Don’t Get Caught up in a Tax Return Scam!

It’s tax season, and while that may mean you’re drowning in forms and paperwork, for scammers it means millions of taxpayers they can potentially dupe out of refunds or scare into making irrational moves. Here’s what you need to know about tax return scams and how to avoid them. 

How the scams play out

In a tax return scam, a fraudster steals a taxpayer’s personal information and files a fake tax return on their behalf. The scammer will direct the refund to be deposited into the taxpayer’s checking account. After the refund is deposited, the scammer will call the victim, impersonating the IRS and claiming the refund was mistakenly inflated. They’ll instruct the victim to return the alleged extra funds via gift card or wire transfer. Of course, this money will go directly into the scammer’s pockets. 

In another variation of a tax return scam, a fraudster steals a taxpayer’s personal information and files a fake tax return on their behalf, as described in the first scenario. However, instead of directing the refund to be deposited into the victim’s account, the scammer has the funds deposited into their own account. When the taxpayer tries to file a legitimate return, the IRS will inform them they’ve already filed one – and collected the refund.

Unfortunately, tax return scams are relatively easy to pull off. Scammers need only to get their hands onto a victim’s name, Social Security number and date of birth. All other information, including income and employment details, can be fabricated. Often, scammers get the information they need for the scam from employees who work at the same company as the target and are willing to sell information about their co-workers to fraudsters.

Protect yourself

Fortunately, there are steps you can take to limit your vulnerability to tax return scams. Here’s how to keep your money and your information safe this tax season: 

  • File early. This gives scammers less time to use stolen information. 
  • E-file with care. Only use a secure computer to file an electronic tax return. Do not use public Wi-Fi to e-file your taxes. 
  • Keep your tax returns in a secure location. Remove your returns from your computer after you’ve filed, and store hard copies of all tax forms in a safe place. 
  • Never download links or attachments from unverified sources. These may contain malware, which can infect your computer and deliver your information right into the scammer’s hands. 
  • Never share personal information with an unknown contact over the phone or online. Personal information should always be kept personal. 

It’s also important to be aware of the following information to help you identify possible scams:

  • Refund checks will never be deposited into a taxpayer’s account if they have not filed taxes. If a refund lands in your checking account and you know you haven’t yet filed taxes, you are likely the victim of a tax return scam. 
  • The IRS never demands payment by a specific method. If you’re asked to wire money to the “IRS” or pay by gift card, you’re talking to a scammer. 

If you’ve been targeted

If you receive a phone call or letter from someone claiming to represent the IRS and informing you that you owe tax money, you can verify the claim by calling 1-800-829-1040. Emails allegedly sent by the IRS are scams, as the IRS does not reach out to taxpayers via email. 

If you haven’t received your tax refund within one month of filing, you can check your refund’s status on the IRS webpage. If the site shows that your refund was issued but you haven’t received it, you may be the victim of a tax return scam and identity theft. Alert the IRS at 1-800-908-4490.

Stay alert this tax season, and stay safe! 

Your Turn: Have you been targeted by a tax return scam? Tell us about it in the comments.

Beware Tax Filing Scams

It’s tax season, so it’s time to get your paperwork in order and hire a tax preparer. Unfortunately, though, there are thousands of scammers looking to steal your information and your tax refund by posing as authentic tax preparers. It’s important to learn how to recognize the signs of a fraudulent tax preparer so you don’t fall victim to a tax filing scam. Here’s all you need to know about these scams and how to keep your money and your information safe.

How the scam plays out 

In a tax filing scam, a victim hires an alleged tax preparer to do their taxes. They may be pulled in by the nominal fee the “preparer” is charging, or lured by the scammer’s extensive advertising which makes a frequent appearance on their social media platforms and on websites they often visit. Or, they may be tempted by the large return the “preparer” promises to secure for them.

The victim then shares their information with the supposed tax preparer without suspecting anything is unusual. Unfortunately, though, when the scammer has the taxpayer’s information, they’ll use it to file a tax return in the victim’s name while changing important details, such as a checking account number or mailing address. They’ll swap in their own information and collect the victim’s refund. By the time the victim realizes what’s happened, they’ve lost the money owed to them by the IRS and are at risk of falling prey to identity theft. 

