Choosing a bad tax preparer could be devastating. Missing deductions or credits, erroneous positions, blown filing deadlines and bad advice are some of the potential downside to picking the wrong person to prepare your tax return. Here are a few tips on qualities to look for in your tax preparer.
Most charities realize that individuals are more apt to make a donation towards the end of the tax year than ealier in the year. Factor in the holidays and even more reason to think that Americans will be generous at year end.
If you receive a notice from the Internal Revenue Service, you must answer the notice within a specific time. Failure to respond could result in an assessment and more expensive to unwind.
Many taxpayers will have gambling winnings. Be advised that these winnings cannot be ignored and there are specific ways to report the winnings and the dreaded losses. Winnings that are not reported may come back as a surprise when the IRS issues a matching report.
Identity theft is a common problem in our society and has become an epidemic in the field of tax preparation. If you are a victim of identity theft, don't blame the preparer. Do follow these steps if you are a victim of identity theft.
A Bank might be forgiving but the IRS is not. When a debt is forgiven or lowered, there might be a reportable income event with such forgiveness. Our US tax system treats this as income required to be reported in the year the debt was forgiven or modified. There are a few narrow exceptions but failure to report this type of income could cause major havoc a few years later.
Your unemployment benefits may not be much but you can be assured that they are subject to income tax. Many elect to have no withholding on the unemployment benefits. Don't be surprised if your refund is small or there is a balance due. Here are a few tips regarding the taxability of the unemployment benefits.
Credits are the good guys of the tax code. Think of the IRS giving you money for a particular set of circumstances. If you are legally entitled to a credit, you want to take the credit. Here are some common instances of credits that are available to a taxpayer.
Determining your filing status seems like a simple task. There are times when slight changes in your circumstances may require you to evaluate whether you have the correct filing status. Many facts can change your filing status such as divorce, marriage, death of a spouse or having a qualified person living in your household.
For many taxpayers, a good tax preparation software is all one needs. No complexity or issues. However, if you are unsure or have issues that above and beyond your knowledge, it is best to rely on a professional. Remember that the responsibility for the return is on the taxpayer.