Latest Email Scam Using Irs Name Moving To A New Location Tax Information A Cpa For Taxes Does It Make A Difference Various Ford And Mercury Hybrids Get Tax Credit Certification From Irs Small Business Tax Deduction Write Off Bad Debts
If you have an email account, and who doesn’t, you are use to receiving scam emails. Well, here is one using the IRS name to watch out for over the next few months.
Latest Email Scam Using IRS Name
No matter how hot it is outside, nothing sends a chill down a person’s back like the prospect of receiving a notice from the IRS.In truth, most of the notices these days are fairly bland, either an indication you owe a bit more in tax or are due a refund that you otherwise were unaware of. Regardless, most people will open such notices because nobody wants to blow off the IRS. That can only lead to trouble down the line.
Email scam artist focus their efforts on trying to get gullible people to respond to their various nefarious efforts. Obviously, they have realized that most people are sensitive to communications from the IRS. In email terms, this means people will more likely than not open the emails to at least read them. In a number of instances, unwise individuals will actually respond to the alleged IRS communication. Given this scenario, it is surprising that there aren’t more scam emails coming out using the IRS name.
The latest scam going around involves the electronic tax payment system. The system was setup by the IRS to allow people to pay taxes online, which is convenient. Frankly, it has been a smashing success. Alas, the scammers have figured out a way to use it to their benefit.
The scam works like this. You get an email from the “Antifraud” division of the IRS. The email states that someone has tried to you a tax number assigned to you and deposited cash in the account. The IRS has then frozen the money, but you can get it back by clicking on the provided link. The page that pops up then asks you to verify your identity by providing a lot of sensitive personal information the scammer can use to steal your identity. Yes, we are talking identity theft here.
If you know anything about the IRS, the scam is a bit ambitious. First, there is no “Antifraud” division at the IRS. Second, the IRS never sends email to taxpayers, not even during an audit. NEVER! Third, why would someone steal a tax identification number and then deposit money to the IRS using it? Criminals are stupid, but come on!
Here is the simple rule you should keep in mind to avoid this and all other scam emails using the IRS name. They are ALL frauds. The IRS never sends email to taxpayers. Let me repeat that. The IRS never sends email to taxpayers. Anything you receive in your inbox that purports to be from the IRS is not legitimate. Learn it, live it, love it!
In modern America, it is rare to find a person or family living in the same place for thirty years. Most of us move five or ten times, which means taxes become an issue.
Moving To A New Location – Tax Information
I hate moving. Absolutely loathe it. I am sure you do as well. Nonetheless, you, me and everyone seem to move all the time. Whether we are buying and selling real estate or just getting a new start in a new location, there are lots of little things we have to get in order. While utilities and cable are first on the list of things to handle, most people fail to pay close attention to tax issues and miss out on some juicy deductions.
If you are moving, you are inevitably going to dish out some cash for movers, a truck, boxes, gas, hospital visits, aspirin, more aspirin and so on. Fortunately, these expenses may be deductible on your next tax return. There are three tests you have to meet.
Initially, you have to be starting work at a new job location. Many misunderstand this requirement to mean that you have to already have a job when you move and that is the reason for the move. This is incorrect. You must simply find a new job once you have moved.
The second requirement deals with timing issues. Assuming you are going to start a new job, you must actually start within a prescribed time. This time period is a year from the date of the move. This should be relatively easy to comply with as the lack of a new job within a year probably will mean you have returned to your old job and location.
The third test is known as the distance test. The IRS calls this the closely related in place test. Essentially, you have to be able to show the distance from your new residence to your new job is smaller than the distance from your previous residence to the new job. Your new job location must also be at least 50 miles from your old one. This should be pretty simple for most people to show. If you can’t meet this test, you can get around it by claiming the commute is easier and cheaper than your old one.
If you meet these tests, you can claim some nice deductions. They include travel expenses and all moving expenses reasonably related to the move including 30 days of storage. Sorry, but you don’t get to deduct hotel stays and food. Regardless, you can claim the deductions on form 3903. Just attach it to your 1040 when you file.
If you’re not sure whether you have a simple tax return you can do yourself or you wonder about missing significant tax advantages or are concerned that you might be making mistakes, use the checklist below from the American Institute of Certified Public Accountants to help you decide whether you should hire a certified public accountant to help you prepare your tax return.
You may want to consult with a CPA if you:
• Bought or sold a home. You’ll want to take all allowable deductions and make certain you qualify for the personal residence exclusion.
• Got married, divorced or your spouse died. Only a competent tax professional can guide you through the complex tax rules that pertain to assets passing through estates.