Protect yourself

The best way to stay safe from a tax filing scam is to do your research carefully before hiring a tax preparer. 

First, avoid pop-up ads when choosing a tax preparer, especially those riddled with typos and spelling errors and those that market their services aggressively. Research any preparers you consider hiring by asking for references of previous clients, Googling the name of the preparer and/or their agency and looking for a physical address and phone number on their website. Be suspicious, as well, if they promise a large return without knowing the first detail about your finances.

Second, before hiring an individual or an agency to do your taxes, ask to see their Preparer Tax Identification Number (PTIN). Every legitimate tax preparer must have one of these federally issued identification numbers. If the “preparer” refuses to share their PTIN, you’re being scammed. 

Finally, if you’ve already hired a preparer but you are harboring some doubt about their authenticity, look for these red flags that can prove your suspicions are likely on-target:

  • The preparer inflates numbers that directly affect your tax liability, such as charity donations and business-related expenses. 
  • The preparer claims ineligible individuals as your dependents. 
  • The preparer asks you to sign a blank or partially completed form while promising to fill out the remainder after you sign. 
  • The preparer refuses to sign your form.

 If your tax preparer follows any or all of the above practices, terminate your relationship with them immediately.

If you’ve been targeted

If you’ve been targeted by a tax filing scam and you’ve only recognized that you were being scammed after your form has already been filed, report it to the authorities as quickly as possible. Let the FTC know about the scam, alert the IRS and tell your friends and family about the circulating scam, too.

If you’ve shared your personal information with the scammer, take some additional steps toward protecting yourself from further implications of the scam. For example, if you’ve shared your financial information with the scammer, such as your checking account details, you’re best off closing your account and opening a new one. Also, if the scammer knows your Social Security number, you are now vulnerable to identity theft. Check out the federal government’s page on identity theft recovery to learn what steps to take next. 

Stay alert during tax season and keep your money and your information safe!

Your Turn: Have you been targeted by a tax filing scam? Tell us about it in the comments. 

What are the Tax Benefits of Owning a Home

Q: I’m in the market for my first home, and I’m trying to get a complete picture of how owning a home will affect my finances. What are the tax benefits of owning a home?  

A: Owning a home can provide you with significant tax benefits. It’s important to learn how home ownership can impact your taxes so you know which home-related expenses to claim on your returns for maximizing your savings potential. 

Before we explore the specifics, let’s review how an income tax deduction works. A deduction reduces your taxable income by a percentage, which depends on your tax bracket. You can choose to take the standard deduction ($12,550 for individuals filing as single taxpayers, or $25,100 for married couples filing jointly) or to itemize your deductions, which involves listing each eligible deduction separately. After adding up the total of your itemized deductions, you’ll multiply that amount by your tax bracket for your total deduction. 

With this understanding, let’s take a deeper look at the tax benefits of owning a home. 

Tax benefits of buying a home

Purchasing a home offers the buyer several tax benefits. 

First, with the exception of very large loans, you can generally deduct the cost of the points you paid when securing your mortgage. If you’ve refinanced your original mortgage and paid points when taking out your new loan, the cost of these points can be deducted as well. 

Second, if you are an active-duty member of the armed services, you may be able to deduct your moving expenses from your taxable income. However, this tax perk is limited to active servicepeople who need to move because of a permanent change of station due to a military order. 

Tax benefits of owning a home  

There are multiple ongoing tax benefits to owning a home:

