Hot answers tagged

84

For people that don't earn very much, the largest single financial event of the year is often getting a large tax refund thanks to the Earned Income Credit and the Child Tax Credit. These refundable credits can result in people getting refunds for thousands more than what they had withheld over the year. This makes fraudulently claiming dependents ...


79

I would respond to your friend this way: "Either you are planning to do something illegal, in which case I don't want to be involved, or you are planning to do something legal, in which case you don't need me." Here's Why: What your friend proposes is completely pointless because if the money is legally his to give to you, then it's perfectly legal for your ...


75

What they're charging you $30 for is the ability to get your refund sooner. If you don't want to pay for that ability, then maybe it's time for you to learn to do taxes the old fashioned way (kinda). Hit the IRS website http://www.irs.gov/ and download Form 1040, 1040A or 1040EZ and the accompanying instructions. They are all PDF files which have been ...


67

This sounds like a scam. The IRS sends notices of amounts due, they don't enlist 3rd party services for that. The IRS does make use of 4 different 3rd party collection agencies: CBE - P.O. Box 2217 Waterloo, IA 50704; 1-800-910-5837 ConServe - P.O. Box 307 Fairport, NY 14450-0307 1-844-853-4875 Performant - P.O. Box 9045 Pleasanton CA ...


64

It is very helpful to understand that Free File is not actually "by" the US Internal Revenue Service (IRS). The IRS does indeed offer access to the program through their website, but Free File is actually a public-private partnership program operated and maintained by the Free File Alliance. Who is the Free File Alliance? Well, according to their members ...


58

Of the options you've listed, setting up a payment plan with the IRS is the best, cheapest option. The current interest rate from the IRS is 6%. This interest rate is updated once every three months based on the federal short term rate. The penalty charged is an additional 0.25% per month (roughly another additional 3% per year). This works out to a rate ...


41

You explained nicely in your own answer how to report and react to this obvious scam. Let me explain why it is an obvious scam by explaining how the IRS works when you owe them something. When you know how the IRS works - these robocalls will just become an amusing (or annoying) nuisance, nothing more. The IRS never ever initiates contact via phone calls, ...


40

There could be a few reasons for this, my first guess is that you didn't report the distribution on your return (indicated on line 15 of your 1040, pictured below), the IRS got a copy of the 1099-R, and assumes it's all taxable (or maybe the 1099-R indicates the full amount is taxable). If a 1099-R doesn't have an amount populated for 'taxable amount' it ...


38

During the partial shutdown of the US Federal government, the IRS will continue to collect tax and process income tax returns, but refunds will not be paid out until the shutdown has ended. There have been numerous articles written on this subject - I am linking to one here. Google will give you many more. MarketWatch - 3 unfortunate ways the ...


37

If your adjusted gross income (AGI) is over $66k, you don't qualify for the free tax filing software anymore, per the IRS Free File site (link). Some options: Pay for tax preparation software Use the tax preparation software on a relative or friend's machine, but don't e-file - print out your return and mail it in. (Note: Some software packages may have ...


36

My advice is to stop worrying about it. File your taxes normally as you have done in previous years. If someone files a fraudulent return electronically in your name, you will find out when you try to e-file yourself, as the system will not let you e-file twice. At that time, you can contact the IRS, who will tell you to mail your return in along with Form ...


34

You're getting confused between several different things. 10K - cash transactions over $10,000 are reported to FinCEN under BSA. This is to prevent money laundering. IRS - IRS wants to see your tax return with all your income reported there. They don't see your bank deposits unless they audit you. 1 and 2 are not related at all.


31

You say that you inherited the money from your mother, and are now paying these people using money that is already yours. Because of that, the money is considered a gift from you to them, and the fact that you are doing it in accordance with your mother's wishes doesn't change that. For it to be considered a bequest from your mother's estate directly to ...


31

Last year you deducted all of the state tax that was withheld from your paycheck in 2016 off of your income. But then you did your 2016 state income tax return, and the state sent you some of that money back. Because you deducted it last year and then got a refund, your state income tax refund is taxable by the federal government and must be added in to ...


