IRS

IRS Phone Call Lawsuit Scam

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irs phone calls publication 594

I used to be a Certified Financial Planner. My wife is an attorney. I’ve dealt with finance, and business, and courts, and the legal system, as both a professional and as a writer. And still, when I get a call and the voicemail says, “This is the IRS…” I still can’t help but tense up. Phone Calls From the IRS Of course, then I remember that these phone calls from the IRS are a scam. Look, the IRS making phone calls is expensive. You have to put someone in a room with a desk, and a computer and a phone. This is confidential government data we’re talking about, plus there are rules, laws and regulations that govern how the IRS is allowed to interact with taxpayers. In other words, we aren’t talking about room full of $10 an hour temps dialing for dollars. It’s way cheaper and more efficient to have a computer crank out thousands of letters than to have people cold calling taxpayers on their home phone numbers. Besides, by law, the IRS must notify you, BY MAIL, IN WRITING, of just about anything that could vaguely be interpreted as negative happens to you. So, why did I …

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Avoid IRS and Tax Scams

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tax scams and crimes

The IRS is used as a way to scam Americans out of money every year. Some the tax scams are very sophisticated. Others, seem like they would defy common sense. This year, the IRS put out a list of the Dirty Dozen tax scams for people to look out for. Here are some of them. Promises of Big Refunds – This is where the complexity of the tax code bites the unwary. Yes, there are a lot of deductions, and tax credits out there, and yes, some of them can be pretty unknown, but don’t believe that you’ve been way overpaying your taxes all these years, if only you’d known about a tax loophole. Research and be sure you understand before you sign your name to any weird forms. IRS Phone Call Scams – Remember, the IRS is legally required to send you notifications of most actions before you get some phone call. Ask them to put it in writing. Also, IRS agents don’t threaten to arrest people out of the blue. Arrest, garnishment, and property forfeiture all require a court proceeding. Real IRS agents won’t tell you that this is your last chance and that you have to send money …

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Standard Deduction 2011 and 2011 Tax Brackets

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Current Standard Deduction and Tax Brackets The IRS has announced new 2011 tax numbers regarding the standard deduction for single filers and for those married filing jointly, as well as the 2011 value of the personal and dependent deduction. By law, these standard tax numbers are adjusted for inflation each year. As a result, these tax deductions can increase or decrease depending upon how prices change. What Is the Standard Deduction for 2011 There was a small adjustment higher in most IRS tax numbers due to inflation. That means that most taxpayers should benefit from higher income limits and wider tax brackets than they had on their 2010 income taxes. Standard Deduction 2011 Taxpayers must choose whether to itemize their deduction or take the standard deduction on their income taxes. For most taxpayers whose income comes primarily from a job as a regular employee, the decision about whether it is better to itemize or claim the standard deduction on income taxes comes down to how much mortgage interest they pay. Basically, if the mortgage interest deduction available is higher than the standard deduction amount, then itemizing makes sense. The new standard deduction amount for 2011 is $11,600 for married couples …

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New Year Finance Checklist

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annual personal finance checklist

It’s a new year. Contrary to popular opinion, for the most part, when it comes to money, finances, banking and investing, it doesn’t really matter if the year is new or not. That being said, plenty of people take the opportunity of a fresh calendar to take a fresh look at things like personal finance and their financial plans. So, here is a checklist of things to start thinking about to make sure you personal finances are lined up for 2016. 2016 Personal Finance Checklist Don’t get overwhelmed. Not all of this stuff needs to be done at once. Put a section on your calendar each week or two, and by the end of the first quarter, your finances will be reviewed, tuned-up, and ready for the year ahead. Banking Checklist Review your checking account statements and make sure your bank isn’t charging you fees just for having a checking or savings account. If you are paying monthly fees, or minimum balance fees, find a new account. Check with your current bank first, you might just be signed up for the wrong account. Remember, at today’s interest rates, there is no way having a higher rate compensates for having to …

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Money Investing and Personal Finance End of Year

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end of year december finance money

Here comes the end of 2015, are you ready? Are your finances and investments ready? On the one hand, the end of the year means absolutely nothing to your money. Those twenties in your wallet don’t care what year it is, and your bank accounts don’t either. The stock market goes up and down before December 31st, just like it will after January 1st. That being said, there are some end of year tax issues to be aware of, as well as some smart money moves to make before the end of the year. What To Do With Money Before Year Ends Step One: Don’t Panic. Seriously. Too many people get all wrapped up in the end of the year and the start of a new year. I think that some of that comes from the added stress of the holidays, or the vacuum left behind when they end. The reality is that you and your money are probably fine, even if you don’t do anything at all before the year ends. Yes, tax deductions matter, but probably not as much as you might think. And, yes, there are deadlines, but many of them may not apply to you. With that …

