In the past few years, the IRS has seen a considerable rise in identity theft and refund fraud, as scammers attempt to get your personal information in a fraudulent email, where they claim to be someone from the IRS or the makers of TurboTax Software. In the email, they claim that they need a greater amount of personal information, which according to the Better Business Bureau is a red flag.
People should not answer these sorts of emails, call any phone numbers listed or click on any links provided in the letter. The email can lead you to a fake website that can harm your computer. Taxpayers who are involved in tax scams such as these are liable for any tax due as well as statutory interest.
Here are the “Dirty Dozen” tax scams that people should be careful to avoid:
1. Identity theft and phishing 2. Hidden offshore income 3. Return preparer fraud 4. Filing false or misleading forms 5. Frivolous arguments 6. False nontaxable social security benefits reports 7. Abuse of charitable deductions 8. Abuse of retirement plans 9. Disguised corporate ownership 10. Filing a false wage amount 11. Misuse of trusts 12. Fuel tax credit fraud
You should remember that if something sounds too good to be true it might just be a fraud. If you know of a tax scam you should report it to the IRS. You can report suspected tax fraud by filling out Form 3949-A, mailing the IRS a letter or calling 1-800-829-3676. As a whistleblower, you may be eligible for a reward.
When you are ready to start working on your 2011 taxes, you will find that there are many different software programs available to help. Choosing the right one can be difficult, but picking the best software for your needs will help make this dreaded chore just a little bit easier.
One of the largest and most popular products is TurboTax, which gives users the ability to import data from different financial institutions to speed tax preparation. The program works with data provided electronically by many employers, banks, and software programs like Quicken and QuickBooks to limit the amount of manual data entry you need to do in order to finish your taxes.
If you used TurboTax for last years filing, doing your 2011 taxes will get even easier. TurboTax software will automatically import data from your previous year’s return to help fill in much of the information you need for your 2011 taxes. Even if you no longer have the computer you filed on last year, TurboTax can often recover information from last year’s electronically filed and saved taxes to make filing a little easier.
Some additions to TurboTax software for 2011 taxes that make filing a little easier include bookmarks or flags which allow you to make notes in areas where you will need more information. This can help you move through information more easily, completing things as you find the information.
The other major benefit to TurboTax is that the company gives you online access to “Tax Experts” who can help answer questions via online chat or toll free numbers to help you through any tricky areas. Using TurboTax is one of the best ways to make your 2011 taxes a little less stressful.
Getting a letter from the Internal Revenue Service stating you’ve been selected for audit is a taxpayer’s worst nightmare and can create a lot of anxiety.
Sometimes these notices are simple, such as you forgot to sign a document or you made a math error. The more ominous possibilities, however, will question your income, deduction claims, and more.
The IRS definition of an audit states that is simple a review of a taxpayer’s return used to verify the tax amount paid and reported is correct. If you happen to be selected for an audit, the IRS website has videos and guides to help you through the process.
In 2011 alone, nearly 1.6 million people were audited. This is slightly more than 1% of the total returns filed. Three foruths of these were completed by correspondence alone, and only one quarter required a field agent examination (in person.)
On income levels, only 1% of those with an income level of less than $200,000 were audited, while 12.5% of those who made $1 million or more were audited.
A spokesperson for the IRS, Terry Lemons, has said that the majority of taxpayers will never have to worry about an audit because their tax returns are filled out accurately.
While there is no magic equation to how the IRS selects who to audit, TurboTax can help you avoid many of the “red flags,” such as significant differences in income or deductions from those within the same demographic, in your 2012 taxes.
Chris Christie, New Jersey Governor is hitting the airwaves to sell his proposed 10 percent tax reduction for all taxpayers in New Jersey as well as for all U.S Taxpayers. Some see it as prep work before he launches his presidential bid for the 2016 elections.
Governor Christie has appeared on three radio shows and two talk shows with national coverage. The first-term governor portrayed himself as the chief architect of what he refers to as New Jersey’s comeback.
