Tag Archives: Internal Revenue Service

The Government Can Take Your Tax Refund

Taxpayers are filing their taxes early this year to avoid having an identity thief file their return before they do. But what is surprising some is that the government keeps their tax refund and uses it to pay down their student loan debt when they are in default. Called the Treasury Offset Program, the Department of Education is able to take Social Security payments and tax refunds and apply them to outstanding debt that you have not been paying.

Experts in the field say the Department of Education is required to notify you ahead of time if they intend to apply this offset program to your funds. Within this notification are rules and what you can do to avoid this happening to your tax refund at tax time.

You can request a hearing if your loan was not in default when the funds were taken and have them sent to you. Another thing you can do is to adjust your withholding on the w-9 form. This tells your employer to not take as much out of your checks each pay period. This will give you more money during the year to pay your student loan payments, and reduce your refund at the end of the year.

Also, set up a payment option with your student loan that you can afford. Getting in default of you student loan causes problems in your financial life that you would rather avoid. Your credit will be affected and the interest you need to pay on other loans is likely to go up.

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Health Insurance And Your 2014 Taxes

Tax filing season will be here before you know it, and there is a big change on the tax forms that almost 50 percent of Americans aren’t aware of. Tax filers will be required to verify that they have health insurance when they file their 2014 return, or face a penalty.

An Intuit TurboTax survey carried out by Harris Poll among over 2,000 people aged 18 or over found that around 48 percent of Americans are still unaware of this new Obamacare rule.

The deadline to avoid having to pay a penalty for the 2014 tax season has already been and gone, although 87 percent don’t actually realize that. However, about 62 percent of Americans without health insurance do realize that they will have to pay some sort of penalty for not having current and valid health insurance.

Sacha Adam, the TurboTax representative in charge of the affordable care act pointed out that most Americans simply don’t register or don’t understand the important relationship between their taxes and their health care. This is despite the fact that open enrollment is still taking place at the moment.

People living in the southern states are less likely to have health insurance than those living in other states, although about 90 percent of all Americans have health insurance.
Premium tax credits have been designed to make health insurance more affordable for families on a low to moderate income, although almost 50 percent of all Americans are not aware of these.

Almost 75 percent of those who bought health insurance through the health insurance open marketplace say that they will renew their insurance the next year. TurboTax has a strong presence in the San Diego area and the company offers information and tips on Obamacare and many other tax and health insurance topics at TurboTaxHealth.com.

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New Baby Tax Filing Tips

The first thing to consider when filing your taxes with a new baby is your tax status. If you were single before and now support the household, you should file Head of Household instead. The tax brackets are better and the standard deduction is increased for this tax filing status.

An old Social Security card with the "not...

An old Social Security card with the “not for identification” message (Photo credit: Wikipedia)

Consider informing your rich relative about the gift tax if they are thinking about gifting you over $14,000 for your new born. Normal gifts are not taxable, which is the good news.

Any uncovered medical expenses can be deducted once a 10% floor is applied to the deduction amount based on your adjusted gross income (AGI). To claim your medical expenses, use the long form 1040 and file a Schedule A Itemized Deductions form.

Claiming your new born as an exemption on your taxes requires them to have a social security number. File form SS5 with the Social Security Administration quickly, you will want to as soon as possible after the birth of your child. File for an extension if your taxes are due and you were not able to obtain a SSN in time.

Claim your new dependent on your taxes. You can shelter up to $3,950 in income with an additional dependent. Use the IRS tool for dependency if you are uncertain if you can claim your new born on your taxes.

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Get Caught Up On Your Expat Taxes

time for CHANGE ...item 1.. Déjà Vu in Gaza? -...

time for CHANGE …item 1.. Déjà Vu in Gaza? — This calls to mind the words of Mark Twain: (Nov 28, 2012 / 14 Kislev 5773) …item 2.. Cobblers, Crisps and Crumbles (Nov 29th, 2012) … (Photo credit: marsmet546)

Did you know that there are over 7.6 million American people living or working overseas? Half of these people are only filing their US tax returns, despite still being citizens. It is clear that many expats do not realize that they still have an obligation to the US Federal Tax. This means that they are in fact targets for the IRS. Luckily, there are ways to get rid of this worry and move on.

The Streamlined Filing Procedures

This is probably the best way to deal with filing taxes if a person was not aware of them. This is a great program that was designed to be able to fix tax problems without seeming like you were hiding amounts of money, or knowingly evading taxes. Most people fall into this category if they live overseas. This means that they have to only provide the last 3 years of Federal Tax Returns and 6 years of Foreign Ban Account Reports. The trick with this is that you only need to file the FBARs if you hit at least 10,000 or more during a tax year, even if only for a small bit of time.

