Watch Out For Tax Scams

Twelve tax scams to watch out for.

Be wary of anyone sending you an email claiming to be from TurboTax or the IRS. These people could be identity thieves and not who they say they are. Never reply to an anonymous email that wants to know your personal information.

Instead of replying to an email always call the organization that you are dealing with yourself. Do not go to any links that are in the email because they could be sending you to an unsafe website. Keep reading to learn the twelve most popular tax scams out there. Remember if you are caught in any sort of tax scam, then you will have to pay for it.

  1. Offshore accounts. People will try and evade paying United States taxes by placing their money in hidden offshore accounts.
  2. Stealing someone’s identity. If you get an email that looks suspicious, then send it [email protected].
  3. Tax preparer fraud. Some tax preparers will steal a portion of their client’s refund, so be sure that you only deal with a registered IRS tax preparer.
  4. Filing false forms and trying to get money that they are not entitled to.
  5. Fake Arguments that are just promoting a way for people to avoid paying what they owe in taxes.
  6. Social security with to much withholding credit.
  7. Deducting to much for charities and other tax-exempt companies.
  8. Abusing their retirement plans.

  9. Corporate ownership disguised as a third party.

  10. Filing a false zero wage return.

  11. Avoiding taxes through trusts.

  12. Exaggerated fuel tax credits.

If you are aware of any type of tax fraud, then call the IRS at 1-800- 829- 3676 or use form 3949-A. You might be rewarded for your honesty by filing form 211 and following the proper procedures that are discussed in Notice 2008-4.

Using Turbo Tax To Avoid A Tax Audit

Turbo tax is a popular software package for filing income taxes accurately in order to avoid a potentially costly IRS audit. Audit letters arriving in the mail can be a significant source of anxiety and stress. Some of these notices are only to call the recipients’ attention to oversights such as a missed signature or a math mistake. More serious IRS letters address discrepancies in reported income or deductions.

In addition to a quality tax preparation software package, tax filers are also advised to gather their needed paperwork ahead of time and to keep a few important numbers in mind. Although the process may seem intimidating at first, TurboTax has plenty of resources on the company’s website available to get newcomers started.

IRS officials often report that most taxpayers using TurboTax are honest about filling out their returns and only make mistakes by oversight. The IRS also has a variety of screening processes to catch those who purposefully submit inaccurate tax information. The decision to audit a certain return often comes from examining certain computer data algorithms. The first main thing that IRS agents will look for in 2012 taxes is the presence of numbers that do not add up or that should not be entered in certain columns. The first step to an audit is known as a review examination in order to verify a submitted return’s overall accuracy. On average, only a small percentage of filed tax returns are subject to audit within a given year.

Pay Your Taxes On Unemployment Insurance Benefits

When filing your 2012 taxes, make sure you pay taxes on your unemployment insurance benefits.

While the rate of unemployment may be reducing, there are still millions of people who are unemployed. Sadly, these individuals also have to pay taxes on their unemployment insurance benefits.

If you are unemployed and you collected unemployment insurance benefits last year, you must pay taxes on it. After calculating your tax incidence, you will be surprised at the amount of tax you owe the government, unless you requested the federal government to withhold taxes.

The VP of TurboTax, Bob Meighan says that people still think that unemployment benefits are not taxable. While that might have been the case in 2009, congress reviewed that provision.

However, when filing your returns, you will find yourself in the lowest tax bracket because of your low income. In fact, you might also find yourself qualifying for several tax breaks.

Terry Lemons, I.R.S. spokesman says the agency encourages taxpayers to take advantage of things like earned income credit when they lose their jobs.

He also said that the agency encourages individuals to file their returns even if they do not have the money to pay their taxes. In such cases, taxpayers can benefit from installment agreements to pay their taxes.

Many households in the U.S are still recovering from the Great Recession of 2007 – 2009. According to government statistics, more than 13 million who are not employed have stopped looking for jobs because companies have not yet started recruiting new workers.

Fortunately, those who spent the better part of 2011 can get tax breaks on 2012 taxes.

When Is The Achievement Of Debt Relief Impossible To Happen?

