Today's post on the second half of the 2024 Internal Revenue Service's Dirty Dozen tax scams looks at a wide range of schemes and potential victims. Tax pros are targets, as are high income earners in schemes 7 through 12. Together with the Dirty Dozen's first six scams posted last week, there's a scam for almost all of us taxpayers. Take notice and don't become a Dirty Dozen victim. Last Friday, I shared the first six of the Internal Revenue Service's annual Dirty Dozen list. As promised, this post wraps up schemes, cons, and scams 7 through 12. This compilation... Read more →
Tax preparers
Photo by Zachary Keimig on Unsplash The Internal Revenue Service is processing millions of returns that are coming in as Tax Day for the main 2024 tax season nears. But thanks to added Inflation Reduction Act money, the tax agency also is looking more closely at some returns. It recently resumed sending automated notices that had been on hold since February 2022 due to COVID-19 pandemic problems. And it got even more attention when IRS Commissioner Danny Werfel announced that his agents were going to crack down on individuals who use corporate jets for personal travel jets. While most of... Read more →
A scenic overlook is always worth a stop when traveling. But when it comes to taxes, you definitely don't want to overlook tax breaks that could save you money. (Photo by Gary Yost on Unsplash) There are two ways to reduce your tax bill. You can take deductions, which reduce the amount of your money that's taxable. You also can claim tax credits, which cut any tax you owe dollar-for-dollar, and in a few cases get you refund. The options are not mutually exclusive. But they don't do you any good if you don't claim the ones to which you're... Read more →
Conversations in American Sign Language (ASL) are common. Getting tax help from preparers fluent in ASL, not so common, despite a large hearing impaired or deaf taxpayer community. (Photo by SHVETS production) The U.S. Census Bureau's 2021 American Community Survey (ACS) says about 3.6 percent of the U.S. population, or about 11 million individuals, consider themselves deaf or have serious difficulty hearing. The Hearing Loss Association of America estimates that 48 million Americans have some degree of hearing loss. Deafness not only affects individuals, but also their families and friends, their jobs, and yes, taxes. IRS options for deaf taxpayers:... Read more →
Unsplash+ in collaboration with Getty Images The smartest tax move often if hiring a good tax professional. Unfortunately, the tax community is not immune to bad actors. Every year, the Internal Revenue Service warns taxpayers to thoroughly vet the person they want to hire to handle their taxes. Every year, the IRS also issues warning about unscrupulous tax preparers who take advantage of trusting taxpayers and take their money. These alerts also are routinely part of the IRS annual Dirty Dozen scam list; dishonest tax pros is #6 on the 2023 list. (Preview: the 2024 list is on its way... Read more →
Crooks know you're anxiously awaiting your tax refund. That's why this filing season they're again impersonating Internal Revenue Service agents. The latest refund scam is an email or text about your tax refund or tax refund e-statement. In both cases, warns the Federal Trade Commission (FTC), the messages are efforts to steal your identity and money. As in previous incarnations, these latest fake IRS messages encourage recipients to click a link, supposedly to "check on your tax refund e-statement," or "fill out a form to get your refund." The FTC provided the image below of one of these fake IRS... Read more →
Photo by JESHOOTS.COM on Unsplash Throughout life, we all encounter momentous firsts. First day of school. First time at a paying job. First time holding your child. First time you file a tax return. OK, that last one is probably not an event you celebrate, even if it produced a tax refund. In fact, if you remember filing your first Form 1040 it at all, it's probably because it was not a good experience. There's no way to replace that bad tax memory. But there are steps that first-time tax filers can take to make sure their initiation into the... Read more →
In February 2022, the Internal Revenue Service stopped issuing several automatic tax notices. The move was prompted in large part by the massive backlog of tax filings that piled up when the agency closed offices as a precaution early in the COVID-19 pandemic. That tax notice moratorium is ending. Automated collection notices will soon show up in the mailboxes of individuals with tax debts prior to tax year 2022. Businesses, tax exempt organizations, trusts, and estates with tax debts prior to 2023, with exceptions for those with existing debt in multiple years, also are on the notice resumption list. These... Read more →
Hiring a tax professional is not a task to take lightly. Filing false tax returns gets tax preparer 2+ year prison term, order to repay $4.7 million to Treasury You need to find tax help that fits your specific financial and tax needs. You then must make sure that the tax pro is just that. Professional. And reputable. Unfortunately, there are too many purported tax pros who turn out to be crooks. One of them, however, was caught and now will spend more than two years in federal prison. After he gets out of jail, he will face a year... Read more →
Hello, February. Even though it's the second month of the year, it's the first full month of the annual tax-filing season. So if you're just now starting to focus on filing your return, don't feel bad or alone. A lot of us are right there with you. Since February is the shortest month, even with this year's extra Leap Year day, I'll keep the monthly tax moves list brief, too. Here are four tax moves to consider in the next 29 days. 1. Keep an eye out for tax statements. Yesterday, Jan. 31, was the day that employers were supposed... Read more →
