tax benefits

3 Tax Benefits for New York Veterans

Current and former members of the military are eligible for certain tax exemptions.

“These exemptions and credits are one small way we can show our gratitude to the brave and dedicated individuals who currently serve or have served in our military,” said Acting Commissioner of Taxation and Finance Nonie Manion in a 2017 press release.

Photo by Benjamin Faust on Unsplash

Photo by Benjamin Faust on Unsplash

In today’s post, we’ll examine a handful of the exemptions available for New York veterans.

Property Tax 

As many as half a million New York veterans benefit from property tax exemptions, many of which are offered by local governments.

Depending on the circumstance, the property tax burden of a wartime veteran could be up to 15% or even as high as 25% if the veteran serves in a combat zone.  Cold War veterans (between 1945 and 1991) could see up to 15% in exemptions.

If the veteran was disabled in the line of duty, they could see up to 50% off in exemptions.

How do these property tax exemptions work?

In September 2017, Gov. Cuomo signed a bill that allowed the 679 school districts the option to allow exemptions for Cold War veterans for the entirety of the time the veteran owns the property. Prior, it was 10 years.

To find out which of these exemptions applies to you, you’ll need to contact your local assessor’s office. Visit NYS’s Municipal Profiles website to get the contact information you need.

Military Pay  

If your permanent home was in NYS before you entered the military, you don’t have to pay income tax on your active-duty pay. But it isn’t quite that simple.

You have to meet ALL three of the following conditions:

  • Didn’t have a permanent home in NY

  • Maintained a permanent abode outside of NY (this excludes military quarters like barracks, BOQ, etc.)

  • Spent less than 30 days in New York during the year

Basically, you need have not lived in New York almost at all for the entirety of the year to be eligible for this perk. You also had to be living somewhere off-base/ship to not owe income taxes.

Hire a Veteran Credit 

There are two types of hire a veteran credit. They are:

  • Corporations subject to franchise tax

  • Individuals, estates and trusts under personal income tax laws

This credit applies if you or your business:

  • Hires a qualified veteran before January 1, 2020

  • Employees the qualified veteran for 35 hours

If the veteran is disabled, the credit is 15% of the total wages paid during the first full year of employment. That amount can’t exceed $15,000 per veteran.

If the veteran isn’t disabled, the credit is10%  of the total wages paid during the first full year of employment. For nondisabled veterans, the credit is capped at $5,000.

These are just a handful of the tax benefits, credits, and exemptions that veterans can take advantage of. Reach out to one of our tax professionals and we’ll ensure you’re getting the most tax benefits from your service.

 

6 FAQs About 529 College Savings Plans

College is a large expense and one worth planning for, especially if you want your future college graduate to start their lives with minimal debt. One common way to prepare for such an expense is to open a 529 college savings plan.

Photo by Ruijia Wang on Unsplash

Photo by Ruijia Wang on Unsplash

What is a 529 plan?

College savings 529 plans are state-sponsored savings accounts that offer both tax and financial aid benefits.

What states run a 529 program?  

Almost every state has a 529 program, each with different perks and benefits. You can pick based on perks and you don’t need to live in the state you opened the account in.

You can look at 529 plan options using this tool from SavingforCollege.com.

What are the two types of college 529 plans?

There are two types of 529 plans, they are:

  • College savings plans – This plan is similar to a Roth 401k or Roth IRA by allowing you to contribute after-tax income in the form of mutual funds and other types of investments. There are a number of investment options to choose from and the 529 account will go up and down and value according to those investment choices. The money is this account is available for tuition, books, and often housing.

  • College prepaid tuition-  This plan can be used to pre-pay all or part of the costs of an in-state public college education. Sometimes, they can be converted for use at private or out-of-state colleges.

What are the perks of using a 529 savings plan?

Each state provides slightly different incentives for its 529 programs. But some of the overall benefits include:

  • Large income tax breaks (for federal and often state taxes)

  • The donor stays in control of the account until its use

  • They’re low maintenance

When can you start them?

You can start one of these savings plans at any time. Most 529 programs are “set it and forget it” meaning the investments come straight out of your paycheck or bank account.

Where can I learn more about college 529 plans?

There are a lot of online resources for comparing and ranking different 529 programs. You can reference one of these, or reach out to your friendly neighborhood tax professionals. We can help you select the best option for you.

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Establishing Residency in Boynton Beach, Florida For Tax Purposes

Boynton Beach, Florida

Moving to Boynton Beach Offers Premium Tax Benefits

Imagine having year-round access to miles of sandy beaches, championship golf courses and waterfront parks, not to mention great weather. Sound too good to be true? Not if you live in Boynton Beach, Florida. Boynton Beach is a mid-size community located in Palm Beach County. Best of all, residents receive all the great tax benefits that Florida has to offer. This helps to make setting up a residency near the beach very affordable.

Florida Tax Benefits

Income Tax

Florida is one of the few states in America that does not have a state income tax. While you will still have to pay federal income tax, you won’t pay state income tax on your Florida wages, pension or social security benefits.

Inheritance Tax

Another cost savings benefit Floridians receive is no inheritance tax. The Florida State Constitution bans this type of separate taxation, so you will never have to worry about state death tax whether you are planning to inherit an estate someday or leave assets behind for your loved ones.

Homestead Exemptions

Florida has what is referred to as a “homestead exemption.” This exempts homeowners from paying property taxes on the first $50,000 value of their property. You must apply for this exemption in order to obtain this special benefit.

Establishing Residency

According to the Pension Source Tax Act of 1996, it is illegal for another state to try to levy their taxes on you if you live in Florida but receive a pension from another state. However, it is crucial to establish an official residency in Florida. If you do not set up your residency properly, you risk having another state trying to levy their taxes on you. This is especially true if you have a dual residency with another state.

Here are several things you can do to establish residency and ensure you get all the tax benefits you deserve.

  • Obtain a Florida driver’s license and vehicle registration.

  • Register to vote in Palm Beach County.

  • Apply for the Homestead Exemption (if you own property in Florida).

  • Establish a bank account in Florida and change your direct deposits to this account.

  • File federal income tax using a Florida address.

  • Make sure you are physically present in the state for at least 183 days.

  • File a domicile with the Palm Beach County Clerk of Courts and submit a copy to your previous county tax office.

Herman & Company CPA’s, P.C. can help answer any questions you have about establishing residency in Boynton Beach, Florida. Our team of financial professionals can assist you with everything from tax planning and preparation to estate and retirement planning. We not only will help you save money by minimizing your tax burden, but we will provide professional advice to help you plan for your future.

 

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.