Another strong warning from the IRS is alerting taxpayers to phone scams that have already resulted in 90,000 complaints and the theft of millions of dollars. Here’s how the typical scam works: The caller claims to be from the IRS and, using hostile and abusive language, demands immediate payment of taxes by a prepaid debit card or wire transfer. The...
Tags: IRS Phone Scams
Category: Taxes
Many mutual fund companies allow you to switch funds without a penalty or commission, as long as you stay within their family of funds. There’s a catch though. Unless the funds are in a tax-deferred retirement account, you could owe income tax each time you make a switch. When you move money between funds, the IRS considers it a sale....
Tags: mutual funds
Category: Taxes
It’s difficult enough to think about taxes under normal circumstances. Finding yourself amid a divorce action can make this task even more daunting. A little planning, however, may ease this burden. Consider, for example, the following ideas about your tax filing status if your divorce isn’t final by December 31, 2014. Advantages of filing a joint tax return. It is...
You can reverse a 2013 Roth conversion if you act by October 15, 2014. If you converted a regular IRA to a Roth IRA in 2013 and now want to switch back to a regular IRA, you have until October 15, 2014, to do so without penalty. The IRS calls reversing the transaction a “recharacterization.” A recharacterized conversion is treated...
Tags: Roth IRS conversion
Category: Taxes
Do you live with a disability, or care for someone who does? If so, you may have disability-specific tax questions about income, deductions, and credits. Here’s an overview. * Income. In general, all income is taxable on your federal tax return, unless specifically excluded. For instance, income you earn for services is typically taxable, even if you are disabled. Part...
Tags: disability
Category: Taxes
In a recent income statistics bulletin, the IRS reported that the alternative minimum tax (AMT) affected a record 4.25 million tax returns and collected $30.48 billion in taxes during tax year 2011. The AMT was created years ago to ensure that high-income taxpayers could not escape all taxes through the use of deductions and credits. The recent report indicated that...
An important tax deadline is approaching for business owners. If you’re self-employed or own a small business and don’t currently have a retirement plan in place, consider setting up a SIMPLE plan (Savings Incentive Match Plan for Employees). These plans are limited to employers with 100 or fewer employees. A SIMPLE may be structured either as an IRA or 401(k)...
Tags: Simple IRA
Category: Taxes
The Internal Revenue Service and the Treasury Inspector General for Tax Administration continue to hear from taxpayers who have received unsolicited calls from individuals demanding payment while fraudulently claiming to be from the IRS. It is important for taxpayers to know that the IRS: •Never asks for credit card, debit card or prepaid card information over the telephone. •Never insists...
Tags: IRS Phone Scams
Category: Taxes