A Tax Relief Guide for Veterans

You’ve served your country, now it’s time for your country to serve you. Unfortunately, it doesn’t always go that way and veterans fall through the cracks. Fortunately, there are some companies out there who want to assist you. And with tax season right around the corner, we’d like to share some of the tax relief services you can take advantage of. Keep reading our Tax Relief Guide for Veterans to learn more.

Top 7 Tax Relief Service Providers

1. Anthem Tax Services

Anthem Tax Services is there to help if you find yourself in debt with the IRS. Instead of fighting the IRS on your own after receiving a lien or wage garnishment, you can go to Anthem Tax Services and they’ll fight the battle for you.

What we like:

  • They provide a free case review
  • They work remotely, so you don’t have to go to their office
  • Helps with tax debt as low as $5,000

They assist with:

  • Asset Seizure / Tax Levy
  • Bank Account Levy
  • Tax Lien
  • Tax Audit
  • Unfiled Return
  • Wage Garnishment

What we don’t like:

  • They don’t offer audit representation
  • They aren’t upfront about all their service costs—$250 is the minimum service charge

2. Community Tax Relief

Community Tax relief is a nationwide tax resolution service. They’ve worked with over 50,000 clients and saved taxpayers more than $400 million. If you need tax debt relief, help with tax preparation or accounting services; Community Tax Relief may be the company for you.

What we like:

They offer a lot of services, including

  • IRS Debt Settlement
  • Tax Lien Help
  • Negotiate Payroll Taxes
  • Tax Resolutions
  • Offer in Compromise Tax
  • Penalties & Interest
  • IRS Audit Defense
  • Income Tax Preparation
  • Stop Wage Garnishment
  • Prevent Levy & Seizure
  • Tax Extensions
  • Custom Tax Solutions

What we don’t like:

  • They don’t list a base price on their website, but the average cost is between $2,500 and $4,500
  • Negative reviews in regards to customer service

3. Fresh Start Initiative

If you’ve found yourself in tax debt, Fresh Start Initiative can help resolve it. They offer a free consultation, and with no obligation, you can learn about the different programs available to you. Fresh Start Initiative also gives you a big picture of how scary tax debt can be, but lets you know you’re not alone. In fact, they claim there are approximately 8 million individuals, along with business owner in tax debt.

What we like:

They offer several tax relief services, including

  • Tax Reduction
  • Installment Plans
  • Postponement
  • Innocent Spouse Relief
  • Tax Lien Release
  • Tax Levy Release
  • Penalty Abatement

What we don’t like:

  • They don’t offer audit representation
  • They aren’t accredited by the Better Business Bureau

4. Optima Tax Relief

If you’re looking for a company that has a good reputation, Optima Tax Relief might be the company for you. Not only are they accredited by the Better Business Bureau they also have an A+ rating. They’re actually accredited by a lot of businesses, including Business Consumer Alliance.

What we like:

  • They offer a lot of educational resources outside of settling your debt with the IRS
  • A+ rating with the Better Business Bureau
  • Free tax consultation

What we don’t like:

  • They haven’t been around as long as some other companies—but they’re making a good name for themselves
  • They have a minimum debt requirement of $10,000

5. IRS Tax Debt Pros

The IRS can ruin your day if you don’t know how to handle them or your tax debt. Fortunately, there are companies like IRS Tax Debt Pros, who can help, if you have more than $10,000 in tax debt. They can help by stopping your garnishments levies and seizures immediately through strategy sessions and consultations and showing you different IRS Tax Relief programs you may qualify for.

What we like:

  • A+ rating with the Better Business Bureau

What we don’t like:

  • You must have at least $10,000 in debt with the IRS
  • You have to call them to get any information

6. Honest Tax

Honest Tax offers a lot of services, and if you’re in deep with the IRS, this is a good thing. Some of those services can lead to tax relief reduction or even complete elimination of your tax debt.

What we like:

  • They’ve been in business for over 50 years
  • Consultation is free
  • They offer a 10-day refund policy*
  • They offer audit representation

What we don’t like:

  • They don’t offer tax levy release services

7. Urgent Tax Help

Tax relief companies are generally big on making money off your debt, and they’ll take on a lot of clients, even if they can’t really help, just to make a little extra cash. Urgent Tax Help is not one of those companies. In fact, they’re very selective about who they work with. It may seem like a bad thing, that they won’t help all qualifying individuals, but at least you know if you’re an accepted client, they’ll be dedicated to you and not stretched thin with the other 10,000 clients they have. Out of the 4,000 individuals seeking representation each month from the company, they claim to only take on about 100-120 clients from that group.

