from www.irs.gov
IRS Announces 2008 Standard Mileage Rates; Rate for Business Miles Set at 50.5 Cents per Mile
IR-2007-192, Nov. 27, 2007
WASHINGTON — The Internal Revenue Service today issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
50.5 cents per mile for business miles driven;
19 cents per mile driven for medical or moving purposes; and
14 cents per mile driven in service of charitable organizations.
The new rate for business miles compares to a rate of 48.5 cents per mile for 2007. The new rate for medical and moving purposes compares to 20 cents in 2007. The rate for miles driven in service of charitable organizations has remained the same.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile; the standard rate for medical and moving purposes is based on the variable costs as determined by the same study. Runzheimer International, an independent contractor, conducted the study for the IRS.
The mileage rate for charitable miles is set by law.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), after claiming a Section 179 deduction for that vehicle, for any vehicle used for hire or for more than four vehicles used simultaneously.
Revenue Procedure 2007-70 contains additional information on these standard mileage rates.
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Tuesday, November 27, 2007
Saturday, November 24, 2007
Why your IRS tax refund will be late
from www.suntimes.com
Why your IRS tax refund will be late
November 22, 2007
ROBERT NOVAK novakevans@aol.com
Habitual congressional gridlock usually has no impact on the lives of ordinary Americans. But what happened on the Senate floor last Friday just before lawmakers recessed for their Thanksgiving break will delay tax refunds next year for 50 million taxpayers who count on them.
The underlying reason is a 38-year-old congressional tax blunder that never has been corrected. In 1969, Congress passed the alternative minimum tax to collect from 155 tax-avoiding millionaires. But because the scheme was not indexed for inflation, this year alone it would hit 23 million extra people with taxes higher than intended. AMT will be ''patched'' to provide relief as it is in every Congress, but not in time this year. Refunds totaling more than $75 billion will arrive many weeks late not only for taxpayers in the $100,000-to-$200,000 bracket who are unintentionally affected by AMT, but also lower-income persons because the IRS refund procedure will be disrupted by the delay.
Senate Majority Leader Harry Reid's 11th-hour effort Friday collapsed when he refused to open the proceedings to votes on Republican tax-cutting proposals. At the heart of this deadlock is a debate between Democrats and Republicans over whether the level of federal taxation should be controlled. For once, the debate comes home to ordinary taxpayers in delayed refund checks.
The AMT problem did not take Congress by surprise. The administration for months had been calling for another AMT ''patch'' to keep the monster that Congress built from devouring more taxpayers. But Democratic Rep. Charles Rangel, chairman of the tax-writing House Ways and Means Committee, said he instead would attempt ''the mother of all tax reforms'': total repeal of AMT, with lost revenue paid for by massive taxing of the rich -- a trillion-dollar redistribution of wealth over the next decade.
Rangel's ''mother'' was going nowhere, so Congress last month belatedly turned to passing a patch. The Blue Dogs, self-styled Democratic fiscal conservatives, insisted on offsets -- $26 billion in tax increases -- to cover lost AMT revenue. Rangel's new bill (called ''little mother'' by Republicans) hit unpopular targets: private equity accounts, hedge funds and investment partnerships. It passed the House Nov. 9 on a party-line vote.
Everybody knew ''little mother'' was pure posturing. There was no chance for the necessary 60-vote super Senate majority. Indeed, Senate Democratic leaders did not want a tax increase offset for the patch. The bill's final version that would reach President Bush's desk would contain no tax increase. Majority Leader Reid said he would not pass a bill until December, when Congress returned from its Thanksgiving break.
But the Internal Revenue Service announced it would take 10 weeks to readjust its computers to account for the patched AMT, affecting its entire refund system. One $90,000-a-year Senate staffer complained he would not be getting his tax refunds, and the word spread among his colleagues (an unregistered, potent lobbyist bloc). Republican lawmakers pounded on the Democrats for inflicting pain on ordinary taxpayers. Prominent Democratic senators urged Reid to get something done. Consequently, Reid made a surprise announcement that the Senate would take up the AMT patch last Friday instead of waiting for December. All signs indicated that Reid was serious about taking action.
