Stephen Merritt, CPA, PC | Certified Public Accountants | (757) 420-5778
233 Business Park Drive, Suite 104, Virginia Beach, VA 23462
Your monthly news & updates
- IMPORTANT: YOUR TAX INFORMATION & THE EMAIL SUBJECT LINE
- Income Tax Deductions vs. Tax Credits: Which One is Better?
- Knowledge Panels
- February Days
- Office Hours
- 2023 Office Food Tournament
IMPORTANT: YOUR TAX INFORMATION & THE EMAIL SUBJECT LINE
When emailing our office your tax information, please include your name (last, first) and the year 2022 in the subject line of the email.
Subject: DOE, JANE 2022 – TAX INFO
This is to help prevent your important tax emails from being filtered into our junk/spam folders.
We greatly appreciate your cooperation regarding this matter!
Income Tax Deductions vs. Tax Credits
Which One Is Better?
While a deduction can reduce the amount of taxable income, credits can directly reduce the amount of tax owed, so they offer a greater tax benefit. Sometimes, credits can be refundable, which means that they might generate a refund for you even when you don’t owe tax. Below are some examples of different types of credits and deductions available for individual taxpayers. Keep in mind that each credit and/or deduction has specific criteria that need to be met in order to qualify.
Credits for Individuals
- Child Tax Credit
- Dependent Care Credit
- Earned Income Tax Credit
- Adoption Credit
- Saver’s Credit
- Foreign Tax Credit
- Excess Social Security and RRTA tax withheld
- Credit for Tax on Undistributed Capital Gain
- Credit for Prior Year Minimum Tax
- Residential Energy Credits
- Plug-in Electric Drive Vehicle Credit
- Premium Tax Credit (marketplace health care insurance credit)
- American Opportunity Credit and Lifetime Learning Credit
If you feel you might qualify for one of these credits, be sure to ask your tax preparer about them.
Deductions for Individuals
The IRS provides each taxpayer with a standard deduction that reduces their adjusted gross income so they pay less tax. The amounts change each year, and are determined by filing status. In the 2022 tax year, here is a sampling of the standard deduction amounts.
Single Married Filing Separately $12, 950
Married Filing Jointly; Qualifying Widow(er) $25,900
Head of Household $19,400
Most taxpayers take the standard deduction, but the law allows you to take more if you have more qualifying deductions than the limits above. These are called itemized deductions and can include personal property tax, real estate tax, sales tax, charitable contributions, gambling losses, interest expense, home mortgage interest paid, and moving expenses, to name a few.
Students and teachers may be able to take education deductions, which include student loan interest paid, work-related educational expenses, and educational expenses paid by a teacher.
Self-employed individuals can claim work-related deductions related to business expenses, business use of car, and business use of home on Schedule C.
Health care deductions, such as medical and dental expenses or Health Savings Account (HSA) contributions can be deductible to those who participate in these plans.
For investors, deductions may include sale of home, Individual Retirement Arrangement (IRA) contributions, capital losses, bad debts, qualified opportunity zone investments, and debt forgiveness.
If you’d like to study deductions and credits on your own, the IRS website is a wealth of knowledge. If you don’t want to do that, you can always ask your tax professional. Filling out your tax organizer in a complete and thorough manner is the very first step to helping your tax pro identify the plethora of credits and deductions you may qualify for.
Are you looking for new ideas to market your business? If so, knowledge panels might be something to consider. Most people haven’t heard of them, but they are widely used in search results every day.
Knowledge panels are an invention from Google. They are the information panels that appear on the bottom right corner of your search results when you search for certain people or brands. They are different from the business profiles provided by Google Business Profile.
Knowledge panels display information that Google has collected in its Knowledge Graph, which is one of Google’s information databases. Search for your favorite author or your Congressperson, and you will be able to see an example of a knowledge panel. Famous historical figures and extremely popular entertainers may have more of an entire page displaying all of the information about them, but there will typically also be a right column of text (you may have to scroll a bit to see it), which is the knowledge panel.
How can you use knowledge panels in your business? When your leadership or brand is represented by a knowledge panel, it brings instant credibility to your organization. It boosts reputation and helps to build trust with all stakeholders. It increases your firm’s visibility.
Who typically has a knowledge panel? If you are an author of a book that has a formal ISBN (International Standard Book Number), you will automatically get one. If you are a leader of certain organizations, you will also get one. If your brand is well-known, it will have a knowledge panel.
You can’t create a knowledge panel, but you can claim it once it appears. Google determines who receives a knowledge panel. But you can “lobby” for one, and there are marketers you can hire to help you execute the steps it takes to get one. The main thing is to be active and visible online.
If you already have a knowledge panel, there are procedures documented on Google Help that you can follow to claim it. You can also make edit suggestions and submit them to Google. You can’t directly edit your knowledge panel; Google has final control over what is displayed.
Hopefully, you are now more aware of knowledge panels and how they can help your business become more visible.
Here are some Days to Remember in February!
February – Monthly Awareness
Here are just some few things that are observed monthly in February:
American Heart Month
Black History Month
National Cancer Prevention Month
February 1st – Imbolc
Imbolc welcomes the first wave of spring and honors the Celtic Goddess Brigid. Brigid was evoked in fertility blessings and oversaw poetry, crafts and prophecy and was considered on the most powerful Celtic Gods. Some ways to celebrate Imbolc:
Feasts and Fire: Imbolc is a time of feasting, and fire recognizes the returning power of the sun
Spring clean your home
Visit a stream or river
February 2nd – Groundhog Day
Groundhog Day is when we ask are we in for six more weeks of Winter. Only Groundhog Punxsutawney Phil knows the answer! This holiday is derived from a Dutch superstition too!
2023 Results: Punxsutawney Phil predicts 6 more weeks of winter!
February 14th – Valentine’s Day
Valentine’s Day is a day to shower your significant other with love and tokens of your affection! Take the day to show each other how much you care for one another!
February 21st – Mardi Gras
Mardi Gras is French for “Fat Tuesday” to reflect the practice of eating rich, fatty foods before the ritual fasting of the Lenten season. This celebration goes on in many parts of the world in various forms.
February 27th – National Pokémon Day
Gotta Catch Em’ All
Pokémon Red and Green was first released in Japan in 1996 and was later animated into a T.V. series in Japan in 1997. Cards then came out in 1998, creating one of the biggest fads of the 1990s.
What’s your favorite Pokémon?
My favorite are Vaporeon, Bulbasaur, and Sprigatito! – Vikkie
Tax Season Hours Begin January 2, 2023
Monday – Friday
8 AM to 5 PM
2023 Stephen Merritt CPA Food Tournament
Last year, the Stephen Merritt CPA office did a Brownie Tournament during the tax season and it was a hit!
This year, we’ve decided to do another food based bracket style tournament!
So what food will our office be trying this year?
Mac and Cheese!!
We’ll be trying and comparing a variety of box and homemade mac & cheese, so stay tuned!