What we like:

They offer several tax services, including:

  • Tax Reduction
  • Installment Plans
  • Postponement
  • Innocent Spouse Relief
  • Tax Lien Release
  • Tax Levy Release
  • Penalty Abatement
  • Offers in Compromise
  • Audit Representation

What we don’t like:

  • They haven’t been around long—since 2014
  • Not accredited by the Better Business Bureau—but they do have an A+ rating

Do veterans get a tax break?

Well, the answer to that would depend on what state you live in and what type of tax break you’re referring to. If you’re talking property tax, then chances are, unless you’re 100% disabled with the VA, you won’t get a tax break. Of course, if you live in Texas, you actually get a huge tax break and even save some money for the smallest disability rating. If you’re wanting to save money on wheel tax, in some cases, you might save some money being active duty, but not as a veteran, unless you’re disabled. There are also local tax services willing to provide tax advice and help you file your taxes for free, simply for serving or being a veteran of the armed forces. Your best option is to look up your state and local tax service providers and ask about any discounts or tax breaks you’re eligible for.

If you’re still in, you might want to consider viewing our Tax Deductions for Service Members guide here.

Property Tax Relief

Property taxes can be steep. If you’re a disabled veteran, there’s a chance you might not have to pay all or any of your home’s property taxes. Some states require you to have 100% disability with the VA, while others, like Connecticut, will give you property tax relief for serving at least 90 days honorably, under active duty and during wartime. That alone exempts you from $1,500 in taxes. If you have a disability, you qualify for more.

If you’re interested in finding a lender for a VA home loan, check these guys out.

  1. Veteran’s United
  2. JG Wentworth
  3. Quicken Loans
  4. Lending Tree 
  5. NASB
  6. Cross Country
  7. Rocket Mortgage

Vehicle Tax Relief for Disabled Veterans

If you’re a veteran or active duty member, you may qualify for a tax exemption or tax relief for your vehicle. This, of course, will depend on what state you live in. For instance, as a member of the military, you don’t have to pay wheel tax in the state of Tennessee. Your best bet is to let your local DMV know your military or veteran status, and find out if there’s any way you can save money when it comes to your vehicle.

Property Tax Relief Credit

If you live in the state of New York, they offer something called a property tax relief credit. You can qualify for this credit by living and paying taxes in certain areas. While you don’t need to be a veteran to qualify for this tax relief, it shows that there are tax breaks everywhere, and for everyone, you just have to be willing to do a little research and find them for yourself. Simple things, like talking to your local tax representative can help point you in the right direction, and possibly save you more than just some pocket change. 

State Tax Relief Hardship Program

If you are having a hard time getting by, financially, the IRS has a program you may be interested in when it comes to your taxes. This service is actually available to everyone, not just veterans, but it’s worth mentioning. When tax season comes around, no matter if you can afford to pay, make sure you file. The fee for not filing your taxes is greater than the fee for not paying. However, if after filing, you realize you won’t be able to meet your basic needs, you can consider filing for the IRS’ hardship program. If you qualify, you’ll still be required to pay any interests fees that build up, but you won’t have to worry about the IRS putting a lien or levy on any of your assets.

Compensated Work Therapy

Compensated Work Therapy or CWT is a service offered to veterans living with any mental or physical disabilities. This program can be utilized by any veteran who qualifies for VA health care, which means, even if you don’t have a 10% VA disability rating or above, you can still qualify for the program.

CWT consists of several programs and depending on your situation, is something worth looking into as a veteran.

Transitional Work (TW): TW is a time-limited service. During the program, the veteran is matched to a work assignment, where personnel at the work site will supervise them. The veteran does not get traditional employee benefits under this program, but they do receive pay at minimum wage under state or federal guidelines, whichever is greater. The goal of this program is to help veterans move from vocational work assignments to competitive employment.