Grave philosophical differences between Republicans and Democrats prevented passage. Senate Minority Leader Mitch McConnell proposed permitting Republicans to offer four floor amendments to the bill. Reid did not want to subject his Democrats to voting against tax cuts, including repeal of the estate tax. So the two party leaders mutually refused to grant the unanimous consent needed for the Senate to take up the bill, and the senators left Washington with another piece of work undone.
AMT surely will be patched in December, too late for timely tax refunds.
Why your IRS tax refund will be late
November 22, 2007
ROBERT NOVAK novakevans@aol.com
Habitual congressional gridlock usually has no impact on the lives of ordinary Americans. But what happened on the Senate floor last Friday just before lawmakers recessed for their Thanksgiving break will delay tax refunds next year for 50 million taxpayers who count on them.
The underlying reason is a 38-year-old congressional tax blunder that never has been corrected. In 1969, Congress passed the alternative minimum tax to collect from 155 tax-avoiding millionaires. But because the scheme was not indexed for inflation, this year alone it would hit 23 million extra people with taxes higher than intended. AMT will be ''patched'' to provide relief as it is in every Congress, but not in time this year. Refunds totaling more than $75 billion will arrive many weeks late not only for taxpayers in the $100,000-to-$200,000 bracket who are unintentionally affected by AMT, but also lower-income persons because the IRS refund procedure will be disrupted by the delay.
Senate Majority Leader Harry Reid's 11th-hour effort Friday collapsed when he refused to open the proceedings to votes on Republican tax-cutting proposals. At the heart of this deadlock is a debate between Democrats and Republicans over whether the level of federal taxation should be controlled. For once, the debate comes home to ordinary taxpayers in delayed refund checks.
The AMT problem did not take Congress by surprise. The administration for months had been calling for another AMT ''patch'' to keep the monster that Congress built from devouring more taxpayers. But Democratic Rep. Charles Rangel, chairman of the tax-writing House Ways and Means Committee, said he instead would attempt ''the mother of all tax reforms'': total repeal of AMT, with lost revenue paid for by massive taxing of the rich -- a trillion-dollar redistribution of wealth over the next decade.
Rangel's ''mother'' was going nowhere, so Congress last month belatedly turned to passing a patch. The Blue Dogs, self-styled Democratic fiscal conservatives, insisted on offsets -- $26 billion in tax increases -- to cover lost AMT revenue. Rangel's new bill (called ''little mother'' by Republicans) hit unpopular targets: private equity accounts, hedge funds and investment partnerships. It passed the House Nov. 9 on a party-line vote.
Everybody knew ''little mother'' was pure posturing. There was no chance for the necessary 60-vote super Senate majority. Indeed, Senate Democratic leaders did not want a tax increase offset for the patch. The bill's final version that would reach President Bush's desk would contain no tax increase. Majority Leader Reid said he would not pass a bill until December, when Congress returned from its Thanksgiving break.
But the Internal Revenue Service announced it would take 10 weeks to readjust its computers to account for the patched AMT, affecting its entire refund system. One $90,000-a-year Senate staffer complained he would not be getting his tax refunds, and the word spread among his colleagues (an unregistered, potent lobbyist bloc). Republican lawmakers pounded on the Democrats for inflicting pain on ordinary taxpayers. Prominent Democratic senators urged Reid to get something done. Consequently, Reid made a surprise announcement that the Senate would take up the AMT patch last Friday instead of waiting for December. All signs indicated that Reid was serious about taking action.
Grave philosophical differences between Republicans and Democrats prevented passage. Senate Minority Leader Mitch McConnell proposed permitting Republicans to offer four floor amendments to the bill. Reid did not want to subject his Democrats to voting against tax cuts, including repeal of the estate tax. So the two party leaders mutually refused to grant the unanimous consent needed for the Senate to take up the bill, and the senators left Washington with another piece of work undone.
AMT surely will be patched in December, too late for timely tax refunds.
Chances of Being Audited By the IRS
from www.banks.com
Chances of Being Audited By the IRS
By Chris Bibey November 20th, 2007
Every year, tax filers worry that the IRS is going to single them out for an audit. Are you stressing out over nothing? The fact of the matter is that only a very small percentage of individual tax returns are audited. Generally speaking, the selection process for audits is generated by a computer based model that looks at a set of norms or standards.
