Filing Sales Tax Return – How to Spot a Scammer

This may sound crazy, tax frauds and scammers are still active. You have stuffed your tax information in a closet and now you need not worry about the tax. However, identity theft can make you go through all these files and documents again. Therefore, it is always better to learn how to spot a scammer.

Is the person at your door really an IRS guy?

IRS representatives usually do not visit taxpayers. This is very rare but possible. And, scammers know that sometimes IRS representatives knock doors of tax payers. A scammer at your door will ask for immediate payment. The scammer may also threaten to bring the police. However, real IRS representatives never ask for immediate payment. Moreover, they never threaten to call local police. An IRS representative will provide you with two forms of official credentials including an HSPD-12 card and a pocket commission. HSPD-12 is a government-wide standard for secure and reliable ID for federal employees and contractors. Moreover, you also possess the right to see these credentials.

Is the mail you have received actually from the IRS?

The IRS sends letters to tax payers for many reasons. Whenever the IRS has any issue, it sends written notice to tax payers. This notice explains the issue and also provides the address, phone number and other details of agencies involved in this. The IRS does not use aggressive threatening language in letters. Therefore, always check the validity of the letter. Contact the IRS office if you receive a mail claimed to be from IRS.

Is the phone call you have received from the IRS?

There is an easy way spot a fraud caller. The IRS never calls you or sends an email or text to ask for personal information for verification. The IRS finds physical letters through mail more secure and reliable. Therefore, IRS sends letters. If you have received any phone call, email or text, ignore it.

Follow a simple rule of thumb. Whenever you are contacted by anyone claiming to be from IRS, be it a phone call, text or an email and you have not received any letter from IRS then it is a scam. Always visit local IRS office for the validation of the letter you have received from IRS.

Filing sales tax return online minimizes the risk for identity theft and other scams. It does not matter whether you are filing sales tax return on your own or you are taking professional help, be careful and stay away from scammers.

2 Important Tax Breaks Every College Student Needs To Know About

With the fee of college continuing to rise, many students struggle to pay their tuition bills and loans.

The cost of colleges keeps rising higher and students have to take the help of their parents for college expenses. Fortunately, IRS is there to offer some relief from high tuition. There are several tax deductions and credits available to college students that can help pay for educational expenses.

Whether you are hiring some local tax services in California or doing on your own, in this blog post, we are sharing two main tax breaks available for students which help in educational expenses.

Tax credit

There are mainly two important tax credits for college students. The American Opportunity Tax Credit (AOTC) (which was formerly known as Hope Credit), and the Lifestyle Learning Credit (LLC). The prior is only available for the first four years of higher education, whereas the later has no limit to the number of years, so it can be applied to any professional degree course.

The AOTC provides a maximum credit of $2500 per student. The credit equal to 100% of the first $2,000 you spend on qualified education, plus 25% of the next $2,000. This total $2500 credit is also refundable up to $1000 that means you could also qualify to get up to, $1000 as a refund. The LLC pays a maximum credit of $2,000 per student, but it’s not a refundable credit. You will not be liable to get anything extra after credit covers the tax liability.

Even if you are eligible for both AOTC and LLC, you have the option to choose one only. So consider all the important factor related to your education and choose that work best for you. Choose the one which will benefit you more. To claim a credit, you have to be enrolled and paying qualified educational expense like fees, book, and supplies.  In general, the American Opportunity Credit provides a bigger benefit as compare to lifestyle learning credit.

Tax deduction

The other type of tax break is the tax deduction for tuition and fees. In this, you’re allowed to reduce your income by up to $4,000 in college expenses as per your income. The good thing about tax deduction is that you don’t have to itemise to take advantages since it counts as an adjustment to your income. You can qualify for this if your filing status is other than married filing separately. Besides that, you can’t take the tax deduction for tuition and fees if someone else can claim you as a dependent.

The reason some people go for tuition and fees deduction because it has a higher income threshold than the LLC, which makes it available to more taxpayers. Again, though, you have to choose whether to go for tuition and fees deduction or one of the two education credits. The credit usually provides more tax benefits but there are times when the tax deduction can come in handy. 

The 5 Best Ways To Make Your 2017 Tax Season Wonderful

2016 is about to complete, and you believe or not 2017 tax season is nearly here. Are you wondering how to settle up your 2016 tax return? “Don’t worry, be happy”, because Tax Care is going to share some tips to prepare for the 2017 tax season.

