Ilyce Glink's Blog

Welcome to Ilyce Glink's blog! Here you'll find Ilyce's latest insights on personal finance advice, real estate advice and consumer issues. Come back often for timely and interesting posts on a wide variety of topics.

IRS Announces 2009 Mileage Rates

Labels: 2009, auto mileage, IRS, tax deduction

posted by Melanie G. Rogers at 11:53 AM 0 comments

IRS Changes Deductions for Tax Year 2009

Earlier this month the U.S. Internal Revenue Service announced tax changes effective for tax year 2009 (so for tax returns filed in early 2010).

Personally, I think some of these would have been nice to use for this tax year, but perhaps one should be grateful for the breaks one gets.

Here they are:

- The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.

- The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.

- Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.

- The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.

- The annual gift exclusion rises to $13,000, up from $12,000 in 2008.

Labels: IRS, Tax, tax deduction

posted by Melanie G. Rogers at 12:21 PM 1 comments

Got an E-mail from the IRS? It's Probably Fake

Apparently scammers are at it again. The U.S. Internal Revenue Service announced yesterday that scammers posing as the IRS are sending fraudulent e-mails to people.

The IRS reminds us that they generally don't contact taxpayers using e-mail.

In May and June people reported more than 700 phishing scams to the IRS. The total for 2008 is 1,600. Thieves ask for your personal information like bank account numbers in a phishing e-mail. Once they have it, they use it to steal your financial identity.

Want to learn more about Phishing? Check out Ilyce's Phishing video:


"Taxpayers should take steps to keep their personal information out of the hands of identity thieves," said IRS Commissioner Doug Shulman. "That includes not falling for any of the phony e-mails or faxes now in circulation pretending to come from the IRS."

The two most common scams currently are a tax refund scam and an economic stimulus scam. In the tax refund scam you get an e-mail saying to respond so that you can get your tax refund. The only way to get a tax refund is to file a tax return, according to the IRS.

In the economic stimulus scam, the e-mail says you're eligible for a stimulus payment and to click here to fill out a form. Again you can only get your stimulus payment after filing a tax return.

If you have tax questions visit http://www.irs.gov/ - don't click any links out of e-mails. And if an e-mail sounds too good to be true it probably is.

Labels: e-mail, IRS, Phishing, Scams

posted by Melanie G. Rogers at 2:38 PM 1 comments

IRS Raises Mileage Rate to 58.5 Cents Per Mile

Labels: auto, auto mileage, Cars, IRS, tax deduction

posted by Melanie G. Rogers at 9:27 AM 1 comments

How Are You Spending Your Stimulus Check

Labels: IRS, rebate, WSB

posted by Ilyce Glink at 10:29 AM 2 comments

Con artists after your IRS rebate check

Labels: IRS, Scams, Tax

posted by Ilyce Glink at 2:41 PM 0 comments

File your taxes on time, even if you can't afford to pay

Labels: IRS, loans, Tax

posted by Ilyce Glink at 3:37 PM 0 comments

IRS Wants to Ensure Armed Forces Get Stimulus Payment

Labels: IRS, military, Rebates, Tax

posted by Ilyce Glink at 3:13 PM 0 comments

IRS Announces Biggest Tax Scams

The United States Internal Revenue Service (IRS) announced the 12 biggest tax scams for 2008. They are:

1. Phishing
2. Scams related to the economic stimulus package
3. Frivolous arguments
4. Fuel tax credit scams
5. Hiding income offshore
6. Abusive retirement plans
7. Zero wages
8. False claims for refund and requests for abatement
9. Return preparer fraud
10. Disguised corporate ownership
11. Misuse of trusts
12. Abuse of charitable organizations and deductions

Remember the IRS will not call you asking for personal information. And if it sounds too good to be true it probably is.

For more information please visit Ilyce's forum, headings Tax and Scams.

Melanie

Labels: IRS, Phishing, Retirement Money, Tax

posted by Ilyce Glink at 11:11 AM 0 comments

Don't Forget These Tax Deductions

Here's a list of deductions that people may overlook when filing their taxes.