When the figures on your tax return differ greatly from the standards that the computer is using, your chances of being audited increase greatly. This is why it is very important to ensure that your numbers are correct no matter what.
Tax returns are grouped together by the IRS, and from there, those that will be audited are chosen. Of course, the IRS does not release information on the specifications and details that they use to break down these groupings. If they did, there would surely be a lot of people trying to “game” the system.
If you report a large amount of deductions or an abnormally low income, there is a good chance that you are going to set off a red flag. In turn, the IRS may contact you looking for an explanation.
Being audited is never fun. But with that being said, just because you are audited does not mean that you are going to get in trouble. Once again, if you are honest and do everything right the first time around, there is nothing to worry about even if the IRS does get in touch.
The IRS estimates that hundreds of billions of dollars have been lost by those who cheat on their taxes. For this reason, Congress has given the IRS a bigger budget for conducting audits.
Posted in Tax Audits, IRS No Comments »
Chances of Being Audited By the IRS
By Chris Bibey November 20th, 2007
Every year, tax filers worry that the IRS is going to single them out for an audit. Are you stressing out over nothing? The fact of the matter is that only a very small percentage of individual tax returns are audited. Generally speaking, the selection process for audits is generated by a computer based model that looks at a set of norms or standards.
When the figures on your tax return differ greatly from the standards that the computer is using, your chances of being audited increase greatly. This is why it is very important to ensure that your numbers are correct no matter what.
Tax returns are grouped together by the IRS, and from there, those that will be audited are chosen. Of course, the IRS does not release information on the specifications and details that they use to break down these groupings. If they did, there would surely be a lot of people trying to “game” the system.
If you report a large amount of deductions or an abnormally low income, there is a good chance that you are going to set off a red flag. In turn, the IRS may contact you looking for an explanation.
Being audited is never fun. But with that being said, just because you are audited does not mean that you are going to get in trouble. Once again, if you are honest and do everything right the first time around, there is nothing to worry about even if the IRS does get in touch.
The IRS estimates that hundreds of billions of dollars have been lost by those who cheat on their taxes. For this reason, Congress has given the IRS a bigger budget for conducting audits.
Posted in Tax Audits, IRS No Comments »
IRS Has $110 Million in Refund Checks Looking for a Home
from www.irs.gov
IR-2007-189, Nov. 14, 2007
WASHINGTON — The Internal Revenue Service is looking for 115,478 taxpayers who are due refund checks worth about $110 million after the checks were returned as undeliverable.
The refund checks, averaging about $953, can be claimed as soon as taxpayers update their addresses with the IRS. Some taxpayers have more than one check waiting.
“Taxpayers should not miss out on getting their money back,” said Richard Morgante, commissioner of the IRS Wage and Investment Division. ”The IRS makes it as easy as possible for taxpayers to update their addresses and claim their refunds.”
The “ Where’s My Refund?” tool on IRS.gov enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2006 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems.
Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.
Most Refunds
The number of undeliverable refunds each year is a relatively small portion of all refunds returned to taxpayers. So far in 2007, the IRS has processed nearly 105 million refunds, totaling about $240 billion, either by mail or direct deposit.
In fact, undeliverable refunds account for less than one-tenth of one percent of all refunds, or about one in a thousand.
A refund check is normally returned as undeliverable when a taxpayer moves without updating his or her address with either the U.S. Postal Service or the IRS.
Telephone Tax Refund
The list of taxpayers due undeliverable refunds this year rose about 21 percent from 95,746 last year. The sharp increase is due in part to the Telephone Excise Tax Refund. The refund is a one-time payment available on 2006 federal income tax returns. It was designed to return to taxpayers previously collected long-distance telephone taxes. Individuals, businesses and tax-exempt organizations are eligible to request it.