• Had a baby or adopted a child. A CPA can explain in plain English the sometimes dumbfounding array of investment options for saving for a child’s college education, as well as details about the child credit, child care credit and earned income credit.
• Have a retirement plan, such as an IRA, 401(k), Keogh plan, a pension or an annuity.
• Recently bought or started a business, own a business or work from home. A CPA can advise you on whether you should operate as a corporation, partnership or sole proprietorship.
• Acquired rental property or have rental income. A CPA understands the complex tax rules that apply.
• Have needs for estate planning and need to understand all the ramifications of property taxes.
Like your doctor, your tax preparer knows a lot about your personal situation, so continuity of service is also an important factor. That’s why, for many individuals, choosing a CPA is the right choice.
CPAs are college-educated, licensed professionals certified by the states in which they practice. They have passed a rigorous licensing exam and are required to adhere to strict ethics standards, as well as to stay current with evolving tax laws and regulations. They are not part-timers who took a crash course in a few basic tax rules, operating out of a storefront. Finally, if a dispute arises about your tax return, only CPAs, attorneys or enrolled agents are authorized to represent you before the IRS.
Starting in 2006, individuals buying hybrid cars will get a tax credit instead of a tax deduction. The IRS has just started to kick out the exact amounts you can claim for your new hybrid.
Various Ford and Mercury Hybrids Get Tax Credit Certification From IRS
Under the Energy Policy Act of 2005, the tax benefits of owning a hybrid vehicle underwent significant changes. Whereas you could previously claim a tax deduction, the new law converted the deduction into a tax credit. Tax credits are FAR more valuable than deductions, because they reduce the amount of tax you owe on a dollar for dollar basis. Tax Deductions, on the other hand, merely reduce your adjusted gross income prior to determining the amount of tax you owe pursuant to the tax tables. In laymen’s terms, this conversion is a very good thing.
Not every hybrid car qualifies for a tax credit. The Internal Revenue Service must first evaluate it and then issue guidance on which cars qualify and the size of the credit you can claim for each. The maximum the IRS can designate per car is $3,400. Here are the numbers it recently kicked out for various Ford and Mercury hybrid models.
2006 Ford Escape Hybrid Front WD: $2,600
2006 Ford Escape Hybrid 4 WD: $1,950
2006 Mercury Mariner Hybrid 4 WD: $1,950
If you purchased your hybrid car prior to 2006, you are restricted to claiming a tax deduction in the amount previously designated by the IRS, usually $2,000. If you waited until 2006, you can claim the above amounts with a few hitches. First, the amount only applies to the first 60,000 cars sold for each model. If you purchase a hybrid in the 60,0001 to 120,000 sales range, you can claim only half of the tax credit. Sales 120,001 through 180,000 can claim on a quarter of the amount designated above. Exactly how you are supposed to know the sales figures is a bit murky, but Ford and Mercury will undoubtedly take steps to make it clear.
Hybrid vehicles make sense from an environmental aspect. Throw in significant savings on gas costs and a large tax credit, and they should fly off the lots.
Practically every small business has receivables that it cannot obtain from clients. If your small business doesn’t have any such receivables, consider yourself lucky. For those small businesses that suffer from uncollected receivables, solace can be taken from the fact you can claim a tax deduction.
Bad Debt Tax Deduction
A small business can write-off bad debt losses if it meets nominal requirements. To claim such a tax deduction, the following must be shown:
A. The existence of a legal relationship between the small business and debtor;
B. The receivables are worthless; and
C. The small business suffered an actual loss.
Proving there is a legal relationship between the small business and debtor is fairly simple. You must simply show that the debtor has a legal obligation to make a payment. Most businesses issue invoices or sign contracts with debtors and these documents suffice to prove the legal relationship. If you are not putting your business relationships in writing, you should begin doing so immediately.
Proving receivables are worthless is slightly more complex. A small business is required to show that the debt has become both worthless and will remain so. You must also show that you took reasonable steps to collect the receivables, but you are not necessarily required to go to court to meet this requirement. A clear example where you would meet this requirement is if the debtor filed bankruptcy.
While proving that you suffered a loss may sound like the easiest requirement to meet, the issue is a bit more complicated. The Tax Code defines the loss as an amount that is included in your books as income, but is never collected. A classic example of such a situation would be a manufacturer that provides products to retailers on credit. The manufacturer can show a real loss if the retailer files bankruptcy. Unfortunately, there is almost no way to claim a loss if you provide hourly services and use a cash accounting method. The IRS does not consider the expenditure of time and effort to be a sustained economic loss.
Small businesses suffer all to often from uncollected receivables. If you failed to claim such losses as a tax deduction during your last three tax filing years, you should file amended tax returns to get a refund..
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