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Mortgage Tax Deduction End of Year

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Every year a plethora of financial articles come out telling people how to save money on their taxes at the end of the year. It’s a fine idea, and frankly, no stone should go unturned. However, the best tax planning takes happens year round. That being said, there are numerous last-minute ways to cut income taxes by making last minute moves in December. Today, we examine one of the most common end of year tax moves, paying your mortgage early. Check here to learn how to deduct mortgage interest on your taxes. Make Mortgage Payment Early to Deduct More One of the biggest tax deductions that is available to ordinary taxpayers is the mortgage interest deduction. Simply put, the mortgage interest deduction is the ability to deduct whatever amount you pay in mortgage interest from your income taxes. There are several rules and exclusions, but they don’t apply to most taxpayers unless you have more than $1 million in mortgages or several houses. This is one of those tax deductions with no income limits.  You do need to itemize your deductions in order to claim the mortgage interest deduction. For many people, the amount of their mortgage interest deduction determines …

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IRS Hacked Again

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This is getting ridiculous. The IRS was hacked again. This time, hackers were able to circumvent the security protocols used to prevent unauthorized use of the online system to get a tax transcript. For those of you that aren’t familiar with the concept, you can see a tax return transcript example. Basically, a tax transcript is like a school transcript. It shows a summary of all your dealings with the IRS. It shows how much taxable income you had, what you paid in taxes, what, if anything, you owe, and so on and so forth. It also includes your name, address, and social security number. It also includes all your spouse’s information if you file jointly. In this particular case, it seems that the hackers did not break into an IRS database, or use phony security logins. Instead, they used the online tax transcript ordering system to just order the transcripts. As the IRS notes, it does take a fair amount of personal information to be able to order a tax transcript in the first place. The gold mine for thieves might be the spousal information. Just because I have a bunch of info on one person, doesn’t necessarily mean …

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What You Need To File Your Taxes

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If you are an American, chances are you have started receiving tax forms and reports from various companies. Recently, many companies, banks, brokerages, mortgage companies, and charities have started providing tax reports and forms electronically. Ironically, you may get a notice in the mail from these entities telling you that you will get your tax documents electronically. Forms Required to File Taxes Exactly which forms you need to file your income taxes depends upon your individual tax situation. People who own their own business have more tax forms they need. Likewise, people with more deductions, or various financial vehicles such as trusts require additional documents as well. If you have any financial accounts or situations that are not “standard” you’ll need to check with an accountant or tax professional to find out what is required for you to file you taxes. Employed by an Employer If you, or you and your spouse, are not self employed, then you will need a W2 Form from your employer to file your taxes. The W2 form lists several numbers including your total wages for the year, as well as various contributions to things such as 401k plans, or cafeteria accounts, or pre-tax insurance …

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Fourth Quarter 2014

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Welcome to the fourth quarter of 2014. It’s been an interesting year so far. Let’s jump right in. First, if you own a small business, like me, your third quarter estimated tax payments are due to your buddies at the IRS by October 15. By now, you should start having a little bit of an idea how your income might go for the year. If you are doing more business than last year, consider bumping your payment to keep up with your higher income. On the other hand, if business is off, then back that withholding off a bit too. Also, if you are a small business owner and you don’t get your health insurance through a spouse or other plan, don’t forget about the Obamacare open enrollment period for 2015, which runs from November 15, 2014 to February 15, 2015. You got an extra extension into April this year while the government worked out some bugs. That won’t necessarily be the case this year, so double-check your plan, or see what the new ones are. You can go to HealthCare.gov and they’ll redirect you to your state exchange if necessary. September Jobs Number The September labor report is due …

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RMD Rules Required Minimum Distributions Guide

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Why Are There RMDs or Required Minimum Distributions? Required minimum distributions, or RMD, is the minimum amount you must withdraw from certain retirement accounts each year. To understand why there are RMDs, it helps to look at things from the government’s perspective. The government runs by collecting tax dollars. However the government also encourages certain behaviors in its citizens and companies by permitting certain tax breaks. (One behavior this encourages is big donations to politicians by companies to get and preserve tax breaks, but that is a topic for another day.) One behavior the government tries to encourage is getting people to save for retirement. It does this by providing several tax-advantaged accounts taxpayers can use to save for retirement, including 401k plans, IRA accounts, and Roth IRA accounts. In all three of these accounts, the interest, earnings, and capital gains are exempt from taxes each year so long as the money stays in the account. Not paying taxes is the incentive to save for retirement. If you do take the money out of the account before you turn 59 1/2 years old, then you have to pay a 10 percent tax penalty. That is the incentive to not take …

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