  • Mortgage interest deduction. Most homeowners can deduct the interest payments they make on their mortgage from their taxable income. There may be limits on how much you can deduct, which is dependent on how large your loan is. 
  • Real estate taxes. The money you pay in property taxes is deductible from your taxable income. If you pay through a lender escrow account, you’ll find the tax amount on your 1098 form. If you pay your taxes directly to your municipality, use your personal records, such as a copy of a check or automatic transfer, as proof. 
  • Private mortgage insurance (PMI). If you took out a loan that was equal to less than 20% of the home’s value, you may be able to deduct your PMI payments from your taxable income. This deduction depends on your adjusted gross income (AGI): If you’re single and your AGI is less than $50,000, you’re eligible for the PMI deduction. For married couples filing jointly, the threshold is $100,000. Once you’ve reached the max income allowed for the PMI deduction, the amount you can deduct begins to phase out.  
  • Home equity debt. If you’ve taken out a home equity loan or home equity line of credit against your home, the interest payments on these loans can be deducted from your taxable income, as long as the loan is used, in the words of the IRS, “to buy, build or substantially improve the taxpayer’s home that secures the loan.”
  • Home office expenses. If you use a part of your home exclusively for work purposes, you may be able to deduct related expenses.

Are there any tax credits available for homeowners? 

Unlike a tax deduction, a tax credit directly lowers your tax bill, dollar for dollar. You may be eligible for a mortgage credit if you were issued a qualified Mortgage Credit Certificate (MCC) by a state or local governmental unit or agency under a qualified MCC program. In addition, depending on your home state, you may be able to claim a credit for a percentage of the costs of buying and installing items that help your home harness renewable energy, such as solar panels or geothermal heat pumps. 

Home ownership comes with many advantages, some of which include tax benefits. Keep that in mind as you explore your options, and as with all tax advice, please remember to consult a tax professional for the most current and accurate laws.

Your Turn: How has home ownership benefitted your taxes? Tell us about it in the comments. 

How to Adult: Personal Finance for the Real World

Title: How to Adult: Personal Finance for the Real World

Author: Jake Cousineau

Paperback: 235 pages

Publisher: Independently published

Publishing date: March 23, 2021

Who is this book for? 

  • High school graduates, college students and any other young adult who needs to prepare for the financial realities of adulthood.
  • Young adults who’ve made money mistakes due to a lack of financial education and want to learn how to better handle their money in the future.

What’s inside this book?

  • A clear, easy-to-understand explanation of financial topics, like compound interest, mutual funds, insurance deductibles, Roth IRAs and more.
  • Practical examples and real-life anecdotes to bring financial lessons home.
  • Hands-on tools to help readers jump-start their financial journeys.
  • A “Build Your Skills” section at the end of each chapter inviting readers to test their knowledge and retention of the chapter’s material.

5 lessons you’ll learn from this book: 

  1. The foundational concepts of personal finance and building wealth.
  2. How to avoid costly financial missteps.
  3. How to budget, save and invest your money wisely.
  4. How taxes and insurance work.
  5. How to prepare for life’s big expenses.

3 questions this book will answer for you:

  1. What are the financial basics I need to know to make it in the real world?
  2. How can I avoid making money mistakes as a young adult?
  3. Can I learn about finances without breaking my brain over complicated jargon and complex concepts?

What people are saying about this book:

  • “This! This is what I needed when I was in high school. It is also what I needed when I was in college, and when I bought my first car, and when I bought my first house, and when I opened my first credit card. Every high school student in America should have to pass a class that uses this book. The real-world examples are relatable and make the reader feel like they are armed with the knowledge they need. It doesn’t just make you book smart. It makes you street smart.” — Stukent Personal Finance
  • “In How to Adult, Jake Cousineau engages readers using a blend of storytelling, analogies, charts and research to deliver key financial lessons. Whether it’s comparing index funds to sports teams, or interest to pineapple on pizza, Jake has a gift in delivering financial advice in a way that will educate adults, young and old alike!” — NGPF Personal Finance
  • “The author does an excellent job of explaining complex concepts in clear terms using common language. I learned something new about taxes despite having filed them for the past 15 years. Clever and approachable. Highly recommend.” — Zach G

 Your Turn: What did you think of How to Adult? Share your opinion in the comments.

Learn More:
amazon.com
thefishow.com

Beware Stimulus and Tax Scams

It’s stimulus season and tax season at once, and scammers couldn’t be happier. They know that taxpayers are eager to get their hands on their stimulus payments and tax refunds. As consumers are working to file their taxes before the May 17 deadline, all that paperwork and payments mean people may be letting their guard down. For a scammer, nothing could be better!

