 15%.
Most filers will benefit from the standard deduction rather than itemizing. With the NJ pension exclusion, many returns will not have taxable income sufficient to claim a deduction for medical expenses. If you prepare a medical expense submission, please total your expenses by the standard categories; please do not send me the receipts without talking with me first. The medical mileage deduction is 18 cents for Jan-June and 22 cents for July -Dec.
In tax year 2021 there were several special provisions that were not extended. Child Tax Credit is $2,000 per qualifying child under the age of 17. The dependent care expense limitation is $3,000 for one child and $6,000 for two or more children.
SomersetTaxServices.com website has substantial information both in the newsletter and financial calculator sections. The sign-in portal to your secure folder is also accessed there.
For 2023 we offer the following options for receiving your tax materials.
The secure drop box will be on the front patio at my home. Feel free to pull in the driveway on Monday through Saturday, between 7 am-7 pm; Sunday afternoon 2-5pm. Please notify me when you drop-off.
I have renewed the lease on the Easton Ave. location; materials may be dropped through the mail slot at my office anytime during regular business hours. The building is open from 9-6 on Monday through Friday. It may be open other times, but that is not guaranteed.
Mailing materials through US Priority mail works well. Please mail to my home. Packages requiring my signature may be returned to you. I do not travel to Post Office, FedEx or UPS locations to retrieve packages. If I know you have sent the package, I will try to be available. If you need us to pick up your package, please send an email and we will discuss best times.
BEST option for sending the materials is through the portal accessed from the website. The username assigned last year is still active for your secure folder.
In-person drop-off appointments are available in February only. Suggested best times for the office are Wednesday 11-5 and Sat 10-2. I work from home more often than not. On Tuesdays, I have an out-of-town commitment and will not be available.
Completion time: Tax return materials are processed as first in, first out. Returns are usually completed in five days from when the work commences. Please know this does not mean five days from the drop-off. For example: If there are twelve people in front of you, the work on yours will commence after those twelve are completed. Please ask your position in the queue and estimated completion date. As we move toward late March and April, it may take 12-15 days to complete the returns. Final date to give me the materials is March 27. Signed Forms 8879 to authorize filing must be received by April 14. If you require an extension, payment must be made by April 17.0.
Filing the return and scheduling payments are two separate steps. If you file in February, you can still schedule payments to IRS as late as April 18.
I look forward to working with you again this year; hope to hear from you soon. Please remember that email is best option for contact; phone calls will be returned within 48 hours.
Warm Regards, Shirley Pietrucha