Before filling out your tax return, it is important to pay attention to some important things. First, think about getting organized. Whether it’s a file folder or a large envelope, it’s imperative to have all tax information at one place. A lot of information is required and every detail counts in making tax preparation a smooth process. Have a look at some other tips for tax filing season:

1. Get the best out of your retirement plan: If you want to live a happy and comfortable life after retirement, make every effort to maximize retirement plan contribution. If your employer offers a 401 (k) or other types of deferred pension plan, try to get the maximum amount allowable. If you don’t give much attention to it, you are leaving money on the table that could benefit you in your retirement.

If your employer does not provide a retirement plan, then it’s better to contribute to a traditional individual retirement account or Roth IRA. The both plans offer tax-deferred gains.

2. Be smart while filling your tax: If you want to receive your refunds quickly and easily, the best way to file your return electronically and use direct deposit. If you want to know how to prepare your taxes online, there are a number of tax professionals who can help you. If you owe money, use IRS direct pay from your saving or checking accounts. Don’t forget to keep a copy of your filed tax returns. It saves your time and effort when filling your tax return.

3. Protect your identity: There are several kinds of tax fraud that can provide harm to your tax preparation. If you received IP PIN (identity protection PIN), in the past, then you must provide this PIN on all your future tax returns. An IP PIN is a six digit number assigned to every eligible taxpayer that helps you to protect from fraudulent returns from being filed under your Social Security Number.  It’s the IP PIN which helps you to file your tax return smoothly. However, IP PIN changes every year, so you will have to get a new in 2017. You will get an email for this, if you don’t receive, get it from IRS website.

                                                                                                 

4.  Adjust your withholding: If you are expecting a large refund, then check your year-to-date withholding and changing the taxes withheld. It especially becomes important when you claim the earned income tax credit or the additional child tax credit. This is important because now IRS required by law to hold all refunds on those return until Feb 15. The new law came into existence to allow the agency additional time to prevent and detect tax fraud.

5. Be kind without tax consequence: From past many years, the IRS changes the yearly exclusion for gifts that you can give without having to file a gift tax return. If you give a gift (cash, property) of more than $14K to anyone, you must report this on form 709. If you are married, you can give a combined $28K and remain under the radar.

If you are also going to file the tax return in this new season, Tax Care can help you to do a perfect tax preparation. Just come up with your problem and we will provide all the solution to your tax needs. Our services include tax preparation, bookkeeping, sales tax, online payroll services in Concord.

Roles and Responsibilities of an Accountant, Bookkeeper and CPA

Accountant, bookkeeper and CPA are the most common words appear on your screen when you search for bookkeeping or any other financial services. This creates a perception in the minds of people and makes them believe that these words are interchangeable. They wrongly believe that these three words represent one general financial professional. However, an accountant, bookkeeper and CPA have different roles to play. This differentiation helps you in determining whether you should hire a bookkeeping services company in California or an accountant or a CPA.

Role of an Accountant 

An accountant analyzes and verifies financial information. Preparing financial statements and advising executives about the impact of a financial decision on the business is the job of an accountant. Here are the other tasks performed by an accountant.

•        Adjusting and determining wages of employees

•        Creating allowances for uncollected accounts

•        Preparing balance sheets, tax returns, cash flows, income and other statements

•        Verifying financial information

•        Preparing and analyzing audits        

•        Overseeing bookkeeper’s work.

Role of a Bookkeeper  

A bookkeeper performs financial data entry roles. He records day-to-day transaction of a company. A bookkeeper

•        Processes payroll information

•        Records vendor bills

•        Creates sales invoice

•        Sends invoices to vendors and statements to customers

•        Updates information in financial software

•        Creates a trial balance by keeping track of credits and debits

•        Ensures that employee has submitted correct paperwork for payroll

•        Follow up on invoices

•        Balances and records subsidiaries, ledgers and other records

 Role of a CPA

CPA Stands For Certified Public Accountant. A CPA needs a degree in accounting and an extensive training. There are some regulations regarding ongoing education and experience before appearing for the Uniform Certified Public Accountant Examination. Though rules about CPAs vary from state to state, but in general, a CPA must have the required education and certification. Moreover, a CPA also has to renew his certificate every two years.

As compared to an accountant and a bookkeeper, a CPA has to take more responsibilities and obligations. Overseeing and auditing the financial information of the company is the primary job of a CPA. Apart from this, a CPA also works with accountants and bookkeepers of an organization. A CPA handles various tasks associated with auditing, tax preparation and more.

Now it is clear that a CPA and an accountant can file a tax return for you. In case you do not know how to file your taxes online, you should look for an experienced tax preparer in Brentwood.