The IRS is warning of a surge in scams as the tax agency continues processing tax returns and distributing stimulus payments to eligible adults who have not yet received them. Here’s all you need to know about the latest round of stimulus and tax scams:

How the scams play out

In the most recent IRS-related scams, scammers will con victims into filing phony tax returns, steal tax refunds or stimulus payments or impersonate the IRS to get victims to sign documents or share personal information, such as Social Security numbers or checking account numbers. The scams are pulled off via email, text message or phone. Sometimes, victims will be directed to another (bogus) website where their device will be infected with malware. Other times, the victim receives a 1099-G tax form for unemployment benefits they never claimed or received, because someone has filed for unemployment under their name. Unfortunately, the losses incurred through most of these scams can be difficult or impossible to recover.

What you need to know

As always, information is your best protection against these scams. Here’s what you need to know about the IRS, the stimulus payments and tax returns:

The IRS will never initiate contact by phone or email. If there is an issue with your taxes or stimulus payment, the agency will first communicate via mail.
There is no “processing fee” you need to pay before you can receive your stimulus payment or tax refund.
The IRS is not sending out text messages about the stimulus payments. If you receive a text message claiming you have a pending stimulus payment, it’s from a scammer.

There is no need to take any action to receive your stimulus payment. Likewise, aside from filing your tax return, there is nothing additional you need to do to receive your tax refund.

If you’ve been targeted

If you receive a suspicious phone call, text message or email that has allegedly been sent by the IRS, do not engage with the scammer. Block the number on your phone and mark the email as spam.

If you are a victim

If you are the victim of identity theft related to taxes or stimulus payments, there are steps you can take to mitigate the loss.

If you received a 1099-G for unemployment benefits you’ve never filed for or received, it’s best not to ignore it. Contact your state’s unemployment office to report the fraud. It should be able to send you a corrected 1099-G showing you did not get any benefits.

First, report the scam to the correct authorities. If a fraudulent tax return was filed in your name, the IRS will mail you a Letter 4883C or 6330C to verify your identity. You may also need to call the toll-free number provided on the letter and visit an IRS Taxpayer Assistance Center . After reporting the fraud, you’ll likely need to file a paper tax return. Complete an Identity Theft Affidavit (Form 14039) and attach it to the back of your paper return.

If you’ve mistakenly shared your information with a scammer and they’ve stolen your stimulus check, you will likewise need to let the IRS know. Visit Identitytheft.gov where you will receive a personal recovery plan that will hopefully minimize the damage done by the scammer and help you reclaim your lost funds.

It’s tax season and stimulus season, so it’s also scam season! Keep your guard up and follow the tips outlined here to prevent yourself from falling victim to one of the many circulating scams. Stay safe!

Your Turn: Have you been targeted by a stimulus or tax scam? Tell us about it in the comments.

Learn More:
wfmz.com
freep.com
cnbc.com
irs.gov

If You Hear This, You’re Talking to a Tax Scammer

It’s tax season, and scammers are working overtime to get your money. Tax scams are as varied as they are common, but when you know what to look for, you can beat fraudsters at their game and keep them from getting your money and your information.

If you hear or see any of the following 12 lines this tax season, you know you’re dealing with a scammer:

1. “We’re calling from the IRS to inform you that your identity has been stolen and you need to buy gift cards to fix it.”

If your identity has indeed been stolen, no amount of purchased gift cards will get it back. Unfortunately, there is also no way to reclaim funds that are lost through this kind of scam.

2. “You owe tax money. We’ll have to arrest you, unless you purchase iTunes gift cards.”

Yes, this really happened. A 20-year-old college student was tricked into putting $500 onto three separate iTunes cards and $262 on a fourth, when she received a call from an “IRS agent,” USA Today reports. As unbelievable as it sounds, when threatened with arrest, people will believe or do almost anything.

In this ruse, the scammer will make sure to get the access numbers of the iTunes card, which gives them easy and untraceable access to cash.

3. “If you don’t pay your tax bill now, we’ll cancel your Social Security number.”

Your Social Security number cannot be canceled, suspended, frozen or blocked.

