Tax Preparation
America’s annual visit from the taxman is less than two months away. With sweeping tax law changes in effect, the impact on the taxpayer has the potential to not only be stressful, but interesting. Many consumers will be looking to see which typical deductions will make it through the new filters and which ones will be automatically rejected.
To get the U.S. ready, the Internal Revenue Service (IRS) has created the Tax Time Guide -- a series of resources to help taxpayer...
Taxpayers were supposed to pay less in taxes in 2018 under the latest overhaul of the tax system. But so far, federal income tax refunds don’t reflect that.
New data from the IRS show that returns are lagging the pace of last year’s filing -- not surprising given the government shutdown. But the refunds that have been sent out so far are about 8 percent less than at a similar point last year.
Refunds to date have averaged $1,865 compared to $2,035 for 2017 returns. On the...
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Crooks have been using stolen Social Security numbers to try to get information that could be used to steal tax refunds, the Internal Revenue Service said.
Most of the automated attacks were aimed at generating E-file PINs, the IRS said. The PINs would then be used to generate phony returns or to waylay refunds.
The Social Security numbers were used in abot 464,000 automated attacks, of which about 101,000 successfully generated a PIN, the IRS said.
The agency, which is no stranger to hacking, said that no personal taxpayer information was disclosed in this incident and said that affected taxpayers would be notified by mail.
You may have mail
Consumers should note that the official notification will come via the U.S. Postal Service. Scam artists will soon be out in force, sending emails and calling taxpayers claiming to be the IRS.
Last May, the IRS admitted that hackers had stolen the personal data of as many as 334,000 taxpayers after initially saying only 100,000 had been affected.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) says he will question IRS Commissioner John Koskinen about the attack at a hearing today, the Wall Street Journal reported.
“While it appears that the IRS was able to successfully block this attempted breach this time around, it’s past time we fundamentally rethink our approach in authenticating taxpayers and processing tax returns,” Mr. Hatch said, according to the Journal.
Crooks have been using stolen Social Security numbers to try to get information that could be used to steal tax refunds, the Internal Revenue Service said.
Most of the automated attacks were aimed at generating E-file PINs, the IRS said. The PINs would then be used to generate phony returns or to waylay refunds.
The Social Security numbers were used in abot 464,000 automated attacks, of which about 101,000 successfully generated a PIN, the IRS said.
The agency, which is no...
It is the season -- tax season, that is. You are probably looking around your house thinking, "Hmmm what else can I deduct?"
Well, that furry friend of yours might be worth more than you think. Many people ask if they can deduct their pet. The short answer is no, but there are some exceptions. Don't just take our word for it, though. Talk to an accountant before trying to claim any of the deductions mentioned below.
Did you move?
Moving always gives you something to deduct. Typically, though. the move must be for work. The new job has to be at least 50 miles from the old one and you might be able to deduct the cost of moving your pets. A special form is needed.
Do you have a service dog?
If your dog is sick the medical expenses aren't deductible. But if you need a dog because of an illness or disability of your own, the expenses of keeping that animal can become legitimate medical expenses.
All of the costs of vet care, grooming and any other expense that animal needs to help you assistance could qualify.
Therapy animals also fall under this category, as long as you have a medical diagnosis. There are some exceptions though. There is a special threshold for deducting medical expenses -- 10 percent of adjusted gross income for those under age 65 -- before you can deduct guide-animal costs.
Is your dog a guard dog?
A guard dog is not one that just watches for the mailman. It has to be one that is protecting a business property. There are certain breeds that qualify. Although Chihuahuas bark a lot, I doubt the IRS would be too receptive.
Pet rescues or an animal shelter.
Most animal shelters are nonprofits, so if you decide to be a foster parent, you might be able to write off some expenses as a charitable donation. This includes food, supplies and any vet bills. You may also be able to get some mileage expenses.
The key is to keep good records of going back and forth to do work at the shelter or the IRS may challenge your claim. They may challenge your claim regardless so record-keeping is just a good habit to develop.
Is your pet your profession?
Do you show horses or dogs for a living? Are you an animal trainer? Do you breed cats? All of these are legitimate occupations. You might be able to count some or all of your pet expenses against the income they generate.
Be careful because there is a difference between a hobby and a business. Hobby losses are deductible only if you have gains and the hobby has to be a miscellaneous deduction, which can limit the amount you can actually claim. But you may be able to deduct all of your expenses for a business, even if it results in a net loss.
Every situation is different and you definitely want to talk to an accountant before you do this to avoid problems down the road.
It is the season -- tax season, that is. You are probably looking around your house thinking, "Hmmm what else can I deduct?"
Well, that furry friend of yours might be worth more than you think. Many people ask if they can deduct their pet. The short answer is no, but there are some exceptions. Don't just take our word for it, though. Talk to an accountant before trying to claim any of the deductions mentioned below.
Did you move?
Moving always gives you somet...
When you're ready to fill your federal income tax return for 2015, you have plenty of options – some of them you pay for, but some are free.
The Internal Revenue Service (IRS) encourages electronic filing and offers several resources to help.
You may be eligible for free help preparing your tax return from Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs listed here.
Volunteer assistance available
The VITA program offers free tax help to people who meet income requirements – generally $54,000 or less, persons with disabilities, the elderly, and limited English speaking taxpayers who need assistance in preparing their own tax returns. The volunteers are certified by the IRS and provide free basic income tax return preparation with electronic filing.
The TCE program provides free tax help for all taxpayers, focusing on those who are 60 years of age and older. It specializes in dealing with questions about pensions and retirement-related issues unique to seniors. The volunteers are IRS-certified and are often retired people associated with non-profit organizations that receive grants from the IRS.
