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3 Things The IRS Won’t Tell You While Filing Your Taxes

 

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We’ve officially entered the tax filing season. The IRS offers a lot of excellent information online at www.IRS.gov to help you get your 1040 filed accurately and on time. That said, there are 3 things the IRS won’t tell you.

  • It can be risky to “go it alone.” The tax code is so complicated these days, it’s often wise to hire a tax preparer to help you. This is especially true if you have lots of stock transactions, are self employed or run a side business. There are also some good software tax preparation packages available and some are now online as well.
  • It doesn’t matter how much or how little your income, you could be audited. The number of audits has been down in recent years, but being a low income earner doesn’t mean you won’t be audited. It is especially important to keep receipts for charitable donations, because the IRS flags returns with a lot of deductions for giving.
  • The IRS benefits from our anxiety. People often fear making a mistake, so they overpay on purpose. A few years ago, the Government Accountability Office found that over 2 million people overpay each year by an average of nearly $500. That’s almost a billion dollars a year in overpayments?

So, consider getting help unless you’re very good at preparing your taxes. It’s not just about being audited. A tax professional might save you a lot of money by catching deductions and credits that you may miss.

And don’t forget, the Bible encourages us to pay all the taxes we owe. So, always be completely honest when reporting your income and tax deductions.

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Good News if You’re Struggling to Pay Your Income Tax!

April 15! With the April 15th deadline for filing income tax returns right around the corner, it can be a really stressful time—especially if you don’t have the money to pay your taxes.

If that’s your situation, we’ve got encouraging news. The IRS has created what they call the FRESH START INITIATIVE which is designed to help taxpayers who owe taxes, but can’t pay them now. Here are the highlights from this initiative that might really help you:

  • For some unemployed taxpayers, the IRS will wave failure-to-pay penalties
  • The IRS will enter into payment plans for those who can’t pay and owe up to $50,000
  • For some that the IRS believes will not be able to pay, even in installments, they will offer to compromise the amount due

The IRS has developed a series of short videos, titled “Owe Taxes?” that does a good job of explaining the Fresh Start Initiative. To learn more click on the link below:

http://www.irs.gov/uac/Newsroom/IRS-Fresh-Start-Program-Helps-Taxpayers-Who-Owe-the-IRS

 

Remember, anytime you are stressed out or anxious about your taxes,  God’s word provides a solution. Philippians 4:6 tells us what we are to do: “Be anxious for nothing, but in everything by prayer and supplication with thanksgiving let your requests be made to God.” And once we have prayed with thanksgiving telling the Lord our request, we have this amazing promise in the next verse: “And the peace of God, which surpasses all understanding, shall guard your hearts and minds in Christ Jesus.”

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A surefire way to prevent identity thieves from getting your tax refund

What do 3 out of 4 Americans have in common this time of year? And no, it’s not waiting to see who’ll be eliminated from American Idol. The vast majority of us expect to receive a refund from the IRS. The problem is— way too many won’t be getting a check from Uncle Sam any time soon. The reason? Identity theft!

The Federal Trade Commission says a quarter of all identity theft complaints now involve fake tax returns, and with the average return around $3,000, it’s no wonder thieves have moved in. With just a little of your personal information, identity thieves can easily file a false return and steal your refund, especially with electronic filing and direct deposit refunds.

Your first clue will be a letter from the IRS saying more than one return was filed with your social security number. Then, you’ll have to prove to the IRS that your identity was stolen and that you’re still due a refund. And believe it or not that could take up to a year and a half.

Fortunately, there’s an easy way you can prevent identity thieves from intercepting your tax refund— don’t get one! Simply reduce your withholdings to bring your tax liability as close to zero as possible. If you don’t get a refund, thieves can’t steal it.

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Tax Refund Tips for You to Follow

People are starting to file their 2014 taxes, and Uncle Sam will soon send out millions of checks. It’s astounding that the average federal tax refund is around $3,000. Why do folks give interest free loans to the government in the form of over-withholding?

There are several reasons:  Some folks are afraid of the IRS and don’t want to owe them anything.  Others look at a big refund as “free” money, or a windfall.  While some realize that they’re not good savers, and they view this as an effective way to force themselves to save.

Using the refund as a means of forcing yourself to save is a legitimate reason to over-withhold. But if you’re afraid to owe the IRS even a penny or you’re wanting to blow a windfall, it’s actually poor stewardship. You can put that money to better use than the government by using the withholding throughout the year to pay down those high interest rate credit cards or to beef up your saving or give to the work of Christ.

Ideally, you want to get back very little from the IRS, and now’s the time to make changes to accomplish this. First, adjust your withholding so that the minimum necessary amount is taken out to cover your tax liability. The IRS has an excellent Website. Go to www.irs.gov   and download Publication 919 for help on calculating the right amount to withhold.

Then, plan ahead. Are there things that will lower your tax liability next year by providing more credits and deductions? Having a child, buying a house with a mortgage, investing in a retirement account, and giving more to your church and ministries may all reduce your tax bite.

Or are there things that will increase your tax bill, such as, withdrawing money from a tax-deferred retirement plan or one of your children leaving the nest to become self-supporting. You’ll need more withheld from your paycheck if any of those things happen.

Listen to the Compass radio programs MoneyWise and HeyHoward to learn what God says about handling money.

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Taxes the IRS won’t tell you about

We’ve officially entered the 2014 tax filing season. The IRS offers a lot of excellent information online at www.IRS.gov to help you get your 1040 filed accurately and on time. That said, there are 3 things the IRS won’t tell you.

  • It can be risky to “go it alone.” The tax code is so complicated these days, it’s often wise to hire a tax preparer to help you. This is especially true if you have lots of stock transactions, are self employed or run a side business. There are also some good software tax preparation packages available and some are now online as well.
  • It doesn’t matter how much or how little your income, you could be audited. The number of audits has been down in recent years, but being a low income earner doesn’t mean you won’t be audited. It is especially important to keep receipts for charitable donations, because the IRS flags returns with a lot of deductions for giving.
  • The IRS benefits from our anxiety. People often fear making a mistake, so they overpay on purpose. A few years ago, the Government Accountability Office found that over 2 million people overpay each year by an average of nearly $500. That’s almost a billion dollars a year in overpayments?

So, consider getting help unless you’re very good at preparing your taxes. It’s not just about being audited. A tax professional might save you a lot of money by catching deductions and credits that you may miss.

And don’t forget, the Bible encourages us to pay all the taxes we owe. So, always be completely honest when reporting your income and tax deductions.

Warmly in Christ,

Howard Dayton