IRS

What Are the Warning Signs of an IRS Audit?

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Where's My Refund

Worried about an IRS audit? Learn the warning Signs of an IRS Audit, and find out what to do if you’re flagged with this guide!

Worrying about an IRS audit is something no one wants to face. But if the Internal Revenue Service identifies certain questionable activities in your tax returns, you may be targeted for an audit. This guide will explain the types of red flags that trigger an IRS audit and steps that you can take to ensure a smoother process.

Signs of an IRS Audit
Signs of an IRS Audit

Unreported Income:

The most common factor that will trigger an IRS audit is unreported income. If the IRS detects a discrepancy between the income you’ve reported and what the agency expects, they may investigate to uncover any additional income that has not been claimed. Make sure to include all your sources of income, including investments and royalties, to avoid any discrepancies … Read the rest

Tax Tips: I Do Declare

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Did you know that there are hundreds of little things that you should be declaring on your tax returns? Here are some of the most important items that must be declared on your federal and state tax return.

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All Sources of Income
The tax code of the Internal Revenue Service (IRS) requires that all income earned or received must be reported on your income tax returns. The categories of income recognized by the IRS include the following:

•    Wages, salaries and tips
•    Interest on bank accounts, certificates of deposit, bonds and other investments
•    Capital gains
•    Business income
•    Alimony
•    Income from bartering
•    Dividends
•    Annuities, pensions and lump-sum distributions
•    Rental revenues
•    Gambling income
•    Earnings from agriculture and fishing
•    401(k)
•    Unemployment benefits

Each of these types of income must be declared on your income tax return. In some cases, losses in … Read the rest

Form 990 Redesign for Tax Year 2008 (Filed in 2009)

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On December 20, 2007, the IRS released a redesigned Form 990, Return of Organization Exempt from Income Tax, for tax year 2008 (to be filed in 2009 and later years). The new form incorporates comments and suggestions from the over 650 e-mails and letters received during the comment period, which closed on September 14, 2007. Here’s more about the Form 990 Redesign:

The redesign of Form 990 is based on three guiding principles: enhancing transparency, promoting tax compliance, and minimizing the burden on the filing organization.

Additional information:

  • Press release (IR-2007-204)
  • Overview of 990 redesign
  • Background paper on Form 990 redesign
  • Form Redesign Forms and Highlights
  • Frequently Asked Questions
  • Discussion Draft (June 14, 2007)
… Read the rest

Experts Say Charitable Tax Deduction is Safe from Congress

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According to experts from the nonprofit sector, charitable tax deduction laws will likely remain unscathed from Congress in the near future. However lawmakers are still dealing with several charitable tax break issues that expired in 2013 and there is uncertainty on whether such tax breaks for charities will continue to exist.

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President Barack Obama has consistently tried to limit the amount of tax savings the rich get for itemized deductions and will likely mention this issue is his upcoming proposed budget. However individual adjustments in tax policy typically don’t stand a chance in getting passed unless they’re grouped together

Charitable Tax Deduction
Ron Wyden and Nancy Bass Wyden by David Shankbone (Photo credit: Wikipedia)

with other tax items. Experts say creating such a large tax bill likely won’t happen before midterm election in November.

Adding to the difficulty of altering charitable tax deduction policy is the probable change in Congress. Democrat of Montana … Read the rest

Avoid IRS Scam Pitch When Filing Tax Returns

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Brett Doubikin, a 43 year-old Morrow County contractor, received a phone message informing him that the IRS was investigating him. Fear made him return the call while he tried to remember if he missed something when he filed his taxes.

What Doubikin later realized is that the call was part of a sophisticated phone scam involving fake IRS employees who present fraudulent claims in order to get money from people with little or no tax knowledge. The charlatans posing as IRS employees are known to threaten people with either jail or deportation if these victims fail to deliver the declared debt amount. Part of these scammers’ scheme was to inform victims that their taxes were not paid, which must hence be settled through wire transfer or by using a pre-paid debit card. To make things appear legitimate, the callers use false IRS badge numbers, acquire the last four digits in … Read the rest

Top Five Reasons To Adjust Your Withholding

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Your withholding is the amount of money you have taken out of each paycheck to apply toward income taxes.  When your taxes are filed at the end of the year, any amount that the Internal Revenue Service withheld is credited toward your tax bill.  I, like many others, am unable to afford my own certified public accountant, and just hope that  the amount withdrawn from my income will match up to the total taxes I owe.  Usually that isn’t the case, but luckily, up until this point, I’ve only overpaid and earned a refund back from the IRS.  Those who underpay end up getting a stiff bill, and may end up having to pay penalties as well.

According to the IRS, the average individual tax refund in 2012 was $2700.  That calculates out to an average individual overpayment to the IRS of $225 per month.  I have learned through a … Read the rest

Majority Of Americans Against Cheating On Taxes

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Majority Of Americans Against Cheating On 2013 Taxes

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Each year as tax time rolls around we are forced to take a hard look at our financial records and situations.  Some of us are happy at this time of year as we know we will be receiving a refund from the Internal Revenue Service.  Others are not as happy as they know they will owe the IRS money.  With the IRS only auditing a mere one percent of all individual tax returns each year, it can be tempting to cheat on your taxes in an effort to not owe as much money to the federal government or to receive more money back.

If your own ethics and morals do not stop you from cheating on your tax return, perhaps a little peer pressure will.  A recent random telephone poll conducted by the IRS Oversight board shows that 87 percent of … Read the rest