Appearing on Matt Lauer’s Today show on NBC, the host had a hard time remembering that the NJ governor was not yet running for white house.
During the show, he referred to Christie’s state of the State address as the State of the Union address, but he quickly corrected himself. While Democratic governors in New York, California and Illinois have hiked income tax rates for high-wage earners, Christie surprised America by proposing an across-the-board tax cut not only in his home state but also for the entire country.
His actions contradict those of his potential rival Andrew Cuomo, New York governor. Christie made sure he pointed out this fact in his speech.
Christie noted that the best way to compete in the current political climate was to have a different view of things.
Not only does he propose a cut in taxes, but also a cut in government spending.
Under his proposed plan, couples with taxable income of 600,000 per year would save around 4,000 dollars in 2012 taxes. A family with an income of 50,000 dollars would save around 80 dollars per year.
Welcome to the January 24, 2012 edition of Tax Carnival Ecstasy. In this edition we have DeWitt Dudley explaining how to Report Your Japanese/Foreign Inheritance. The Effective Tax Rate is Not As Simple As It Seems accoring to Patrick LaRue at 2010 Tax. Eva reports that there are Three Days Extra To File Taxes in 2012. And finally we have Robert Moore reporting that the IRS plans to Audit more taxpayers in 2011 than in previous years. Hope you enjoy the material, bookmark, share, tweet, like on Facebook and come back soon.
DeWitt Dudley presents Protecting The Owners and Stock In A Closely Held Corporationposted at Law Offices of Givner & Kaye, saying, “Operating a business in a closely held corporation can be an excellent way to protect the owner from problems with the business. If the business is adequately capitalized, then someone suing the business may not be able to “pierce the corporate veil” and get to the personal assets of the owner.”
DeWitt Dudley presents Reporting Your Japanese or Foreign Inheritance posted at Los Angeles Asset Protection, Estate Planning, Tax Planning Blog, saying, “For complex tax issues, do not settle, contact the Tax Law Experts at Givner & Kaye. We’re dedicated and aggressive. Contact us today. (310) 207-8008”
Robert Moore presents More IRS Audits Planned in 2012 posted at 2011 Taxes, saying, “Nobody likes being audited by the IRS, although the chances of being audited are now actually higher as there are more of them planned.”
Rachel C. presents 10 Hidden Ways to Save Money on Auto Insurance posted at Auto Insurance Quotes, saying, “When it comes to saving money on car insurance, there are some things that you can control and some things that you can’t. You’re probably already aware of the importance of maintaining an excellent driving record and owning a reasonable vehicle in order to get low rates. There are several other special discounts floating around out there that aren’t often advertised. Familiarize yourself with the following list of special auto insurance discounts and mention them to your insurance company to see if you qualify.”
That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Rich Santorum won the Iowa caucuses and has positioned himself as a front-runner. One candidate surges ahead and then dramatically drops down in the polls. The American voter appears uncertain when it comes to choosing a candidate for the GOP nomination. The Santorum 2012 taxes and overall tax plan require closer attention. The United States deficit and rising unemployment continue to be the hot topics in this race.
The Santorum tax plan it is estimated would cut taxes by one-trillion by 2015. A higher the deficit the will lower the value of the American dollar. He promises to cut taxes for individuals making forty-thousand or more a year. His plan would increase the overall spending power of the average American, by increasing their incomes by lowering their tax rates. His plan would create two tax brackets of ten percent and twenty percent. He would lower capital gains taxes to twelve percent from fifteen percent and increase the child exemption for individuals threefold. The biggest tax breaks would go to corporations that would pay around seventeen and a half percent, which is half of what they currently pay. Companies based in the United State would not be required to pay any taxes. This tax measure allegedly would encourage companies to invest in home based industries.
Santorum’s tax plan is designed to increase the nation’s economic growth, but it is based on systems that have not reduced the deficit or increased employment. Giving Companies substantial tax cuts and incentives has not reduced the deficit, or created more jobs. The nation deserves a better tax plan.