28

Congratulations on your raise! Is my employer allowed to impose their own limit on my contributions that's different from the IRS limit? No. Is it something they can limit at will, or are they required to allow me to contribute up to the IRS limit? The employer cannot limit you, you can contribute up to the IRS limit. Your mistake is in thinking ...


27

Replace goats with a foreign currency, or in fact any product with a market value, and it becomes self evident. As far as your Tax office is concerned it's the dollar value at that point in time. This is why if you do carry out work which gets paid in other currencies you need to record the exchange rate / value in home currency at the point of exchange. ...


26

Free File is not software by the IRS. Free File is actually a partnership between the IRS and the Free File Alliance, a group of tax software companies. The software companies have all agreed to provide a free version of their tax software for low-income taxpayers. According to the Free File Alliance FAQ, the Alliance was formed in 2002 as part of a ...


26

No. Regular W2 employees cannot deduct housing or transportation costs related to their employment. However, in the US, many employers offer Parking and/or Transit FSA programs which are usually collectively referred to a Commuter Benefits FSA programs, this is particularly common among larger employers with locations in major metropolitan cities. Under ...


26

Should I hire a tax person to represent me? Or go in myself? I'm just afraid of saying the wrong stuff. I can't tell you whether or not you should hire someone, but here are some things you should consider: Penalties/Interest: After an audit, if you owe additional tax you'll pay 0.5% per month up to 25% of owed amount in penalties and will also pay ...


22

Talk to an accountant who practices tax accounting, not a income-tax filing service such as H&R Block, making sure that the accountant is at least an Enrolled Agent (EA) with the IRS. You might owe back taxes plus interest plus penalties (yes, there is a penalty for failure to file a tax return even if you do not owe the IRS any money and even are due a ...


22

Contractors regularly deposit checks like this; if the income is legitimate don't worry. Report it to the IRS as income whether or not the customer issues you a 1099. With deposits like this you should be making quarterly payments to the IRS for your projected income.


22

Do the following to get to a human. No need to wait for the bot to talk, just press the key once you hear the bots say something so you can get to a real person quickly.. When they ask for SS#, just press the pound key twice. Intuit's website has this advice: Call the IRS: 1-800-829-1040 hours 7 AM - 7 PM local time Monday-Friday When calling ...


21

Try using the IRS tool - Where's My Refund. You could also create and check your tax account or request an account transcript online or via mail. These will show you if they have sent the check and when they did. If they have sent it and it is just floating around in space or someone else has cashed it - you will need to go through their refund trace ...


21

There's an annual contribution limit, for 2019 it is $3,500 single/$7,000 family. Otherwise, it's fine to match future contributions to prior or planned qualifying expenses so long as the account was established before the expenses were incurred. There is no deadline for reimbursement, so if you have the procedure done now and pay out of pocket, you can ...


20

Contact the IRS to see if your return has been filed. If you can, try to obtain information on your CPA prior to calling, like the PTIN, CAF (if any), CPA number, etc. It may be in other documents you've gotten from the CPA - particularly previously filed IRS documents. The IRS has a process and form for complaints against CPAs and preparers. I would be ...


19

As long as she starts school before April, 2017, you can still deduct it for 2016 even though she didn't become a student until 2017. (And in fact you should because you can't deduct it in 2017.) This exact scenario is described in publication 970 chapter 6: Prepaid expenses. Qualified education expenses paid in 2015 for an academic period that begins in ...


19

The first thing to do is verify that this is not a scam and that you really do owe the IRS money. Contact them. If the debt is legitimate and you can't get your lawyer to respond, contact the authorities. Contact the local bar association to see what recourse is available in your state: Every state has an agency responsible for licensing and ...


18

They are correct in asking for a W9 because you are their vendor (not an employee). They will issue you a 1099 at the end of the year and you need to report the income on your tax return. It's very normal. If you really want to avoid giving them your Social Security Number you can apply for an EIN (Employer Identification Number). Then you would put your ...


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