Tax Refunds & Advice

Phishing is nothing more than an internet based technique used to collect financial and/or other information from unsuspecting individuals. The IRS has put this scam at the top of the list of those that taxpayers should be aware of. If you are not careful about what you are doing and answer unsolicited emails, you may end up putting your financial information in the wrong hands.

The IRS is also warning people to be careful of anybody posing as an IRS representative wanting to speak about the upcoming economic stimulus payments. Scammers are using this as a way of tricking individuals into divulging personal and financial information including social security numbers, bank account information, etc.

This year alone, more than 1,500 phishing scams have been forwarded to the IRS by alert taxpayers. These thieves use the information they collect to open credit cards in others names, steal from bank accounts, and take out loans.

The best way to avoid becoming victim of a phishing scam is to keep financial information close to the vest. You should never share any information unless you are 100 percent sure of who you are speaking with. Anytime that you receive an email from somebody claiming to be an IRS representative you should be extra cautious. Additionally, you can also forward these emails to the IRS in order to make them aware of the common scams that are circulating.

With phishing scams on the rise, it is important for taxpayers to be very careful as to which emails they reply to. As a general rule of thumb, never share your personal or financial information via email.

Are you going to be visiting with your tax professional within the next couple of months? If so, you are just like millions of other filers. While there are some personal questions that you are sure to ask, you will also want to consider those that are more general in nature. Here are three inquiries that you do not want to forget this year.

1. Additional Tax Rebates: Ask your tax professional about the additional tax rebates that will be sent out in the Spring. Chances are that you will be receiving one of these checks that are meant to “stimulate” the economy. For many, this is a great chance to get extra money to pay bills, save, or just splurge.

2. Pay Ahead of Time, Don’t Owe: If you owed the IRS money this year, ask what you can do to avoid this in 2008. It is always better to receive a rebate check than to owe money. Make sure that you pay enough in taxes this year so that you can reap the rewards when the 2009 rebates are mailed.

3. Change of Tax Situation: Are you going to be making any changes to your tax situation this year? This could include anything from buying a second home to starting a business. If so, get the advice of your tax professional. He or she can tell you what to watch out for, how to stay on top of taxes, and much more.

All in all, these three general questions are important to keep in mind when you meet with your tax advisor this Spring. Of course, you will also want to ask more personal questions as well. Remember, now is the time to get everything set up for a successful 2008!

Preparing a tax return can be difficult. Luckily, there are tips that you can implement to make things as easy as possible on yourself. Even if you do not use all of the following tax tips, you should be able to make a couple of them work for you.

• Hire a Tax Professional - If you do not know what you are doing, hire a tax professional or accountant to help. Professional assistance can come from a CPA or a tax franchise that specializes in individual returns.

• Use Tax Software - Tax software can help if you plan on filing your own return. As long as your tax situation is not overly complex, tax software will work wonders for you.

• Schedule Some Time for Taxes - Give yourself plenty of time. If you start to file your tax return the day before it needs mailed, you will be up against a wall. Instead, leave several weeks or months so that you do not get stuck in a bind.

• Keep Good Records - Keep good records during the year. This will help to cut back on your stress level when filing your return.

• Organize Everything Organized - To go along with tip number four, keep your records organized. This includes everything from receipts to bills to paperwork from the IRS. Anything you think you may need to file your tax return should be kept in an organized fashion.

• Obvious Deductions - Do not overlook obvious deductions. This is a common mistake made by people who file their own return.

• Defer Income to Next Year - If possible, defer income to next year. Of course, this is not always as easy as it sounds, but if you ask your employer to pay a year end bonus in January instead of December, it could help your tax situation immensely.

• Mistake Free Tax Return - Double check your return before sealing and sending it off to the IRS. The only time that it is too late to fix a mistake is when your return is in the mail. You want to make sure that your tax return is mistake free.

• Report All of Your Income - Do not forget to report all of your income. Do you have a part-time job that you work from home? If so, you need to report this as additional income. It may not sound fair, but it is the law.

• More Tax Deductions for Business Owner or Self-Employed - If you run your own business, or are self-employed, there will be many more deductions available to you. They include everything from office expenses to health insurance premiums and more. Ask your tax advisor which expenses you can deduct.