Income Tax

Tax Season Tips: Avoiding Audits And ID Theft

For any number of reasons, tax season is stressful. Sure, everyone loves getting their return (if you don’t believe that, check the sales of Big Screen TVs and other luxuries in late April) but at what price? Outside of the sometimes exorbitant fees charged by tax preparers, modern citizens also have to contend with the “paper file versus efile taxes” debate and be concerned with identity theft.

What do you mean identity theft?

Oh, you hadn’t heard? Tax season is like Christmas for frauds and thieves. Late filers often find their returns rejected because an identity thief has already submitted a big, fat phony return using their name. And while IRS resolution centers work very hard to try to catch fraudulent tax returns and identity thieves, there are simply too many out there. That’s why each year, 50 year old grandmothers and 19 year old food service employees alike are at risk. Each year, the IRS releases a “Dirty Dozen” list to help you stay alert.

There is an enormous list of ways to fall victim, several of which are detailed in brief below:

Identity Theft: We’ve spoken about this already. Someone uses your personal information, such a Social Security number, to commit fraud. Commonly, they will file tax returns to claim refunds, typically under $5,000. Then your return gets rejected, and you’ve got months of headaches while it all gets sorted out.

Phishing: Computer criminals commit identity theft or financial theft after gaining personal information through the use of false e-mails or websites. A good thing to keep in mind to avoid being “phished” is to remember that the IRS never contacts taxpayers through any type of electronic communication.

Return Fraud. According to the IRS, 60% or so of taxpayers will go to professionals – H&R Block, Jackson Hewitt, or other tax preparers – to get tax help. The vast majority of them will get exactly what they’ve gone for: honest help. An unlucky few will fall victim to unscrupulous tax preparers. It is important to never sign a blank return, and to choose carefully when deciding on a tax professional. Even if you’ve gotten someone else to do your taxes for you, you and you alone are liable for the information put down on the return.

Falsifying Returns. Sometimes it is tempting to commit a low level sort of fraud yourself. Claiming exorbitant expenses to which you are not entitled, or taking advantage of the Fuel Tax Credit, for instance. In these cases, you yourself are the criminal, and the IRS can and will prosecute. Don’t allow false information on your returns.

How You Can Protect Yourself:

Contact the IRS if your wallet is stolen, if your information may be stolen, or if you have questionable credit activity.

Never, ever sign a blank return.

Don’t file your taxes over public Wi-Fi hotspots.

Use a reputable tax preparer or a reputable software

Don’t leave important documents lying out, or in your vehicle, or anywhere thieves can get to them easily.

It’s important to keep these things in mind whether you’re planning to efile taxes or paper file.

Featured images:

Tony has been a tax professional for several years and likes to share some tips when it comes to protecting yourself.

Share

Be the first to comment - What do you think?
Posted by Taxmaster - May 7, 2013 at 4:45 am

Categories: Federal Tax, Income Tax, State Tax, Tax Law   Tags: , , , ,

Minnesota taxpayers will get more federal tax deductions because of new measure

There’s good financial news for Minnesota taxpayers, concerning their federal tax. The Legislature sent Governor Mark Dayton a bill that’s going to allow about 250,000 Minnesota taxpayers to claim brand new federal tax deductions. These tax deductions will be coming out of their state releases

These federal tax deductions were finalized on Monday when the House of Representatives gave the legislation its final approval. The process was a little difficult and the approval of the new measure sat in the House for a little while. This was due to some Republicans that objected to several of the changes that were made by the Senate from an earlier version of the House bill.

There will be plenty of people that will be eligible to benefits from the new bill that has been passed. Some of those that are eligible for the deductions are teachers who will be able to claim education expenses, homeowners that can take itemized deductions for their mortgage insurance premiums, and also college students that use higher education tuition deductions. Parents can also use the higher education tuition deductions.

Governor Mark Dayton had mentioned that he would gladly sign the bill. Minnesota taxpayers will be happy to know about these federal tax deductions, and should look to see if they are eligible to take advantage of them. Be sure to check if you’re one of the 250,000 or so Minnesota taxpayers that are eligible.

Share

Be the first to comment - What do you think?
Posted by Taxmaster - May 5, 2013 at 7:54 pm

Categories: Federal Tax, Income Tax, State Tax   Tags: , , , , , ,

Shameful Government Spending Cuts

Save Money Anywhere Else Please Tories

I read with real disgust the news that the Conservatives are considering removing the heating allowance for pensioners that have a bit of cash. I think the number they are talking about is income of 50k per annum.

Come on Tories.

These old folks have done their bit for society and it is about time we did ours for them. If they have an income of 50k plus they have probably been paying into a pension for 50 years, probably have been hit by annuity rates, probably paid millions in taxes over their working life, and are probably still struggling to get a lifestyle they actually deserve.

Retirement is not cheap. More free time means more money spent. Grand kids, helping out children and trying to get away for a break don’t come cheap either. Let’s not punish them for working hard all their lives. Let’s recognise them by keeping their heating allowance in place.

What is the Heating Allowance?

Here is a summary of what the heating allowance is:

The heating allowance is available to anyone who was born on or before 5 July 1951 and is normally resident in the UK during the qualifying week, which for this year was 17-23 September 2012. There are a few exceptions though; you’re not eligible if during the qualifying week you:

  • Were in prison
  • Were in hospital getting free treatment that lasted 52 weeks or more
  • Needed permission to enter the UK and didn’t qualify for assistance from the Department of Work and Pensions
  • Spent the last 12 weeks or more in a care home and claimed Pension Credit, Jobseeker’s Allowance or Employment and Support Allowance

For more information on eligibility see the Winter Fuel Payment website.

If you get the State Pension or another social security benefit (this doesn’t include Housing Benefit, Child Benefit or Council Tax Benefit) your heating allowance should be paid automatically; payments are usually made in November or December and you should get it before Christmas. Otherwise you’ll have to make a claim. You can download a claim form from this link.

Ex-Pats Can Claim Too

If you live outside the UK but somewhere else in the European Economic Area or in Switzerland you may still be able to claim, as long as you can show a genuine link with the UK, such as holding UK citizenship. If you want to claim this you need to use a different form, which can be found here.

The amount you will be paid depends on a number of things, such whether you live alone or with someone else who qualifies for the payment and if you or someone you live with is aged 80 or older. More details are available here.

As well as the heating allowance you might be able to get cold weather payments if the temperature in your area is below 0°C for a week or more. To find out if you’re eligible for this please see this page.

I know we need to save money and reduce the National Debt. But I don’t think this is a good idea. What do you think? Sensible cost saving measure or slap in the face for our most deserving pensioners?

Phil Turner thinks that everyone needs to find out about the winter heating allowance. Information is important because it then allows you to lobby your MP and to talk with authority.

Share

Be the first to comment - What do you think?
Posted by Taxmaster - May 3, 2013 at 5:23 pm

Categories: Federal Tax, Income Tax, Tax Law   Tags: , , ,

« Previous PageNext Page »

 Baker Mayfield Authentic Jersey