The IRS also provides help for low-income taxpayers who have tax issues with the agency and can't afford representation. This program is called the Low Income Taxpayer Clinic (LITC) and you can find details about it here.
Hiring a tax professional
If you are hiring a tax professional to help you with your return, the IRS reminds you that people offering these services have different levels of skills, education, and expertise. Something else to remember – not all tax professionals have the standing to represent taxpayers before the IRS, like in the event of an audit. Check out credentials, qualifications, and services before selecting someone to do your taxes.
The IRS provides a searchable feature on its website to help you find a tax professional in your area.
If you are preparing your own return and earned less than $62,000, the IRS offers Free File software. If you make above $62,000, you can use Free File fillable forms. The forms will do the math for you, but the IRS says you need to pretty much know how to fill out a tax form, since the program provides only basic assistance.
However you plan to do your taxes, the IRS says filing electronically and having your refund direct-deposited will make the process go much faster than filing a paper form and requesting a check.
When you're ready to fill your federal income tax return for 2015, you have plenty of options – some of them you pay for, but some are free.
The Internal Revenue Service (IRS) encourages electronic filing and offers several resources to help.
You may be eligible for free help preparing your tax return from Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs listed here.
The VITA program offers free tax help to people who meet income req...
H&R Block has agreed to settle the latest in a series of lawsuits filed against it for its practice of "refund anticipation loans," or "payday loans."
The settlement was announced Dec. 21st, with a West Virginia Circuit Court judge scheduled to consider the agreement on Dec. 23rd.
The terms of the settlement would resolve claims in 22 states and the District of Columbia, as well as four class-action lawsuits in West Virginia, Ohio, Maryland, and Alabama.
Under the settl...
This time of year charitable groups step up their appeals for donations, including the donation of vehicles, such as cars, trucks and boats.
Donating a vehicle may seem appealing for a couple of reasons. First, you support a worthy cause without actually writing a check. Second, it solves the headache of what to do with an older vehicle that you think may be hard to sell. You rationalize the donation with the thought of a nice tax deduction that will bring you money on t...
Just in time for tax season, the U.S. Department of the Treasury is launching a pilot program to offer taxpayers a safe, convenient and low-cost financial account for the electronic delivery of their federal tax refunds.
The new account card option provides everyday money-saving conveniences and consumer protection features for taxpayers with limited or no access to traditional banking services.
“This pilot program will provide low- and moderate-income American...
Liberty Tax Service — the nation's third largest tax preparer — has been barred from deceptive advertising that "blurs the line" between tax refunds that are free and high-cost loans. The order stems from a suit filed by the state of California.
"Liberty Tax Service lured cash-strapped Californians into paying for high-cost loans, when they could obtain tax refunds free from the IRS just weeks later," said California Attorney General Edmund G. Brown Jr., who w...
If you were one of the fortunate investors who made a killing on Bitcoin in 2017, or maybe just earned a few bucks on a digital currency transaction, the Internal Revenue Service (IRS) is reminding you to report it on your tax return.
The tax agency says a profit from a cryptocurrency transaction is no different than a capital gain on a stock or real estate transaction. Using a virtual currency to pay for goods and services can also have tax consequences, the IRS says.
Th...
The Internal Revenue Service (IRS) allows you to deduct mileage on your personal vehicle under certain circumstances. But you need to know what those circumstances are, and keep careful records.
For example, the IRS allows business owners using their vehicle for company business to deduct 50 cents per mile driven on their 2010 tax return. The rate also has been set for 2011 at 51 cents per mile.
You can also deduct what are called “medical miles.” These are tri...
Many consumers rely on income tax refunds each year to get caught up on expenses, but with the government still shut down and IRS employees idled, it may be a while before those refunds are distributed.
That could result in more taxpayers taking out expensive advance loans from their tax preparers. Nearly every national tax preparation company offers these loans, which are highly profitable.
For the lender, there is no chance the loan will not be repaid. A consumer filing...
Congress has finally approved a sweeping tax bill that will change what millions of consumers pay in federal income taxes and how they pay it.
The Senate passed it Tuesday night after stripping out three minor provisions that violated Senate rules, which required the House to re-vote on the legislation today. The bill next heads to the White House where President Trump is expected to quickly sign it, making it effective for the 2018 tax year.
Here are some of the changes ...
Taxpayers in Florida who were hit by Hurricane Irma have more time to file certain individual and business tax returns and make certain tax payments.
The Internal Revenue Service (IRS) says this includes an additional filing extension for taxpayers with valid extensions that run out on Oct. 16, as well as businesses with extensions that ran out on Sept. 15.
Any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for either individual assistance...
While the deadline for filing your 2016 federal income return is still several months off, there are some things you should be doing now in preparation.
The Internal Revenue Service (IRS) notes that for most of us, December 31 is the last day to take actions that will affect our tax returns.
Many years ago, my accountant looked at me sadly as he finished my tax return. "You are really getting hit this year," he said. "You need some dependents. My daughter is a lovely girl with three beautiful children. That's four deductions right there."
"What are you suggesting?" I asked. "I've never even met your daughter."
"You don't have to," he said. "It would just be for tax purposes."
He wound up in prison and all of his former clients, including me, were ruthlessly au...
The crush of last-minute tax filers crashed an Internal Revenue Service (IRS) computer network, so the tax agency is extending the tax deadline through today.
“Individuals and businesses with a filing or payment due date of April 17 will now have until midnight on Wednesday, April 18,” the IRS said in a statement. “Taxpayers do not need to do anything to receive this extra time.”
According to the announcement, the IRS encountered system issues Tuesday morning. Taxpayers w...