Updating Your Address
Refund checks are mailed to a taxpayer’s last known address. Checks are returned to the IRS if a taxpayer moves without notifying the IRS or the U.S. Postal Service.Taxpayers can update their addresses with the IRS on the “ Where’s My Refund?” feature. Also, taxpayers checking on a refund will be prompted to provide an updated address if there is an undelivered check outstanding within the last 12 months. Taxpayers checking on a refund over the phone will be given instructions on how to update their addresses.
A taxpayer can also ensure the IRS has his or her correct address by filing Form 8822, Change of Address. Download the form or request it by calling 1-800-TAX-FORM (1-800-829-3676).
Those who do not have access to the Internet and think they may be missing a refund should first check their records or contact their tax preparer, then call the IRS toll-free assistance line at 1-800-829-1040 to update their address.
Direct Deposit Can Stop Lost Refunds
Signing up for Direct Deposit can put an end to undelivered refunds, as well lost or stolen refund checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct Deposit is available for filers of both paper and electronic returns. Taxpayers can sign up for direct deposit on their tax form.
Links:
IR-2007-189, Nov. 14, 2007
WASHINGTON — The Internal Revenue Service is looking for 115,478 taxpayers who are due refund checks worth about $110 million after the checks were returned as undeliverable.
The refund checks, averaging about $953, can be claimed as soon as taxpayers update their addresses with the IRS. Some taxpayers have more than one check waiting.
“Taxpayers should not miss out on getting their money back,” said Richard Morgante, commissioner of the IRS Wage and Investment Division. ”The IRS makes it as easy as possible for taxpayers to update their addresses and claim their refunds.”
The “ Where’s My Refund?” tool on IRS.gov enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2006 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems.
Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.
Most Refunds
The number of undeliverable refunds each year is a relatively small portion of all refunds returned to taxpayers. So far in 2007, the IRS has processed nearly 105 million refunds, totaling about $240 billion, either by mail or direct deposit.
In fact, undeliverable refunds account for less than one-tenth of one percent of all refunds, or about one in a thousand.
A refund check is normally returned as undeliverable when a taxpayer moves without updating his or her address with either the U.S. Postal Service or the IRS.
Telephone Tax Refund
The list of taxpayers due undeliverable refunds this year rose about 21 percent from 95,746 last year. The sharp increase is due in part to the Telephone Excise Tax Refund. The refund is a one-time payment available on 2006 federal income tax returns. It was designed to return to taxpayers previously collected long-distance telephone taxes. Individuals, businesses and tax-exempt organizations are eligible to request it.
Updating Your Address
Refund checks are mailed to a taxpayer’s last known address. Checks are returned to the IRS if a taxpayer moves without notifying the IRS or the U.S. Postal Service.Taxpayers can update their addresses with the IRS on the “ Where’s My Refund?” feature. Also, taxpayers checking on a refund will be prompted to provide an updated address if there is an undelivered check outstanding within the last 12 months. Taxpayers checking on a refund over the phone will be given instructions on how to update their addresses.
A taxpayer can also ensure the IRS has his or her correct address by filing Form 8822, Change of Address. Download the form or request it by calling 1-800-TAX-FORM (1-800-829-3676).
Those who do not have access to the Internet and think they may be missing a refund should first check their records or contact their tax preparer, then call the IRS toll-free assistance line at 1-800-829-1040 to update their address.
Direct Deposit Can Stop Lost Refunds
Signing up for Direct Deposit can put an end to undelivered refunds, as well lost or stolen refund checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct Deposit is available for filers of both paper and electronic returns. Taxpayers can sign up for direct deposit on their tax form.
Links:
Tuesday, November 13, 2007
Saver's Credit: Tax Break Helps Low and Moderate Income Workers
from www.irs.gov
Plan Now to Get Full Benefit of Saver’s Credit; Tax Break Helps Low- and Moderate-Income Workers Save for Retirement
IR-2007-187, Nov. 9, 2007
WASHINGTON — Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2007 and the years ahead, according to the Internal Revenue Service.
The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Formally known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.
“We want low- and moderate-income workers to know about this valuable credit so they can effectively plan ahead and take full advantage of it,” said Richard J. Morgante, commissioner of the Wage and Investment Division of the IRS. “Now that a growing number of employers are automatically enrolling their employees in 401(k) plans, the saver’s credit offers many workers who save for retirement an added bonus.”
Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2007 tax return. People have until April 15, 2008, to set up a new individual retirement arrangement or add money to an existing IRA and still get credit for 2007. However, elective deferrals must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2008 contributions soon so their employer can begin withholding them in January.
The saver’s credit can be claimed by:
Married couples filing jointly with incomes up to $52,000 in 2007 or $53,000 in 2008;
Heads of Household with incomes up to $39,000 in 2007 or $39,750 in 2008; and
Married individuals filing separately and singles with incomes up to $26,000 in 2007 or $26,500 in 2008.
Like other tax credits, the saver’s credit can increase a taxpayer’s refund or reduce the tax owed. Though the maximum saver’s credit is $1,000, $2,000 for married couples, the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers.
A taxpayer’s credit amount is based on his or her filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs. Form 8880 is used to claim the saver’s credit, and its instructions have details on figuring the credit correctly.
In 2005, the most recent year for which complete figures are available, saver’s credits totaling more than $900 million were claimed on nearly 5.3 million individual income tax returns. Saver’s credits claimed on these returns averaged $216 for joint filers, $149 for heads of household and $140 for single filers.
The saver’s credit supplements other tax benefits available to people who set money aside for retirement. For example, most workers may deduct their contributions to a traditional IRA. Though Roth IRA contributions are not deductible, qualifying withdrawals, usually after retirement, are tax-free. Normally, contributions to 401(k) and similar workplace plans are not taxed until withdrawn.
Other special rules that apply to the saver’s credit include the following:
Eligible taxpayers must be at least 18 years of age.
Anyone claimed as a dependent on someone else’s return cannot take the credit.
A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.
Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2007, this rule applies to distributions received after 2004 and before the due date (including extensions) of the 2007 return. Form 8880 and its instructions have details on making this computation.
Begun in 2002 as a temporary provision, the saver’s credit was made a permanent part of the tax code in legislation enacted last year. To help preserve the value of the credit, income limits are now adjusted annually to keep pace with inflation. More information about the credit is on this Web site.
Plan Now to Get Full Benefit of Saver’s Credit; Tax Break Helps Low- and Moderate-Income Workers Save for Retirement
IR-2007-187, Nov. 9, 2007
WASHINGTON — Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2007 and the years ahead, according to the Internal Revenue Service.
The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Formally known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.
“We want low- and moderate-income workers to know about this valuable credit so they can effectively plan ahead and take full advantage of it,” said Richard J. Morgante, commissioner of the Wage and Investment Division of the IRS. “Now that a growing number of employers are automatically enrolling their employees in 401(k) plans, the saver’s credit offers many workers who save for retirement an added bonus.”
Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2007 tax return. People have until April 15, 2008, to set up a new individual retirement arrangement or add money to an existing IRA and still get credit for 2007. However, elective deferrals must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2008 contributions soon so their employer can begin withholding them in January.
The saver’s credit can be claimed by:
Married couples filing jointly with incomes up to $52,000 in 2007 or $53,000 in 2008;
Heads of Household with incomes up to $39,000 in 2007 or $39,750 in 2008; and
Married individuals filing separately and singles with incomes up to $26,000 in 2007 or $26,500 in 2008.
Like other tax credits, the saver’s credit can increase a taxpayer’s refund or reduce the tax owed. Though the maximum saver’s credit is $1,000, $2,000 for married couples, the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers.
A taxpayer’s credit amount is based on his or her filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs. Form 8880 is used to claim the saver’s credit, and its instructions have details on figuring the credit correctly.
In 2005, the most recent year for which complete figures are available, saver’s credits totaling more than $900 million were claimed on nearly 5.3 million individual income tax returns. Saver’s credits claimed on these returns averaged $216 for joint filers, $149 for heads of household and $140 for single filers.
The saver’s credit supplements other tax benefits available to people who set money aside for retirement. For example, most workers may deduct their contributions to a traditional IRA. Though Roth IRA contributions are not deductible, qualifying withdrawals, usually after retirement, are tax-free. Normally, contributions to 401(k) and similar workplace plans are not taxed until withdrawn.
