Tips On Preventing Tax Refund Identity Theft

Tax Refund Identity Theft

Tax filing tips can help someone prevent tax refund identity theft, but there are tax filing tips that can keep someone from becoming a citric of this crime when he is filing his taxes 2011 or his taxes for any other year.  There is vital information a person must place on every return. The return needs his name and his social security number. He needs to be honest about his income, but if more than one social security return is filed for the same  number may or may not send up a red flag. The IRS cannot check everyone.  The checks or the debit cards need to be sent to their intended recipient.

Many people rely on their tax return to make large purchase. Some people use their taxes to buy new cars or to make other large purchases. If the IRS gets two different terms from the same social security number, it flags the return. IRS agents need to go over the return manually. The need to process a return manually can delay the return for weeks or months. The IRS needs to figure out which return is legitimate and which return needs to be processed.

A taxpayer who has followed the rules all of his life may wonder why  his tax return has undergone such scrutiny. It has to do with the way the organization processes returns. The return that gets handed in first is processed first. A later return coming in later causes an investigation to be launched. There may be times when the mistake comes about because of a transcription error. There are other times when it comes about because someone has stolen the original taxpayers social security number.

Did You Know That The United States Will Soon Have The Highest Corporate Taxes?

Believe it or not, the United States is about to have the highest corporate taxes of any other industrialized country. Right now, only Japan has a higher corporate tax rate than the United States. However, that is all about to change very soon.

In less than a week, Japan will be reducing its corporate tax rate to 36.8 percent, while the United States will continue to have corporate taxes of 39.2 percent. This is calculated by combining the current business tax rate of 35 percent with average state taxes of 4.2 percent. It is a curious state of affairs, especially considering that the United States attempts to be an attractive market for corporations.

In addition to Japan, many other countries including China, Russia, Germany, and Canada have lowered their corporate taxes, in response to the current global economic climate. Americans could truly benefit from a reduction of the corporate tax rate. Many companies are unable to provide high pay rates, raises, or bonuses for their employees because of the exorbitant corporate taxes that they have to pay.

The United States prides itself on being first in many things. It is unfortunate that we now must add ‘First in corporate tax rates’ to our list of attributes. Hopefully, President Obama and the other Democrats in office will see reason and reduce our corporate taxes, so American workers can once again go to work with the hopes of receiving fair pay rates, raises, and bonuses.

New Jersey Residents Look For Lower Tax Assessments

The Sfarras in Teaneck disputed the tax assessment on their home last year, which helped the value fall by almost 12%. This let them save almost a grand a year in property taxes. Dorthy Monooopli also did something similar, reducing the value on her home by 30k.

These are only a few of the people who are trying to get lower tax assessments due to the falling prices of real estate over the last few years. As the filing date for tax appeals gets closer, many people are trying to file the proper documents.

William Dressel, in charge of of the League of Municipalities, says that that such efforts are lowering the amount of property taxes that a town gets, which might reduce the services citizens get because of lack of funds.

A common strategy is for towns is to do an area wide assessment of real estate, so everything is in line with current market values. This makes it more difficult for homeowners to dispute the value of their homes.

Home prices have fallen about 20% since the housing bubble. However, an appeal is not guaranteed. Towns determine the value by using a ratio that takes into account the current state of the economy.

The city of Teaneck has a current tax ratio of near 104 percent. This means that lower tax assessments are possible, because the assessment is more than the real value. If a home was valued at $100,000, it would only be worth $96,000.

Money Saving Tips For Taxes

If you want money saving, one area you might be considering saving in is taxes. There are many potential reasons you could get a tax break. Therefore, before filing, make sure you look into them. Here are 4 categories that might qualify:

Job search

First of all, if you switched jobs, started a business, or conducted a job search, you could qualify. You can claim the job search expenses, such as making resume copies, placement agency costs and attending seminars for careers. If you had moving costs related to your new job, this could be tax deductible. The tax moves deduction just depends on how far you moved, and how long you spent. To qualify for any of these, the job search expenses must have been at least 2% or more of the gross income for the year.

Home office

A lot of business owners are working from home today. If you use a portion of your house just for business and consistently for business, meet with clients in your house, or have a business portion of the house separate from the main home, you could qualify.

Dependents

If you had a baby, sent someone to a university, or put kids in daycare this year, you could qualify for deductions. Also, you can get deductions for every dependent you have.

Education credits

The American government gives tax credits and deductions to encourage more people to go to college. Therefore, if you, your spouse or your kids attended college this year, it could qualify for a tax credit.

What cannot qualify

The first $2400 you made from unemployment used to be tax free. However, this is no longer the case, as this provision ended as of 2010. This year, you have to pay taxes on all the unemployment benefits you might have gotten.

Conclusion

When it comes to money saving, tax deductions are one of the best ways to save. Just evaluate your situation and see which you qualify for.

Unusual Tax Deductions Can Be Risky

Should you take a risk on tax deductions? My answer would be no. The turbo tax software site says the same thing. I am not one to take such risks. However, others have dared to boldly go where no tax payer has gone before.

One group of accountants in Minnesota decided to take a survey to compile a list of unique and strange tax deductions. It is a good thing their accountant talked them out of claiming such things or else they would get an angry letter from the IRS.

It is amazing what some people try to list as deductions. One handyman in Minnesota though they could take a $25000 deduction for the miles he traveled back and forth to work. Their business revenue is $10000. An accountant in the Minnesota CPA group who gave the surveys had a client with a huge amount of  expenses on  a luxury vehicle. They thought the tax deduction was legal though they resided in another state. One client wanted to list a city official as a dependent because they paid the salary.

Some people think you can claim a spouse. According to the turbo tax website, you can get a deduction for a dependent spouse if you file jointly. You cannot claim former spouses as one person tried to do. It is also  a good idea not to inflate charitable donations. Odd deductions can get you audited by the IRS. The ironic thing is you can claim some strange deductions according to turbo tax.