“If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up,” the IRS says.

4. “We’re calling you about a tax bill you’ve never heard about before.”

The IRS will never initiate contact about an overdue tax bill by phone; they will first reach out by mail.

5.  “This is the Bureau of Tax Enforcement. We’re putting a lien or levy on your assets.”

The Bureau of Tax Enforcement does not exist. If you receive a call from this, or a similar bogus agency, hang up.

6. “This is a pre-recorded message from the IRS. If you don’t call us back, you’ll be arrested.”

The IRS does not leave pre-recorded voicemails, especially those claiming to be urgent and/or threatening.

7. “You must make an immediate payment over the phone, using our chosen method.”

The IRS says that its agents will never call to demand immediate payment using a specific payment method, such as a prepaid debit card, gift card or wire transfer. If you hear this, you’ll know you’re talking to a scammer.

8. “Click here for more details about your tax refund.”

The IRS will never send emails with information about tax refunds. Emails worded like this will lead the victim to an IRS-lookalike site that is actually created by scammers. Clicking on the link will load the victim’s device with malware.

9. “We represent the Taxpayer Advocate Service and we need some information.”

Although the Taxpayer Advocate Service (TAS) is a legitimate organization within the IRS to assist taxpayers, representatives of the TAS don’t call individuals out of the blue. The TAS also will not ask taxpayers to share sensitive information, such as their Social Security number, over the phone.

10. “You owe the federal student tax.”

The federal student tax is yet another invention of tireless scammers. It does not exist, and if you receive a call about it, you’re being targeted by a scammer.

11. “This is an SMS/social media post from the IRS. We need more information.

The IRS doesn’t initiate contact with taxpayers, or ask for sensitive information, via text message or social media.

12. “We don’t need to sign your tax return even though we prepared it.”

A legitimate tax preparer must sign your tax return and will have a valid Preparer Tax Identification Number (PTIN). If a tax preparer is reluctant to sign yours, or to share their PTIN, you are likely dealing with a scammer.

If you’ve been targeted by any of these tax scams, you can fight back by reporting the scam to the proper authorities. Phishing emails that appear to be from the IRS can be forwarded to phishing@irs.gov. Alert the FTC about IRS phone scams and report Social Security Administration phone impostor scams on the Social Security Administration’s website.

Stay alert during tax season and keep your money and your information safe!

Have you been targeted by a tax scam? Share your experience in the comments.

Learn More:
clark.com
nerdwallet.com
mybanktracker.com
irs.gov

IRS Reveals List of Dirty Dozen Tax Scams for 2020

Each year, the IRS publishes the “Dirty Dozen,” a list of tax scams most prevalent during that year’s tax season. This year, with COVID-19 pushing off the federal tax deadline to July 15, the IRS held off publishing the list until early July, and of course it’s loaded with COVID-19-related scams.SeptFeatured2020_tax-scam

Whether you’ve filed for an extension, you’ve had your taxes filed for months or you’ve gotten them in just in time at the mid-July deadline, be on the lookout for the Dirty Dozen of 2020, which continues spreading for months after Tax Day.

1. Phishing: Fake emails or websites impersonate the IRS in an attempt to steal information about refunds or Economic Impact Payments (EIPs).

Protect yourself: The IRS will never initiate contact with taxpayers via email. Be extra wary of any websites and emails making heavy use of COVID-19 terms like stimulus, coronavirus and Economic Impact Payment.

2. Fake charities: Criminals exploit the fear and uncertainty surrounding the pandemic to set up bogus charities that rob innocent victims who believe they’re helping the unfortunate. The “charity” may even claim to be working on behalf of the IRS to help victims of the virus get their tax refunds.

Protect yourself: Charities with familiar-sounding names that aggressively market themselves are often bogus charities trying to make donors believe they represent the actual well-known organization. They will also refuse to provide an Employer Identification Number (EIN) when asked, and will not have a positive review on sites like Charity.org. Taxpayers can also search for legitimate charities using the IRS charity search tool.

3. Threatening impersonator phone calls: An alleged IRS agent threatens the victim with arrest, deportation or license revocation if taxes are not paid immediately by prepaid gift card or wire transfer.

