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tax preparers

Tax Time is Over. Maybe.

For most folks tomorrow marks the one week anniversary of filing their 2014 tax return. Not much needs to be done after they’ve filed except for deciding to have more withheld in 2014 for those folks who had to write a check to Uncle Sam or deciding what to do with the refund (hint: put it in an IRA) for those folks who got a refund. What happens when the return may have been submitted with mistakes or perhaps costly errors? Generally, if the error is minor the IRS will correct errors or accept returns without certain forms or schedules attached. For those returns that have a change in filing status, income, deductions, and credits then filing an amended return will most likely be appropriate. For those folks needing to file an amended return they are allowed to file using form 1040X. Form 1040X will allowing corrections to earlier filed […]

Looking for free tax preparation? IRS provides some tips

For lots of people, the option of free tax preparation is an excellent way to go.  There are quite a few providers who will allow you to prepare a simple return for free (more complexity equals more cost, of course).  It’s a good idea to go through the process if you have the aptitude, because it’s helpful to understand the ins and outs of a tax return.  Knowing about how your tax return works can help you to have a better understanding of ways to reduce your taxes in the future. When using a commercial organization to prepare your return for free, beware of the “add-ons” that make a free process extremely costly.  Among these are – add-on state filing (sometimes more costly than federal preparation!), refund anticipation loans (like a payday loan, only more expensive!), and payment via your refund (another type of refund anticipation loan, with the associated […]

Watch out for scams at tax time

You’ve probably seen news reports about how identity theft is rampant around the time tax returns are being filed.  All sorts of nefarious schemes are out there, via the phone or email. The IRS recently published their Special Edition Tax Tip 2014-02, which details the warnings from the IRS about scams.  The full text of the Tip is below. IRS Warns of Tax-time Scams It’s true: tax scams proliferate during the income tax filing season.  This year’s season opens on Jan. 31.  The IRS provides the following scam warnings so you can protect yourself and avoid becoming a victim of these crimes: Be vigilant of any unexpected communication purportedly from the IRS at the start of tax season. Don’t fall for phone and phishing email scams tha use the IRS as a lure.  Thieves often pose as the IRS using a bogus refund scheme or warnings to pay past-due taxes. […]

Charitable Donations

This time of year many people find it in their hearts to give. They’ll give to friends, family, loved ones and charitable organizations that can help maximize the gift such as a church, charity, or foundation. Last week I had written about the law of reciprocity and giving, and this week I’d like to mention how you can make your giving work in favor when tax season rolls around. As of this writing there are about 11 days left in 2013. Some individuals will be looking to see how much they can give or how much more they can give in order to receive the biggest tax deduction they can for charitable giving. Of course, gifts to friends and family are not deductible, but there are times when gifts or donations are completely deductible and may be to the tax advantage of the person giving or donating the gift. According to […]

The IRS Released Their “Dirty Dozen” Tax Scams for 2013

Every year the IRS releases a list of what they refer to as the “Dirty Dozen” tax scams – which are particularly timely to review during tax filing season.  Don’t expect this to be as much fun as watching the original 1967 movie – c’mon, this is the IRS, not Lee Marvin!  However, it’s important to know about these scams because, as the taxpayer, it is you who is ultimately responsible for the information on your tax return – even if you were duped into believing a particular “scam” was legit. Recently this list was released for 2013, in the IRS’ Special Edition Tax Tip 2013-08.  The actual text of 2013-08 follows: Protect Yourself from the Dirty Dozen Tax Scams The IRS’s annual ‘Dirty Dozen’ list includes common tax scams that often peak during the tax filing season.  The IRS recommends that taxpayers be aware so they can protect themselves […]

Knowing which tax form to file

When filing your own tax returns, it can be confusing to figure our which form you should use.  If you are using tax preparation software, most often this choice is made for you, but if you’re doing it the old-fashioned way, you need to know which form to file. The IRS recently issued Tax Tip 2013-04, which helps you to choose the correct form to file.  The actual text of the Tip follows (I’ve cleaned up a few formatting issues): Choosing Which Form to File IRS e-file makes it easy for taxpayers to choose which tax form to file.  Tax software automatically chooses the best form for your particular situation.  Most people e-file these days, but if you prefer taking pen to paper, the IRS has some tips to help you choose the right form. Taxpayers who choose to file a paper tax return should know that the IRS no […]

Free Income Tax Filing Options

Did you know that you can file your taxes online for free? There are options available for you to file your income tax return for nothing – nada.  There are also options available to get free assistance and use tax preparation software for free, as long as your income is within the limits. As you research a way to prepare your taxes using one of the no-cost or low-cost methods, keep your guard up.  Beware of Refund Anticipation Loans – the loan that the tax prep company offers you in order to receive your refund (actually only a portion of it).  These loans are tempting, especially if you need the money right away, but the problem is that these loans are nothing more than well-disguised payday loans. Hopefully you realize that this type of loan is extremely costly in terms of interest rate being charged – effective rates can be […]

Choosing a Tax Preparer

It’s that time of year again – time to do your income taxes.  While lots of folks will opt for the “box”, using one of the many do-it-yourself options like TurboTax, Tax Cut and others, many folks will choose to go to a professional tax preparer to have their returns prepared. There are several types of professionals who are qualified to prepare your tax return: Certified Public Accountants (CPAs), attorneys, Enrolled Agents (EAs), and unenrolled tax preparers.  You’re likely familiar with CPAs and attorneys, so I won’t go into explaining them.  Enrolled Agents (EAs) are enrolled with the IRS and empowered to represent taxpayers before the IRS.  This type of professional must pass a rigorous series of exams to be enrolled, and then must complete 72 hours of continuing education every three years to remain enrolled. CPAs, attorneys and EAs (as well as Enrolled Actuaries) are among a group known […]

The Dirty Dozen Tax Scams for 2012

taxes (Photo credit: 401K) Every year around this time, the IRS issues its list of the top tax scams they’ve seen, as a reminder to taxpayers to use caution during tax season to protect themselves against schemes from identity theft to return preparer fraud. Following is the list of the Dirty Dozen Tax Scams for 2012, taken from IRS publication IR-2012-23: Identity Theft Topping this year’s Dirty Dozen list is identity theft.  In response to growing identity theft concerns, the IRS has embarked on a comprehensive strategy that is focused on preventing, detecting and resolving identity theft cases as soon as possible.  In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued as well as working to help victims of the identity theft refund schemes. Identity theft cases are among the most complex ones the IRS […]