Other special rules that apply to the saver’s credit include the following:
Eligible taxpayers must be at least 18 years of age.
Anyone claimed as a dependent on someone else’s return cannot take the credit.
A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.
Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2007, this rule applies to distributions received after 2004 and before the due date (including extensions) of the 2007 return. Form 8880 and its instructions have details on making this computation.
Begun in 2002 as a temporary provision, the saver’s credit was made a permanent part of the tax code in legislation enacted last year. To help preserve the value of the credit, income limits are now adjusted annually to keep pace with inflation. More information about the credit is on this Web site.
Tax Mistakes to Avoid
from www.banks.com
Tax Mistakes to Avoid
By Chris Bibey November 9th, 2007
Making mistakes when filing your taxes is serious business. In other words, this is not something that you should take lightly. If you think that a mistake here and there is no big deal, you have another thing coming. Sure, you may be able to get away with errors from time to time, but you do not want to push your luck. Instead, you should make sure that everything you do is 100 percent accurate. Not only will this ensure that the IRS never comes after you, but it will make you feel better about yourself as well.
One of the biggest tax mistakes made is getting confused on what is deductible and what is not. This holds true both for individual tax filers, as well as those who are keeping business records. If you have any doubt in this area, make sure that you ask before finalizing anything. This is something that the IRS watches for, and if you are exaggerating in several areas you could get in a lot of trouble.
It may sound obvious, but not accurately reporting income is a huge problem among many tax payers. Should this be an issue? Absolutely not! But some tax payers know that they can fib about their income, and in turn pay less taxes at the end of the year; this is especially common among those who are self employed.
Finally, hoping that you can complete your tax return within a matter of minutes is just about as dumb as it gets. It is a shame to think that so many people wait until the day before they need to mail their forms to get started. If you do this, you could run into a bind that will push you behind. Of course, this can lead to issues with the IRS.
You should do whatever it takes to avoid tax related mistakes. No, dealing with tax forms and returns is not fun, but it is an important part of life.
Tax Mistakes to Avoid
By Chris Bibey November 9th, 2007
Making mistakes when filing your taxes is serious business. In other words, this is not something that you should take lightly. If you think that a mistake here and there is no big deal, you have another thing coming. Sure, you may be able to get away with errors from time to time, but you do not want to push your luck. Instead, you should make sure that everything you do is 100 percent accurate. Not only will this ensure that the IRS never comes after you, but it will make you feel better about yourself as well.
One of the biggest tax mistakes made is getting confused on what is deductible and what is not. This holds true both for individual tax filers, as well as those who are keeping business records. If you have any doubt in this area, make sure that you ask before finalizing anything. This is something that the IRS watches for, and if you are exaggerating in several areas you could get in a lot of trouble.
It may sound obvious, but not accurately reporting income is a huge problem among many tax payers. Should this be an issue? Absolutely not! But some tax payers know that they can fib about their income, and in turn pay less taxes at the end of the year; this is especially common among those who are self employed.
Finally, hoping that you can complete your tax return within a matter of minutes is just about as dumb as it gets. It is a shame to think that so many people wait until the day before they need to mail their forms to get started. If you do this, you could run into a bind that will push you behind. Of course, this can lead to issues with the IRS.
You should do whatever it takes to avoid tax related mistakes. No, dealing with tax forms and returns is not fun, but it is an important part of life.
Saturday, November 3, 2007
IRS Announces New Chinese, Russian and Vietnamese Tax Glossaries to Assist Taxpayers
from www.is.gov
IR-2007-182, Nov. 2, 2007WASHINGTON — The Internal Revenue Service today announced the availability of five new publications to help foreign-language communities understand federal tax forms and publications that are written in English. These new glossaries of tax terminology will help meet increased demand for tax-related resources in languages other than English.
The five new publications are new versions of Publication 850 for Chinese (simplified), Chinese (traditional), Korean, Russian and Vietnamese. A Spanish version was previously available.
The Virtual Translation Office of the IRS helped create these glossaries of tax terminology to help taxpayers and the professionals who assist them. The publications were developed in cooperation with professional translators and editors to establish uniformity in language usage in IRS tax products and to function as reference materials for these products.