Even if there are several means present nowadays to help you achieve debt relief, there are still certain instances in which it is just impossible to happen. Yes, you’ve heard it right. Though debt relief does not necessarily mean totally blowing away your debts but rather reduce it to a tolerable amount, still such state is impossible to happen in certain instances. Why? Read on to know more about the answers.

First of all, your attitude towards managing your debts adversely affects the result. If you are optimistic enough that your debt related problems will soon be gone, it will really be gone. However, if you keep on thinking that you are stuck to it and there’s no way out, of course that will really happen. Your attitude towards your problem is translated on your actions. Thus, if you think negatively, you will act negatively as well.

Another instance that will make debt relief impossible is when you still stick to what you normally do- living a luxurious life, buying items that are not necessary, going for grand yet uncalled for vacation, endless shopping and many others. If you know that you are already buried in burdens, cut all these activities. Live a simple life. If you still go on with that life, you’ll probably incur more debts.

Finally, when you are too passive, nothing will happen. If you just look at your debt problems, it will just blow up. In short, penalties will accumulate until such time you can’t bear them anymore. Running away from it will also do you no good. It will just add up to your problem. Your fear of facing the problem as well as your passivity makes its solution way too impossible.

If you have finally realized to stop these old ways and make your move, check out more ideas on debt relief as well as on retirement investing at Free Financial Planning Advice.

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The Necessity of Debt Consolidation

When you are in serious debt, you cannot avoid getting annoying phone calls and embarrassing confrontations with debtors visiting your home. A number of people prefer to avoid such situations, but they are confused on what to do about it. There are times, when paying off your loan is not really the problem. The real problem is that you do not know how to go about it.

A secured debt consolidation is the answer to individuals who lack the kind of organization needed to properly pay off loans from numerous sources. Proper management of income and payment is needed for people get back to their normal routine.  That is why there are many debt consolidators out there who are offering their services. These entities can aid you in saving your properties and other assets. The main attraction and feature of debt consolidation are the putting together of all your different debts and creating a functional payment scheme to address this consolidated debt.

There are several benefits that you can reap when you decide to the services of debt consolidating firms. You do not have to receive phone calls and demand letters. You will also find a secured way of keeping your remaining assets and property. Another benefit is that the debt consolidators will help you avoid declaring early bankruptcy. Your chosen debt consolidation firm will be dealing with creditors. They will find a way to guide you in reducing your present debt with such creditors.

Initial consultation with a debt consolidation firm involves evaluating your present debt and credit status as well examining your present source of income. The firm will then draft a debt consolidation quote specifically designed to address your unique situation. This quote will reflect the rate and frequency of payment. It will also show an efficient payment system that will eventually pay off all debts in a specific period of time.

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Do High Yield Safe Investments Exist In Investing

High yield safe investments are what every investor is looking for.  However, finding them is not always easy.

If safe high yield investments were plentiful then they would not be considered high yield.  If everyone had the same opportunity to invest then returns would be average.

When you think of a safe investment most of the time you think about CDs and bonds issued by the government.  The only problem is they only net you anywhere from 2-3% on your money.  One investment to consider is fixed annuities.  They are offered by many finance firms.  They do not get you past the 10% mark but it is a start.

Many of these annuities can get you at least a 5% return on your money.  So that is nearly double what a CD or bond can get you.  Insurance companies that offer annuities are great because of the money being tax deferred.

You want to be very careful when selecting your company.  Check their financial records and see if they are making a profit.  You do not want them to default on your money.

Because of this you really need to pay attention to their financial history.  If they have a long history of being profitable and there is a steady stream of income and profit then it is a safe investment.

If you are trying to get higher than 5% there are a lot of other options.  Make sure you get expert financial advice before attempting investing in any of these: currencies, forex, stocks, and real estate.  These are riskier but can earn you a lot of money.

To be honest the higher the risk the greater the return or loss.  Such is the nature with these types of investments.

A lot of those high risk investments are just like playing the lottery.  You can do well and get a very high return on your money.  Or you can lose it all.  With an annuity you are guaranteed money every year and they can be a great choice for the long term investor.

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