Email scams

Let’s say you get an email from the IRS requesting your reply to the email with your social security number or other important information. Because it is from the IRS, you don’t want to ignore their request.  You comply and provide them with the information they have requested.

This is an email scam. The scammer created this legitimate looking email with official looking logos, and everything that the IRS would include in an email.

Phishing

Again, let’s say you get an email saying it is from the IRS. They ask you to log into your account and re-enter your payment information where you make your online installment payments. So, the page you usually go to in order to make your payment looks like the website you always go to and you follow the instructions given you from the email. You feel good you were able to comply with the request made by the IRS in a timely manner and you hit the “submit” button.

But do you know what really happened?

What happened is you were phished. The email you received looked like it was from the IRS, the link in the email led you to a page that looked like an IRS page, and you entered your financial information. A phishing email page looks legitimate, but it is not. These pages are “spoofed” pages, more or less duplicated from the real page. But a close look at the address bar will show that the address is not what the address would be for the legitimate page. Unfortunately, most people will not notice the address discrepancy unless they are aware of the difference.

The truth

The IRS is NEVER going to request personal information over the Internet. They are not going to send you an email that asks you to enter financial information. They are also not going to ask you for your social security number via email request. The Internet is wide-open and your personal information will never be put at risk by the IRS in such a way. If the IRS needs information from you, they will send you a letter asking for what they need and how you can provide that information to them. The IRS always corresponds via postal mail. It is your responsibility to provide them with the information they request either by mail or by calling them. All of this is done for the safety of your personal information.

If you are ever receive this type of email, you can contact the IRS at phishing@irs.gov and report the email. It is important the IRS knows when email scams or phishing emails pop up so they can work to shut them down.

The problem lies in new withholding tables issued by the IRS, which would cause taxpayers to get hundreds of dollars more than they are entitled to under the credit.  This is money that will have to be repaid at tax time.

Taxpayers affected by this problem include married couples in which both people work, taxpayers with more than one job, retirees who have income taxes withheld from their pension plans, and Social Security recipients with jobs providing taxable income.

What should you do?  Check your federal withholding to make sure you have enough taxes being taken out.  If you are married and both you and your spouse work, you might consider having taxes withheld at the higher single filer rate.  If you are currently working two jobs, you might consider having one of your employers withhold more taxes.  You can do this by requesting a W-4 from your employer.

Not sure if your taxes are being withheld properly?  You can use the IRS’ online withholding calculator at www.irs.gov.

1.    Contact your employer. If you have not received your Form W-2, contact your employer to inquire if and when the W-2 was mailed.  If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address.  After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

2.    Contact the IRS. If you still do not receive your W-2 by February 17th, contact the IRS for assistance at 800-829-1040. When you call, have the following information:

• Employer’s name, address, city, and state, including zip code;
• Your name, address, city and state, including zip code, and Social Security number; and
• An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3.    File your return. You still must file your tax return on time even if you do not receive your Form W-2. If you have not received your Form W-2 by February 17th, and have completed steps 1 and 2 above, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible.  There may be a delay in any refund due while the information is verified.

4.    File a Form 1040X. On occasion, you may receive your missing documents at a later date and some may have conflicting information. You may receive a Form W-2 or W-2C (corrected form) after you filed your return using Form 4852, and the information differs from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Form 4852, Form 1040X, and instructions are available on the IRS Web site, www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).

• File your tax return electronically. This will be much quicker than using the paper forms and mailing them to the IRS.
• Include all of the required Social Security numbers for each person listed on your tax return. This includes yourself, your spouse, your children or dependents and anyone listed in order to claim the Child and Dependent Care Credit or Earned Income Tax Credit.
• Go through and double-check all of the numbers and figures on your return. Don’t just fill it out and assume it’s correct. Mistakes are easy to make, especially when you are facing a filing deadline.
• If you are using a paper tax form, make sure you sign it where required. And if you are filing with a spouse, make sure your spouse also signs the return where required. If you paid someone to prepare the return for you, that person must also sign the return.
• Don’t forget to attach all required schedules/payments to your return. If you are sending a payment with your return, make the check out to “United States Treasury” and enclose it with the tax return or Form 1040-V, Payment Voucher. Include on your check, the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.
• Send your return or your request for an extension by the April 15^th deadline. Just remember, if you are filing for an extension, that is an extension to file your return and not an extension to pay what you owe.

For more helpful information, you can visit the IRS website at www.irs.gov.

Whether you are filing an individual or business return, you can use EFTPS to make payments on the Internet or by phone. You can make your 1040 quarterly Estimated Tax Payments or even corporate, excise and employment taxes using EFTPS.

You can even schedule these payments up to 365 days in advance for individuals and 120 days for businesses. What this means is that you can avoid missing important deadlines which could result in costly penalties. These scheduled payments can also be canceled up to two business days before the scheduled payment due date.

And this service is available 24 hours a day, seven days a week.

To enroll in EFTPS, simply go to www.eftps.gov. After you enroll, you will receive confirmation by mail. You will also receive an EFTPS Personal Identification Number with instructions for activating your enrollment.

For more information, visit www.eftps.gov or call EFTPS Customer Service at 1-800-555-4477.

• Have a sound business plan in place.
• Be sure to keep your personal and business banking accounts completely separate. Do not co-mingle funds.
• Meet with professionals in the field you are considering. They may be able to offer you advice and guidance on the best way to run your business.
• Invest the necessary time to launch your business.

If you are not sure which category you fall under remember that an activity is considered a business if it is profitable for three out of five years.  A tax professional can assist you in preparing your returns if necessary.

The Hope Credit applies for the first two years of post-secondary education. It can be worth up to $1,650 per student, per year. A credit of 100 percent of the first $1,100 of qualified tuition and related fees paid by the student is eligible during the tax year, plus 50 percent of the next $1,100. And the student must be enrolled at least halftime for at least one academic period which began during the year.

The Lifetime Learning Credit applies regardless of the number of years the student is in the post-secondary program. This credit equals 20 percent of the first $10,000 of tuition and fees paid by the student during the year.
However, a student cannot claim both the Hope and Lifetime Learning Credits for the same year. The credits can be claimed by the parent or the student, but not both. And students who are claimed as a dependent cannot claim the credit.
For more information, you can visit www.irs.gov and look up Publication 970, Tax Benefits for Education.