Although the publications are not legal documents, the IRS hopes that these glossaries will be useful to members of the U.S. Chinese, Korean, Russian and Vietnamese communities in understanding IRS documents and clarifying tax-related issues.
The new publications are:
Publication 850 (EN/CN-S), English-Chinese (Simplified) Glossary of Words and Phrases
Publication 850 (EN/CN-T), English-Chinese (Traditional) Glossary of Words and Phrases
Publication 850 (EN/KR), English-Korean Glossary of Words and Phrases
Publication 850 (EN/RU), English-Russian Glossary of Words and Phrases
Publication 850 (EN/VN), English-Vietnamese Glossary of Words and Phrases
Subscribe to IRS Newswire
IR-2007-182, Nov. 2, 2007WASHINGTON — The Internal Revenue Service today announced the availability of five new publications to help foreign-language communities understand federal tax forms and publications that are written in English. These new glossaries of tax terminology will help meet increased demand for tax-related resources in languages other than English.
The five new publications are new versions of Publication 850 for Chinese (simplified), Chinese (traditional), Korean, Russian and Vietnamese. A Spanish version was previously available.
The Virtual Translation Office of the IRS helped create these glossaries of tax terminology to help taxpayers and the professionals who assist them. The publications were developed in cooperation with professional translators and editors to establish uniformity in language usage in IRS tax products and to function as reference materials for these products.
Although the publications are not legal documents, the IRS hopes that these glossaries will be useful to members of the U.S. Chinese, Korean, Russian and Vietnamese communities in understanding IRS documents and clarifying tax-related issues.
The new publications are:
Publication 850 (EN/CN-S), English-Chinese (Simplified) Glossary of Words and Phrases
Publication 850 (EN/CN-T), English-Chinese (Traditional) Glossary of Words and Phrases
Publication 850 (EN/KR), English-Korean Glossary of Words and Phrases
Publication 850 (EN/RU), English-Russian Glossary of Words and Phrases
Publication 850 (EN/VN), English-Vietnamese Glossary of Words and Phrases
Subscribe to IRS Newswire
IRS Warns of E-mail Scam Soliciting Donations to California Wildfire Victims
from www.irs.gov
IR-2007-183, Nov. 2, 2007
WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for a new e-mail scam that appears to be a solicitation from the IRS and the U.S. government for charitable contributions to victims of the recent Southern California wildfires.
In an effort to appear legitimate, the bogus e-mails include text from an actual speech about the wildfires by a member of the California Assembly.
The scam e-mail urges recipients to click on a link, which then opens what appears to be the IRS Web site but which is, in fact, a fake. An item on the phony Web site urges donations and includes a link that opens a donation form which requests the recipient’s personal and financial information.
“People should exercise caution when they receive unsolicited e-mail or e-mail from senders they don’t know,” said Richard Spires, IRS Deputy Commissioner for Operations Support. “They should avoid opening any attachments or clicking on any links until they can verify the e-mail’s legitimacy.”
The bogus e-mails appear to be a “phishing” scheme, in which recipients are tricked into providing personal and financial information that can be used to gain access to and steal the e-mail recipient’s assets.
The IRS also believes that clicking on the link downloads malware, or malicious software, onto the recipient’s computer. The malware will steal passwords and other account information it finds on the victim's computer system and send them to the scamster.
Generally, scamsters use the data they fraudulently obtain to empty the recipient’s bank accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name or even file fraudulent tax returns to obtain refunds rightfully belonging to the victim.The IRS does not send e-mails soliciting charitable donations. As a rule, the IRS does not send unsolicited e-mails or ask for personal and financial information via e-mail. The IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.Recipients of the scam e-mail who clicked on any of the links should have their computers checked for malicious software and should monitor their financial accounts for suspicious activity, taking measures to prevent unauthorized access as necessary. Any unauthorized activity should be reported to law enforcement authorities and to the three major credit companies. More information on how to handle actual or potential identity theft may be found in IRS Publication 4535, Identity Theft Protection and Victim Assistance, available on this Web site. Information is also available on the Federal Trade Commission’s identity theft Web site.