1. Out-of-pocket expenses relating to charitable activities, including the standard mileage deduction
2. Medical transportation, including standard mileage deduction and lodging expenses incurred for medical reasons while away from home
3. Legal fees incurred in connection with obtaining or collecting alimony
4. Gambling losses to the extent of gambling gains
5. Costs associated with looking for a new job in your present occupation, including fees for resume preparation and employment of outplacement agencies
6. Contraceptives, if bought with a prescription
7. Commissions and closing costs on sale of property
8. Seller-paid points on the purchase of a home
9. Education expenses to the extent required by law or your employer or needed to maintain or improve your skills
10. Mortgage pre-payment penalties and late fees

Source: J.K. Lasser

Labels: IRS, Tax, tax deduction

posted by Ilyce Glink at 1:38 PM 0 comments

How to Pick the Right Tax Preparer

More than half of the 120 million U.S. taxpayers hired a tax preparer last year, according to the Chicago Better Business Bureau. And not all of them were happy with the results.

About 19 percent of consumers complained about billing and another 19.5 percent complained that their tax preparer was unresponsive. Seven percent complained that the company was rude and 6 percent said they did not get their refund.

The most egregious? More than 6 percent had tax preparers who never filed their taxes at all!

You're responsible when there's a mistake - not your tax preparer - so pay attention.

What can you do? Be really careful in who you hire to do your taxes. And follow these tips from the BBB:

-Ask around. Get referrals from friends and family on who they use, and check the BBB Reliability Report on tax preparation services free-of-charge at http://www.bbb.org/.

-Look for credentials. Ideally, tax preparers should either be a certified public accountant, a tax attorney, or an enrolled agent. All three can represent taxpayers before the IRS in all matters, including an audit. Note that enrolled agents have extra training. Also, find out if the preparer is affiliated with a professional organization that holds its members to a code of ethics.

-Don't fall for the promise of a big refund. Be wary of any tax preparation service that promises larger refunds than the competition, and avoid any tax preparers who base their fee on a percentage of the amount of the refund. (And don't get a refund anticipation loan - waiting 10 days to get an electronic refund is worth it to save fees and hefty interest.)

-Think about accessibility. Many tax preparation services only set up shop for the months leading up to April 15. In case the IRS finds errors, or in case of an audit, consumers need to be able to contact their tax preparer throughout the year.

-Read the contract and know what you're paying for. Consumers must read tax preparation service contracts closely to ensure they understand issues such as how much the service costs, how the cost will be affected if preparation is more complicated and time consuming than expected, and whether the tax preparer will represent the consumer in case of an audit.

Some other helpful Web sites are:
National Association of Enrolled Agents - go to the section for taxpayers http://www.naea.org/MemberPortal/
American Institute of Certified Public Accountants - consumer information section - http://www.aicpa.org/Consumer+Information/Find+a+CPA/

Melanie G. Rogers

ThinkGlink.com

Labels: BBB, CPA, enrolled agents, IRS, Tax, tax preparer

posted by Ilyce Glink at 9:08 AM 0 comments

IRS Announces 1031 Exchange Safe Harbor for Personal Use

If you own rental property and want to sell it to buy other property, you may want to consider a 1031 exchange. It allows you to not pay taxes because it treats your sale and purchase as an exchange rather than a sale. There are certain rules and requirements that have to be followed, such as the exchange must occur within a certain time period.


The U.S. Internal Revenue Service has recently given property owners some leeway in how they use their properties, according to Nationwide Exchange Services in Chicago. Owners may make personal use of the properties for 14 days or up to 10 percent of the time of the 12 months before sale and still do a 1031 exchange.


For more information visit Ilyce's forum and look under Personal Finance/Tax.


Melanie G. Rogers
ThinkGlink.com

Labels: 1031 Exchange, IRS, Nationwide Exchange Services

posted by Ilyce Glink at 3:59 PM 0 comments

How Do I Get My Rebate?

President Bush just signed the stimulus package that authorizes the U.S. Internal Revenue Service to send every taxpayer $600 to $1200 (couples).

To get a rebate all you have to do is file your 2007 taxes. There are no special forms required. Here's more info from the IRS:

The IRS will use information on the 2007 tax return filed by the taxpayer to determine eligibility and calculate the amount of the stimulus payments.

The IRS will begin sending taxpayers their payments in early May after the current tax season concludes. Payments to more than 130 million taxpayers will continue over several weeks during the spring and summer. A payment schedule for taxpayers will be announced in the near future.

Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Taxpayers who have already filed with direct deposit won't need to do anything else to receive the stimulus payment. For taxpayers who haven't filed their 2007 returns yet, the IRS reminds them that direct deposit is the fastest way to get both regular refunds and stimulus payments.

