Tag Archives: IRS

Tax Time Trembling

Hey, maybe MY tax guy should have used a giant mallet!
Hey, maybe MY tax guy should have used a giant mallet!

Many, many moons ago, I went to get my taxes done at one of those famous places. Like, THE most famous one. We had hit a couple of major milestones (buying our first house was the biggest) so it seemed the right time to graduate from the 1040 EZ, do-it-yourself form.

I didn’t know what to expect, but I didn’t expect THIS. My tax preparer was completely incompetent. He was so nervous he was literally trembling. He mumbled and stammered so badly I could barely understand him. And he gave terrible advice, such as “You live in Ohio but you work in Indiana? Oh, it will all even out.” Even I know that, if the city tax in Indiana is 0.9%, and in Cincinnati it’s 2.1%, it’s NOT going to “even out.”

But I was polite (shell shocked, really), paid the guy, and left. Then, I came back the next night and demanded that the branch manager re-do my forms. Believe me, there was a difference – a difference that would have led to penalties.

So, this article in the Consumerist wasn’t really shocking. It’s been 20 years since that incident. There have been so many advancements in software and technology (they have this thing called The Internet now) but one weakness remains: the human element.

An undercover investigation went, um, undercover at 29 different tax places and found all kinds of lapses in the system. Misusing earned income tax credits (EITC), ignoring side income, using incorrect forms, questionable deductions, not understanding the tax software, randomly filling in boxes to see if it magically resulted in less tax owed, and on and on. Sometimes these were honest mistakes…sometimes they weren’t.

Anyway, caution. If you think you are working with an incompetent or dishonest tax preparer, you owe it to yourself to do something about it. Or, you will owe it to the IRS, because if you end up getting caught, YOU’RE the one on the hook, not the tax preparer. So, check out the horror stories in the original piece, share any horror stories of your own at the MindField Online Facebook page, and have a great weekend!

My favorite line of the article: “When she went into a payday loan place to get her taxes done…” Yikes.

Tax Time Temptation

taxesHomer Simpson, doing his tax return at the last minute: “Okay, Marge, if anybody asks, you require 24-hour nursing care, Lisa’s a clergyman, Maggie is seven people and Bart was wounded in Vietnam.”

Tax time is an anxious time. Depending on your income bracket, your cash situation or other circumstances, you may be dreading this time of year. And you may be thinking about ways to reduce your tax bill, some legitimate, others not so much.

Just so you know, the IRS know all the angles. And they have issued a press release outlining some bad tax ideas that you, or a scammer, or a crooked tax preparer might be tempted to perpetrate.

Here are the bullet points for the IRS “Dirty Dozen” tax scams for 2015. The first three are scams that might victimize you. The rest are schemes that some taxpayers and preparers may be tempted to pull. Either way, be warned:

  • Phone Scams
  • Phishing
  • Identity Theft
  • Return Preparer Fraud
  • Offshore Tax Avoidance
  • Inflated Refund Claims
  • Fake Charities
  • Hiding Income with Fake Documents
  • Abusive Tax Shelters
  • Falsifying Income to Claim Credits
  • Excessive Claims for Fuel Tax Credits
  • Frivolous Tax Arguments

For all the details, DEFINITELY read the official press release. How about you? It’s never fun, but when you have your deductions and credits and all your documentation lined up, paying taxes can be a little less stressful. Have you got it together? Let us know over at the MindField Online Facebook page!

Tax Prep: DIY or Pro?

6856_ser_121205_TaxPrep1-LDoes it seem like the Do-It-Yourself tax preparation folks are especially aggressive this year? The commercials seem to have changed their tone, from “it’s not that hard, you could probably do it yourself…” to “NOBODY knows your situation better than YOU do, so do it YOURSELF, stupid!!”

So, you may be thinking about DIY tax prep this year and, if so, you probably have some questions. Bankrate.com ALSO has questions that will help you decide whether to DIY or hire a pro.

If you are considering DIY:

  • Do you know your tax situation – filing status, available tax credits and deductions, changing tax laws that affect you, etc.?
  • If you have questions or get stuck, will you know where to get answers?
  • Are you confident that you have kept good records throughout the year?
  • Are you really private and picky about who sees your financial and personal info?

Why you might consider hiring a pro:

  • The whole tax thing freaks you out.
  • You don’t have (or don’t think you have) the time to spend on the preparing your return.
  • You’ve had a major change in your life (kids, job, bought property, moved out of state, etc.) that’s going to complicate the process this year.
  • You think a pro will be able to “get you more money back,” which will cover his costs.

Answer these questions honestly, and it should help you make the right choice. Then, read the rest of this article to find out how to proceed, whichever path you choose. Either way, you want to get it right!

So, which have you done in the past? Are you more comfortable one way or the other? Did you go one way, and then switch? Let us know over at the MindField Online Facebook page!

Tax Time 2013!

no-stress-tax-tips-600Standby for our annual, obligatory “Last Minute Tax Tips” post!

You might be thinking: How can it be tax time? There’s still snow on the ground! Well, you better hitch up the sleigh, because Uncle Sam waits for no man, snowman!

Anyway, the web is full of hundreds of articles on last minute tax advice, all of which I will share now and here are a few to ponder.

And FYI, in recent years, Tax Day has been postponed for the weekend, or due to some holiday. But this year, Tax Day goes Old School, i.e., April 15. Yay, tradition!

So, as a humble public service from your humble public servant (me) here are the links to everything you need to know. Have a good weekend!

Forbes     •     CBS News     •     Investopedia     •     US News Money

Fox News     •     TurboTax     •     Money Talks News

Wall Street Journal     •     Yahoo Finance     •     Detroit Free Press

Helpful Tips to Avoid an Audit

It’s a word that causes much anxiety this time of year: AUDIT, as in IRS. I found an article that helps explain who gets audited, why, how to avoid it and what to do if it happens. Here are some highlights:

Most audited tax returns are selected for review either because the filer is part of a target group or because a computer program selects the return. The computer system selects many returns randomly, but there are red flags that will draw the Internal Revenue Service’s attention.            MSN Money

So, what are some red flags the IRS looks for?

  1. Math mistakes: usually spotted by the computer, a human checks it, and sometimes they let it slide. But ya nevah know, so check your math, Einstein!
  2. Mismatched interest & dividend reporting: Whoops! If the amounts reported in supporting documents don’t match the amounts on your return, you will hear about it!
  3. You’re on the IRS hit list: Too much cash income? Small business owner? Self employed?
  4. You have a big mouth: Going on Facebook and yakking about the big scam-ola you pulled on Uncle Sam? Not good.
  5. You’re exceptional: IRS computers can actually predict which returns are most likely to generate revenue from an audit, i.e. which ones are worth their time. Any big weird deductions, too much charity giving, etc. and you are likely to stick out.
  6. You have the wrong preparer: I knew one with papers stacked to the ceiling – you know, other people’s returns lying out in the open. Also, she had a huge parrot, which is weird.

So, what do you do if your number is pulled? Well, you read the rest of the article!