Posts Tagged "Tax"

Know the IRS’s “Dirty Dozen” tax scams

Posted on Apr 4, 2018

Every year the IRS releases its “Dirty Dozen” list of the year’s most prevalent tax scams. They include ploys to steal personal information, talk people out of money, or engage in questionable tax activity. Here are some of the top scams: Phishing. Fake emails or websites claiming to represent the IRS, for the purpose of stealing personal information. The IRS will never try to contact you via email about a bill or refund. Phone scams. Scammers impersonating IRS agents over the phone. These impersonators may threaten you with arrest if you don’t make immediate payment for fake tax bills. Don’t fall for it – the real IRS makes contact via a letter, and never threatens or demands immediate payment. Identity theft. Using a stolen Social Security number to file a fraudulent return and claim a refund. The IRS said it is making great progress on reducing this scam as identity theft reports are down 40 percent from a year ago. Fake charities. Some fraudsters use the mask of charitable activity to get you to donate funds to fake organizations. Only donate to legitimate charities, which are listed in the IRS database. Inflated refund claims. Many taxpayers are wooed by tax-refund services offering payouts that seem too good to be true. Cheap tax-preparation services that promise unrealistic refunds are illegal and often get taxpayers in trouble. Padded deductions. The IRS is focusing on identifying tax returns that try to reduce tax by overstating deductions such as charitable deductions or business expenses. Falsifying income to claim credits. Improper use of the Earned Income Tax Credit (EITC), meant for eligible low-income taxpayers. The IRS has been cracking down on EITC fraud in recent years. Abusive tax shelters. Some fraudsters peddle complex tax avoidance schemes known as tax shelters that they portray as legal tax strategies. Make sure you get an independent opinion on any complex tax schemes. Frivolous tax arguments. Frivolous arguments to avoid paying taxes (for example, arguing a personal vacation is a business expense) can be penalized by up to $5,000 per tax return. Offshore tax avoidance. Using offshore bank accounts and complex international tax structures to avoid paying taxes is still a common scam on the radar of IRS auditors. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

Read More

Here’s a roundup of your nontaxable income

Posted on Mar 30, 2018

There are several sources of revenue that are not subject to income tax. Do you know what they are? Here are the most common sources of money that are generally not taxed on your federal income tax return: Borrowed money, such as from banks or personal loans Money received as a gift or inheritance from family or friends Money paid on your behalf directly to a school or medical facility Most life insurance proceeds Child support payments Money you receive for sustaining an injury Scholarships for tuition and books Disability insurance benefits from a policy purchased with after-tax dollars Interest received on municipal bonds If you would like assistance in determining what to include on your income tax return, please contact us. We are here to help you. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

Read More

Staying organized at tax time

Posted on Mar 28, 2018

Organizing your tax records not only makes filing your tax return easier, it also helps you find the financial documents you need throughout the year. Whether you’ve already filed your tax return or are about to, here are some tips to get organized. Go with the flow (of your tax return) Try organizing your records in the same order as they are required to fill out your 1040 individual tax return, using these categories: Income. Copies of W-2s, 1099s, Social Security statements, interest income and investment income. Charitable donations. Charitable donation receipts, separated by cash and noncash contributions. Include a copy of your charitable activity mileage log, if you have one. Medical and dental. All documents related to medical expenses. You may also include a note calculating your medical deduction threshold (which is 7.5 percent of your adjusted gross income during 2017 and 2018). Other itemized deductions. Proof of all other itemized deductions, including state and local tax statements, mortgage interest, casualty and theft losses, unreimbursed business expenses and other miscellaneous itemized deductions. Note that miscellaneous itemized deductions are eliminated after the 2017 tax year, but keep any records for this tax season on file. Business and hobby activity. Keep separate records for each hobby and business activity. Include records of related investments, expenses and mileage logs. Education. Records of all education expenses, including invoices, tuition, materials (including for things such as books or musical instruments) and fees. Investments. Records of investments in tax-advantaged retirement accounts, as well as contributions to investable accounts such as health savings accounts (HSAs) and 529 education savings plans. Also include records of capital gains and losses, particularly for tax-loss harvesting purposes. Odds and ends. Put all the miscellaneous receipts that don’t fit anywhere else into this file. Depending on your situation, you may be able to get tax breaks for a variety of expenses. Bonus tips: How long should you keep your records? For tax filings, the IRS requires you to keep your records on hand for at least three years after you file. Some states require you to keep records longer than that, and the federal government can ask you to keep records for six years if you understate your income. Keep track by going digital. If keeping track of your tax records year after year sounds like a chore, at least things are easier in the digital age. You can scan your paper records and keep them digitally, but remember to keep your records backed up and secure from identity theft. Make a checklist. If you’re still waiting for some tax forms to arrive, go back to last year’s return and make a checklist of all the forms you received. Add items for any new accounts or vendors you added since then, and check off the forms as they arrive. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

Read More

A new twist on scams this tax season

Posted on Mar 9, 2018

The IRS urges taxpayers to beware of fake calls to return money from tax return refund checks that have been deposited in error into bank accounts. Scammers either pretend to be collection agency employees or use a recorded message threatening people to return the refund. These scammers have already filed fraudulent tax returns and used the taxpayers’ real bank accounts for the deposit. If you get a call from someone claiming to be an IRS agent or collections agency employee asking for money, review the situation before you take action. Read the IRS’s Taxpayer Guide to Identity Theft, and contact your tax preparer right away. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

Read More

Are you a caregiver? These tax breaks may be helpful

Posted on Mar 5, 2018

Those who care for people who are sick, elderly or disabled are often up against a lot of challenges. Fortunately, there may be a handful of tax breaks that can help. They include the medical expense deduction, the Child and Dependent Care Credit, and the new family credit in the Tax Cuts and Jobs Act. Give us a call if you have questions. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and...

Read More