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.