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Posts tagged: IRS

IRS warns seniors of tax refund scam

The Internal Revenue Service is warning senior citizens and other taxpayers to beware of an emerging federal tax refund scam tempting victims to file tax returns claiming fraudulent refunds.

Bogus refund claims have been identified across the nation. These schemes carry a common theme of promising refunds to people who have little or no income and who normally are not required to file a federal income tax return, the IRS says.

Promoters falsely claim they can obtain a tax refund or nonexistent stimulus payment for their victims based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college, the agency says.

Typically, con artists falsely claim that refunds are available even if the victim never went to college, or attended decades ago. In many cases, scammers are targeting seniors, people with very low incomes and members of church congregations with false promises of free money.

IRS offers tax tips for military members

There are some tax rules exclusive to the military, and the IRS wants to remind active duty and reserves of them so they can maximize their returns:

Moving expenses: active-duty military can deduct “reasonable, unreimbursed” moving expenses incurred because of a change of station.

Combat pay: Monthly pay for enlisted persons and warrant officers is untaxed if they served in a combat zone that month.

Travel to reserve duty: Members of the Reserves can deduct unreimbursed travel expenses for traveling more than 100 miles from home to perform reserve duties.

For a full list of military tax tips, visit http://www.irs.gov/newsroom/article/0,,id=210896,00.html

You may not have to pay taxes

“May” being the operative word — but it got your attention. 

The IRS is launching a big push to make sure people know about the earned income tax credit. It's one of the sweetest tax deals around, because it's refundable, meaning the IRS could be in the position of sending you money.

Some 426,000 Washington state taxpayers used the tax credit last year, but the IRS estimates one in five of taxpayers eligible don't use the credit because they don't know about it.

The income limit to qualify starts at $13,660 for a single person with no kids, and tops out at $49,078 for a married couple who files jointly and has three or more kids.

Couple of things to keep in mind: the tax credit doesn't affect welfare benefits. And in most cases, any payment you get won't count against you in determining eligibility for Medicaid, SSI, food stamps, low-income housing or TANF payments.

How do you get it? You have to file a tax return. The IRS has a worksheet to see whether you qualify and for how much; you can find Publication 596 on the IRS website here.There are also thousands of places you can get free tax preparation through the VITA program. Call 1-800-906-9887 for a list.

How will the new medical insurance law affect small business W2 reporting?

Business owners no doubt saw today's announcement that medical insurance costs are jumping a scary 9 percent compared with a year ago.

Those news reports say health-insurance premiums paid by employers  will keep going up, with the average annual cost of family coverage topping $15,000.

Some of that increase, anticipated last year, come from the arrival of new medical insurance coverage requirements that come from the Obama Health Care plan.

The premium increase for the previous year was a more manageable 3 percent.

For businesses not sure how the law affects their health plans for workers, the IRS is offering a free webinar on reporting health care coverage on W2 forms.

The free webinar is Oct. 31 starting at 11 a.m. It will explain what employers and workers need to know about the law, including changes in W2s, different reporting requirements for benefits, and different valuation methods for reporting benefits.

To register for the webinar, go to this IRS page.

About 42 percent of tax refunds will go to bolster savings

With tonight's tax deadline just six hours away, we looked about to see what people are saying they'll do with any refunds they get back from the government.

A recent survey by the National Retail Association found 42 percent said they will use refund dollars to pay down debt. Another 42 percent (which may overlap with the first 42 percent) say they will bolster savings accounts.

Only 13 percent, the Grasshopper Constituency, say they'll use the bucks to splurge on something.

We noticed, not surprisingly, that Allstate Insurance came up with a set of recommendations for refund money.

Sent by email, the suggestions include the big surprise — buying life insurance. OK, that makes sense, if you haven't done so already.

What else did Allstate think was a good idea:

  • Set up an emergency savings fund. The recommendation includes keeping enough money stashed away to cover six months to one year of unemployment.
  • Contribute to or open an IRA. Yes, the market is unstable. But pulling out of a retirement plan altogether is not the answer. Both traditional and Roth IRAs are great ways to save for retirement, although each offers different advantages. If you’re employed and have an IRA, continue contributing. If you’ve become unemployed, you might want to do a rollover from your retirement plan to a qualified IRA
  • Purchase a CD. If you don’t need immediate access to your funds, you may benefit from the fixed interest rates available with a Certificate of Deposit. You can buy a CD with a maturity or holding period as short as 30 days or as long as five years.

Agents raid business suspected in Ponzi scheme

Washington state troopers and agents with the Internal Revenue Service raided the Spokane offices today of Team Spirit America, which has been fined by state regulators for operating what clients have alleged in court is a Ponzi scheme.

The troopers and IRS agents, identified with their uniforms as being part of the Criminal Investigative Division, seized a Mercedes car outside the office, at 1801 W. Broadway Ave.

None of the persons involved in the raid was immediately available for comment.

But just last month, the Washington Department of Financial Institutions announced that it was seeking a $150,000 fine from Colbert resident Doris Nelson, who is manager of Little Loan Shoppe and several other related entities. Nelson manages Team Spirit America, which has taken over affairs for Little Loan Shoppe, according to newspaper archives.

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