Taking things a bit more slowly often is a good idea. For many, that approach also applies when it comes to filing their annual tax return. (Photo by Kay Bell) While millions of taxpayers are eager each January to get their returns to the Internal Revenue Service, there just as many who want to take their time. Some are just natural procrastinators. They wait until the last minute to finish every task. But when it comes to tax filing, there actually are some good reasons to not be in such a hurry. Here are seven. 1. To see if Congress... Read more →
Fortune cookie tax filing wisdom (Photo by Kay Bell) If the 2024 tax-filing season is anything like previous ones, millions of taxpayers sent their 2023 taxes to the Internal Revenue Service today, the official start of federal return processing. The most obvious and common motive for first-day filing is to get expected refunds. But there are some other reasons you might want to file your taxes early. Here are eight. 1. To beat tax ID thieves to the punch. The IRS and its Security Summit partners have made good progress in recent years in reducing tax identity theft and associated... Read more →
Most taxpayers will never be as chill as this tabby, especially now that the annual tax filing season is here. But these tips could make the tax task a little easier. (Photo by Jacalyn Beales on Unsplash) If you've already got your 2023 tax return ready to send to the Internal Revenue Service tomorrow, Jan. 29, when the agency starts processing filings, you can peruse other items on the ol' blog. (Thank you!) If, however, you're not quite ready yet to tackle Form 1040, I got you. Even when your taxes aren't complicated, many of us dread filling out tax... Read more →
Photo by Nataliya Vaitkevich A new tax season also brings the resurgences of tax scams. The Internal Revenue Service and its Security Summit partners earlier this month alerted tax professionals to watch out for a new round of filing season-related email schemes where cybercriminals pose as potential clients. Now FinCEN, the Treasury Department bureau that focuses on financial crimes, notably money laundering and terrorism, reports that there have been fraudulent attempts to obtain information from individuals and entities who may have to comply with new Corporate Transparency Act reporting requirements. Here's a look at these two schemes popping up as... Read more →
The 2024 tax filing season has started. Sorta. Eight tax software companies now are available to eligible Free File taxpayers. Some business returns can be e-filed starting Tuesday, Jan. 16. On Monday, Jan. 29, the Internal Revenue Service officially begins processing all 2023 tax returns. While this filing season is expected to be relatively smooth, some taxpayers typically encounter problems. And every year, the National Taxpayer Advocate (NTA) details the most annoying tax complications that we, and the IRS, face. 10 most serious taxpayers problems: Those concerns are included in NTA Erin M. Collins' 2023 Annual Report to Congress, released... Read more →
Now that we know the Internal Revenue Service will start processing our 2023 tax returns on Jan. 29, taxpayers are thinking about how they'll deal with this annual filing task. Many taxpayers are concerned about tax law complexity. Some are looking for the most tax breaks that will get them a big refund. Others worry about the cost of filing. And all of us just want the process completed as painlessly as possible. Regardless of your tax concerns, you have lots of filing options. Here's a quick overview. Go pro: You can hire a tax professional, either an independent tax... Read more →
Tax mistakes, unintentional or otherwise, mean penalties when discovered by the IRS. And the amounts could add up. (Photo by Polina Tankilevitch) The United States' tax system depends on voluntary compliance by taxpayers. But Uncle Sam is no fool. He and his tax collectors are believers of the adage "trust, but verify." The Internal Revenue Service also follows up on that verification with penalties when it finds taxpayers — and the professionals we pay to take care of our taxes — aren't fulfilling our tax responsibilities on our own. The most severe punishments come via criminal tax prosecutions. The IRS... Read more →
Photo by Anya Batalova on Unsplash We don't get many — OK, not any — kids dressed as ghosts on Halloween night. Our neighborhood's youngsters seem to prefer dressing as comic book icons turned movie characters. Heck, last week I even saw an adult, or a very tall teen, dressed as Spiderman, full-face mask included, during my last grocery store visit. But that's for another blog post. Or a call to the local authorities. Getting back to ghosts, notably those with tax connections. As I mentioned in an earlier post, ghost employees and ghost employers can wreak havoc when it... Read more →
The rich and famous frequent Monaco's glamorous casinos. The European principality also was the base for a U.S. taxpayer who didn't report all his taxable income to the IRS. The lesson, for him and an unconnected counterpart in the prime U.S. gambling destination of Nevada, is that the house — in this case, Uncle Sam's tax agency — usually wins. (Photo by Kaja Sariwating on Unsplash) Many people liken dealing with the U.S. tax code to wagering. You try to follow the casino rules and common sense, but the temptation to push your luck is often too enticing. Sometimes those... Read more →
UPDATE, Sept. 5, 2025: Has your state joined Direct File? Check out this special Direct File 2025 Participating States page. The 2023 filing season officially ended for most U.S. taxpayers on Monday, the Oct. 16 extension deadline. Now the Internal Revenue Service is looking forward to next year. The agency today announced that its finalizing a Direct File program that will involve at least four states. Arizona, California, Massachusetts, and New York officials have decided be a part of the 2024 filing program, which will be under total IRS purview rather than in conjunction with the tax software industry as... Read more →