Protect yourself: The IRS will never threaten a taxpayer or demand immediate payment over the phone. It also will not insist on being paid via gift card or wire transfer.

4. Social media scams: Scammers use information that can be found on social media platforms for a variety of scams, including the impersonation of the victim’s friend to get at the victims’ more private information. This ruse often ends in tax-related identity theft.

Protect yourself: The victim’s “friend” will claim to be in a compromised position and to urgently need the victim’s personal information. When contacted privately, though, the “friend” will have no knowledge of the interaction.

5. EIP or refund theft: Scammers steal taxpayers’ identities, file false tax returns in their names and pocket their refunds and their EIPs.

Protect yourself: Personal information should never be shared online with an unverified contact, even if the contact promises to assist in tax filing or receiving the EIP.

6. Senior fraud: Scammers, or long-term caregivers of the elderly, file tax returns on their behalf and then pocket the refunds and EIPs.

Protect yourself: Seniors should be wary of bogus emails, text messages and fake websites asking them to share their personal information.

7. Scams targeting non-English speakers: Scammers impersonate IRS agents and target non-English speakers, threatening jail time, deportation or revocation of the victim’s driver’s license if an immediate tax payment is not made. The victims have limited access to information and often fall for these scams.

Protect yourself: The IRS will not threaten taxpayers over the phone or insist upon immediate payment.

8. Unscrupulous return preparers: Alleged tax preparers will reach out to the victim and offer their services. Unfortunately, though, they will steal the victim’s personal information, file a tax return on their behalf and pocket the refund, or promise inflated refunds for a bigger fee.

Protect yourself: If a tax preparer is not willing to share their preparer Tax Identification Number (TIN), they are likely to be a scammer. Also, if the alleged preparer promises credits and deductions that sound too good to be true, they probably are.

9. Offer in Compromise scams: Bogus tax debt resolution companies make false claims about settling tax debts for “pennies on the dollar” through an Offer in Compromise (OIC) in exchange for a steep fee.

Protect yourself: An OIC that sounds outrageously attractive is likely bogus. Taxpayers can use the IRS’s OIC tool to see if they qualify for an authentic offer.

10. Fake payments with repayment demands: A scammer steals a taxpayer’s personal information, files a fake tax return on their behalf and has the refund deposited into the taxpayer’s checking account. The scammer then calls the victim impersonating the IRS and claiming the refund was mistakenly inflated, so the victim must return the extra funds via gift card or wire transfer. Of course, this money will go directly into the scammer’s pockets.

Protect yourself: Refund checks will never be deposited in a taxpayer’s account if they have not filed taxes. Also, the IRS does not demand payment by a specific method.

11. Payroll and HR scams: Scams target tax professionals, employers and taxpayers to steal W-2s and other tax information. They will then impersonate the employee and request to change their direct deposit information for their paychecks.

Protect yourself: If an employer or HR representative receives a request for a direct deposit change, it’s best to check with the employee directly to see if the request is legitimate.

12. Ransomware: Malware infects a victim’s computer, network or server, and tracks keystrokes and/or other computer activity. Sensitive data is then encrypted and locked. When the victim tries to access their data, they’ll receive a pop-up message demanding a ransom payment for the return of their information.

Protect yourself: Links embedded in emails from unverified sources should never be opened. Tax software should not be downloaded unless it features multi-factor authentication.

Don’t be a victim of the dirty dozen! Stay alert and stay safe.

Your Turn: Have you been victimized by a tax scam? Tell us about it in the comments.

Learn More:
irs.gov
abcnews4.com

 

 

5 Common Tax Mistakes To Avoid

  1. Young couple sit in modern kitchen express dismay and worry over proper way to fill out paperworkFaulty Math – A small miscalculation can throw off all your numbers and get you into trouble with the IRS.
  2. Name Changes and Misspellings – If you’ve recently changed your legal name, let the Social Security Administration know.
  3. Omitting Extra Income – If you’ve taken any side jobs during the year, fill out a 1099-MISC and file it along with your taxes.
  4. Recent Tax Law Changes – When preparing your taxes, be sure to file according to the most recent laws.
  5. Signing Your Forms – If filing the old-fashioned way, put your signature wherever required. If filing online, you can use a PIN instead.