Most taxpayers just need to file a 2007 tax return as usual. No other action, extra form or call is necessary. This Web site will be the best information source for all updates and taxpayer questions.

In most cases, the payment will equal the amount of tax liability on the tax return, with a maximum amount of $600 for individuals ($1,200 for taxpayers who file a joint return).

The law also allows for payments for select taxpayers who have no tax liability, such as low-income workers or those who receive Social Security benefits or veterans' disability compensation, pension or survivors' benefits received from the Department of Veterans Affairs in 2007. These taxpayers will be eligible to receive a payment of $300 ($600 on a joint return) if they had at least $3,000 of qualifying income.

Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans' benefits and earned income, such as income from wages, salaries, tips and self-employment. While these people may not be normally required to file a tax return because they do not meet the filing requirement, the IRS emphasizes they must file a 2007 return in order to receive a payment.

Recipients of Social Security, certain Railroad Retirement and certain veterans' benefits should report their 2007 benefits on Line 14a of Form 1040A or Line 20a of Form 1040. Taxpayers who already have filed but failed to report these benefits can file an amended return by using Form 1040X. The IRS is working with the Social Security Administration and Department of Veterans Affairs to ensure that recipients are aware of this issue.

"Some people receiving Social Security and veterans' benefits may not realize they will need to file a tax return to get the stimulus payment," Stiff said. "To reach these people, the IRS and Treasury will work closely with the Department of Veterans Affairs, the Social Security Administration and key beneficiary groups on outreach efforts."

Eligible taxpayers who qualify for a payment will receive an additional $300 for each child who qualifies for the child tax credit.

Payments to higher income taxpayers will be reduced by 5 percent of the amount of adjusted gross income above $75,000 for individuals and $150,000 for those filing jointly.

Taxpayers must have valid Social Security Numbers to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security Number. And, children must have valid Social Security Numbers to be eligible as qualifying children.

Taxpayers who file their tax returns using an Individual Taxpayer Identification Number issued by the IRS or any number issued by the IRS are ineligible. Also ineligible are individuals who can be claimed as dependents on someone else's return, or taxpayers who file Form 1040-NR, 1040-PR or 1040-SS.

To accommodate taxpayers who file tax returns later in the year, the IRS will continue sending payments until December 31, 2008. The IRS also cautions taxpayers that if they file their 2007 tax return and then move their residence that they should file a change of address card with the U.S. Postal Service.

The IRS will mail two informational notices to taxpayers advising them of the stimulus payments. However, taxpayers should be alert for tax rebate scams such as telephone calls or e-mails claiming to be from the IRS and asking for sensitive financial information. The IRS will not call or e-mail taxpayers about these payments nor will it ask for financial information. Scam e-mails and information about scam calls should be forwarded to phishing@irs.gov.

Labels: IRS, President Bush, rebate, Tax

posted by Ilyce Glink at 3:47 PM 1 comments

Not Paying Taxes on Principle Does Not Fly

The U.S. Internal Revenue Service continues to gear up for tax season. Today they released the top four reasons that people give for not paying their taxes:

* Misinterpretation of the 9th Amendment to the U.S. Constitution regarding objections to military spending.

• *Erroneous claims that taxes are owed only by persons with a fiduciary relationship to the United States or the IRS.

*A nonexistent "Mariner's Tax Deduction" (or the like) related to invalid deductions for meals.

*Certain instances of misuse or excessive use of the section 6421 fuels credit.

In 2006 the IRS increased the penalty to $5000 from $500 for tax returns which cite one of these reasons.

For more information check out this Web site: http://www.irs.gov/taxpros/article/0,,id=159853,00.html

While one can make a lot of jokes about tax season, it's not funny if you have to pay a big penalty.

Melanie G. Rogers

ThinkGlink.com

Labels: energy, IRS, Tax

posted by Ilyce Glink at 3:30 PM 1 comments

How to File Taxes For Free Online

Labels: IRS, Tax, tax preparer

posted by Ilyce Glink at 2:10 PM 0 comments

Debating Whether to Have an Accountant Do Your Taxes?

Labels: accountant, IRS, Tax, tax preparer

posted by Ilyce Glink at 10:55 AM 0 comments

IRS Increases Business Mileage Reimbursement Rate

Labels: Business, Cars, IRS, Tax

posted by Ilyce Glink at 1:30 PM 0 comments

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