Supported Employment (SE): SE is a great service provided to veterans with PTSD or TBI, who are having a hard time functioning independently in a work environment as a result of their condition. Unlike TW, which is time-limited, this program is ongoing and includes:

  • Vocational assessment
  • Rapid/individualized job search
  • Job development and placement
  • Assertive engagement
  • Follow-along supports provided in the context of clinical treatment

Community-Based Employment Services (CBES): CBES is a program intended for veterans who need employment support, but don’t necessarily have a psychosis diagnosis. The point of this program is to get veterans into competitive employment opportunities. During the program, the veteran will continue receiving clinical support along with:

  • Skills training
  • Job Development
  • Job Placement
  • Supportive counseling
  • Interventions within the work environment

Vocational Assistance: Vocational Assistance is offered to groups and individuals. The service is short-term and designed to help veterans realize what skills they have, the resources available to them, attitudes and expectation for finding employment. The service also helps veterans with the interview process and shows them how to succeed in their job without needing to continue the job search, job development or follow-up support.

Supported Self-Employment (SSE): SSE is a guidance program. The services are intended to help veterans via guidance on:

  • Business practices
  • Training
  • Networking opportunities
  • Linkage with community financial institutions

SSE gives veterans a choice through preferred work activities, with flexible hours and schedules, self-management and disability accommodations when they’re needed while potentially generating a substantial income.

Supported Education (SEd): SEd is intended to help veterans with education and training programs to help them achieve instructional goals. The program also works to link veterans and educational facilities.

The good thing about these programs is your income isn’t counted as income, according to the IRS. This means any money you make under a CWT program does not need to be reported to the IRS come tax time.

Education and Training

Remember all that training you did in the military and all those classes you took. Depending on when you took them, you might be able to deduct your payments from your taxes. For instance, say you took a bunch of classes back in August, paid out a bunch of money for books, got out in September, and now it’s almost tax season. Just because the military paid for those classes, doesn’t mean you can’t make a deduction to your taxes. If the school you went to/are going to sends you a 1098-T, make sure you include the amounts in your taxes. You save more by being a full-time student and even more if you’re working on your first degree. There are savings everywhere out there, now’s the time to crack open more than your school book, if you want to take advantage of all the tax breaks you may have known nothing about otherwise.

Earned Income Tax Credit

Apparently, only 1 out of every 5 people eligible actually claim an earned income tax credit. If you meet the qualifications, you could get extra money back from the IRS and not have to pay as much money on your taxes. The qualifications change every year, so if it’s something you’ve applied for and were considered ineligible; you might be eligible this year. It’s simply a way for low-income individuals and families to save money on taxes. You could end up getting a check from the IRS for over $6,000, depending on how much you make and how many qualifying children you have.

There’s a misconception that this tax credit is only available to individuals with children. However, if you’re single-working, and have low income, you may qualify, depending on that year’s set minimum income qualification.

Taxable Veteran Benefits

Unfortunately, not all veteran benefits are non-taxable.

Taxable benefits include:

Unemployment Compensation

Military Retirement Pay

Non-taxable income includes:

  • Military Retirement Disability Pay

Veterans Affairs Benefits, Including

  • Education, training, and subsistence allowances.
  • Disability compensation and pension payments for disabilities paid either to veterans or their families.
  • Grants for homes designed for wheelchair living.
  • Grants for motor vehicles for veterans who lost their sight or the use of their limbs.
  • Veterans’ insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran’s endowment policy paid before death.
  • Interest on insurance dividends left on deposit with the VA.
  • Benefits under a dependent-care assistance program.
  • The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001.
  • Payments made under the compensated work therapy program.
  • Any bonus payment by a state or political subdivision because of service in a combat zone.

Publication 525

If you’re not sure about what income is taxable or not, your best option is to go directly to the IRS, specifically Publication 525. Now, we don’t say this often about government documents, but it’s actually pretty straightforward as to what you must and don’t have to claim on your taxes. For instance, if you’re a veteran and receiving any type of compensation from the VA, the publication clearly states you don’t have to claim that as income on your taxes. It’s a long read, but at least it doesn’t feel like you’re reading Chinese—unless of course, you can read Chinese, then just pick another language you don’t know.

Publication 907

Publication 907 is another helpful document, especially for many veterans. If you have a disability, this is the form for you, as it highlights tax information dedicated to individuals with disabilities.

Are disabled veterans exempt from sales tax?

In some states, yes a disabled veteran is exempt from paying sales tax. However, this isn’t the case everywhere, and you need to be prepared to show your veteran status. Finding these exemptions can be difficult in many cases. Your best option is to ask the companies you purchase items from directly.

Reporting VA Disability on your Taxes

When it comes time to buy a home, car, apply for a personal loan, etc., your VA disability counts as income, because it’s a constant cash flow. However, when it comes to tax season, don’t include it as your income. In fact, don’t include any income you receive from the VA, to include education benefits.

 

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