Recipients of the scam e-mail can help the IRS shut down this scheme by forwarding the e-mail to an electronic mail box, phishing@irs.gov, using instructions found in “How to Protect Yourself from Suspicious E-Mails or Phishing Schemes” on this site. This mail box was established to receive copies of possibly fraudulent e-mails involving misuse of the IRS name, logo or Web site for investigation.
The IRS and the Treasury Inspector General for Tax Administration (TIGTA) work with the U.S. Computer Emergency Readiness Team (US-CERT) and various Internet service providers and international CERT teams to have the phishing sites taken offline as soon as they are reported.
Since the establishment of the mail box last year, the IRS has received more than 30,000 e-mails from taxpayers reporting almost 600 separate phishing incidents. To date, investigations by TIGTA have identified almost 900 host sites in at least 55 different countries, as well as in the United States.
Recipients of questionable e-mails claiming to come from the IRS may also call TIGTA’s toll-free hotline at 1-800-366-4484.
The IRS has come across numerous schemes in which e-mails claim to come from the IRS. More information on these schemes may be found on this Web site by entering the term phishing in the search box.
IR-2007-183, Nov. 2, 2007
WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for a new e-mail scam that appears to be a solicitation from the IRS and the U.S. government for charitable contributions to victims of the recent Southern California wildfires.
In an effort to appear legitimate, the bogus e-mails include text from an actual speech about the wildfires by a member of the California Assembly.
The scam e-mail urges recipients to click on a link, which then opens what appears to be the IRS Web site but which is, in fact, a fake. An item on the phony Web site urges donations and includes a link that opens a donation form which requests the recipient’s personal and financial information.
“People should exercise caution when they receive unsolicited e-mail or e-mail from senders they don’t know,” said Richard Spires, IRS Deputy Commissioner for Operations Support. “They should avoid opening any attachments or clicking on any links until they can verify the e-mail’s legitimacy.”
The bogus e-mails appear to be a “phishing” scheme, in which recipients are tricked into providing personal and financial information that can be used to gain access to and steal the e-mail recipient’s assets.
The IRS also believes that clicking on the link downloads malware, or malicious software, onto the recipient’s computer. The malware will steal passwords and other account information it finds on the victim's computer system and send them to the scamster.
Generally, scamsters use the data they fraudulently obtain to empty the recipient’s bank accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name or even file fraudulent tax returns to obtain refunds rightfully belonging to the victim.The IRS does not send e-mails soliciting charitable donations. As a rule, the IRS does not send unsolicited e-mails or ask for personal and financial information via e-mail. The IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.Recipients of the scam e-mail who clicked on any of the links should have their computers checked for malicious software and should monitor their financial accounts for suspicious activity, taking measures to prevent unauthorized access as necessary. Any unauthorized activity should be reported to law enforcement authorities and to the three major credit companies. More information on how to handle actual or potential identity theft may be found in IRS Publication 4535, Identity Theft Protection and Victim Assistance, available on this Web site. Information is also available on the Federal Trade Commission’s identity theft Web site.
Recipients of the scam e-mail can help the IRS shut down this scheme by forwarding the e-mail to an electronic mail box, phishing@irs.gov, using instructions found in “How to Protect Yourself from Suspicious E-Mails or Phishing Schemes” on this site. This mail box was established to receive copies of possibly fraudulent e-mails involving misuse of the IRS name, logo or Web site for investigation.
The IRS and the Treasury Inspector General for Tax Administration (TIGTA) work with the U.S. Computer Emergency Readiness Team (US-CERT) and various Internet service providers and international CERT teams to have the phishing sites taken offline as soon as they are reported.
Since the establishment of the mail box last year, the IRS has received more than 30,000 e-mails from taxpayers reporting almost 600 separate phishing incidents. To date, investigations by TIGTA have identified almost 900 host sites in at least 55 different countries, as well as in the United States.
Recipients of questionable e-mails claiming to come from the IRS may also call TIGTA’s toll-free hotline at 1-800-366-4484.
The IRS has come across numerous schemes in which e-mails claim to come from the IRS. More information on these schemes may be found on this Web site by entering the term phishing in the search box.
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