This procedure is wonderful because the IRS has recently deigned to waive all late fee penalties and filing deadlines. This does still mean that they have to be filed, however, so that you do not end up owing. Most people end up not having to owe any money anyway.

Being able to get your taxes fixed up no matter where you are living in the world is important, but even more so if you do not currently live in the United States and are still a citizen. Filing taxes is important!

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Should you give back to your school?

English: Cadets of the Air Force Academy Class...

English: Cadets of the Air Force Academy Class of 2003 celebrate at graduation ceremonies on May 28, 2003 as the Air Force Thunderbirds fly overhead. The 974 students marked the academy’s 45th graduating class. (Photo credit: Wikipedia)

Graduating from college is a wonderful achievement, and you may have spent an appreciable amount of money to make it happen.

Ironically, graduation may tie you to your school even more, and the interaction may last for years to come.

Money Concerns of College Alumni

College is beneficial for the student and the school. The learning institution provides opportunities for your future success, and your successful endeavors after graduation serve as a testament to the school.

Newsflash: Your success is gauged by your income!

Your healthy income is a tangible way for your college to verify their skill in preparing students for their future success.

Many graduates give back to their schools when filing taxes or as part of other financial activities. Reputable publications such as U.S. News and World Report use the percentage of alumni who donate as an important ranking factor, and this is why many colleges begin asking for alumni donations so soon after graduation.

The Benefits of Donating

You may feel grateful for your educational experience, and giving back can be an ideal way to display your appreciation.

You may benefit when filing taxes if you make a charitable contribution to your former college. This deduction may reduce your taxable income and any money that you may owe at tax time, and you may receive more money back if you are entitled to a tax refund.

Your degree can appear more valuable by many aspects as your school maintains or improves its good reputation and ranking.

The Financial Considerations of Donating

You may want to support your college, but it may be advantageous to wait if you have student loan or credit card debt to settle at present. Most colleges have multiple avenues for raising funds, and you can support your college when the time is right for you.

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Maintain Security When Filing Taxes Electronically

How to maintain security when filing taxes electronically

Millions of U.S. taxpayers have used electronic software applications like TuboTax.com to e-file their taxes, many doing so from the home desktops. Roughly six percent more consumers are using this method of submitting tax forms, than the numbers who did so in 2012.

Though e-filing is convenient and easy, it can create a risk to the taxpayer, with the filing of fraudulent tax forms and and identity theft. These undetected thieves were able to get away with over three and a half billion dollars in 2011, according to the Inspector General.

The following tips for protecting your information and identity are offered by experts in internet security

Don’t assume all emails genuinely originated from the Internal Revenue Service!

One method of committing fraud is to send an email to the taxpayer, pretending to be the IRS. This form of gaining access, known as phishing, allows malware access to the user’s computer, to gain access to important taxpayer information. The emails can look like official requests from the government office and may claim some kind of problem with a social security number or taxpayer information. Many taxpayers have provided such information, unaware they are handing it over to an imposter.

The IRS never sends emails or text messages to taxpayers, to clarify personal identity or correct taxpayer information. Any person who receives a suspicious email message should forward it to the IRS, without opening the message itself or any attachment.

Keep Personal Information Safe

Aside from being aware of false email messages, taxpayers can take additional measures to protect personal data. Using a different password for electronic tax filing, from those used for other internet accounts, is one safeguard that makes it more difficult for cyber criminals to get your information.

Avoid sending tax files to the IRS in public locations where wireless internet is available. These connections a re open to all users and can be accessed by anyone, thus improving the changes of gaining access to an individual’s personal computer. Home networks that are password protected are best for sending tax forms.

Social networking sites like facebook are other places criminals hang out to gain personal information. If your site includes minor children, the thief now knows you claim dependents on the tax return, which allows them to make fictitious tax returns look more like the real thing.

Breaches in internet security are another cause for concern. The recent incidents with Target, Sony, and other retailers shows how easy it can be for cyber thieves to get account and personal address information.

No Refund

No Refund (Photo credit: cheerfulmonk)

Though these incidents can occur, the internet e-file process is generally secure. There are red flags to look for the keep your information safe. Filing Taxes using the e-file method and software such as TurboTax.com can make the tax filing process a much simpler ordeal that saves time and money.

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