Your Turn:
Know of any other commonly made mistakes when it comes to filing taxes? We’d love to hear about it!

Tax Scams 2019

Each year, the IRS publishes the “Dirty Dozen,” a list of 12 scams that are rampant during that year’s tax season.

This year, the IRS is cautioning taxpayers to be extra vigilant because of a 60% increase in email phishing scams over the past year. This is particularly disheartening, since it comes on the heels of a steady decline in phishing scams over the previous three years.

Typically, an email phishing scam will appear to be from the IRS. Once the victim has opened the email, the scammer will use one of several methods to get at the victim’s personal information, including their financial data, tax details, usernames and passwords. They will then use this information to steal the victim’s identity, empty their accounts or file taxes in the victim’s name and then make off with their refund.

Scammers have several means for fooling victims into handing over their sensitive information. The most popular tax-related phishing scams include the following:

  • Tax transcript scams
    In these scams, victims are conned into opening emails appearing to be from the IRS with important information about their taxes. Unfortunately, these emails are bogus and contain malware.
  • Threatening emails
    Also appearing to be from the IRS, these phony emails will have subject lines like “IRS Important Notice” and will demand immediate payment for unpaid back taxes. When the victim clicks on the embedded link, their device will be infected with malware.
  • Refund rebound
    In this scam, a crook posing as an IRS agent will email a taxpayer and claim the taxpayer was erroneously awarded too large a tax refund. The scammer will demand the immediate return of some of the money via prepaid debit card or wire transfer. Of course, there was no mistake with the victim’s tax refund and any money the victim forwards will be used to line the scammer’s pockets.
  • Phony phone call
    In this highly prevalent scam, a caller spoofs the IRS’s toll-free number and calls a victim, claiming they owe thousands of dollars in back taxes. Those taxes, they are told, must be paid immediately under threat of arrest, deportation or driver’s-license suspension. Obviously, this too is a fraud and the victim is completely innocent.

If you’re targeted
When targeted by any scam, it’s crucial to not engage with the scammer. If your Caller ID announces that the IRS is on the phone, don’t pick up! Even answering the call to tell the scammer to get lost can be enough to mark you as an easy target for future scams. If you accidentally picked up the phone, hang up as quickly as possible.

Similarly, suspicious-looking emails about tax information should not be opened. Mark any bogus tax-related emails that land in your inbox as spam to keep the scammers from trying again.

If you’re targeted by a tax scam, report the incident to help the authorities crack down on these crooks. Forward suspicious tax-related emails to phishing@irs.gov. You can also alert the Federal Trade Commission at FTC.gov.

Protect yourself from tax scams
Stay one step ahead of scammers this tax season by being proactive. Protect yourself with these steps:

File early in the season so scammers have less time to steal your identity, file on your behalf and collect your refund.
Use the strongest security settings for your computer and update them whenever possible.
Use unique and strong passwords for your accounts and credit or debit cards.
Choose two-step authentication when conducting financial transactions online.

Remember, the IRS will never:
Call about taxes owed without having first sent you a bill via snail mail.
Call to demand immediate payment over the phone.
Threaten to have you arrested or deported for failing to pay your taxes.
Require you to use a specific payment method for your taxes.

Ask you to share sensitive information, like a debit card number or checking account number, over the phone.

Be alert and be careful this tax season and those scammers won’t stand a chance!

Your Turn:
Have you ever been targeted by a tax scam? Share your experience with us in the comments.

SOURCES:
https://clark.com/personal-finance-credit/taxes/beware-of-these-common-irs-scams/

https://www.google.com/amp/s/www.forbes.com/sites/kellyphillipserb/2018/12/04/irs-warns-on-surge-of-new-email-phishing-scams/amp/

https://www.businessinsider.com/irs-phone-scam-what-to-do-if-you-get-scam-call-2018-2

Don’t Panic: Filing Taxes As A College Student

forms, pen and calculator on deskImagine skipping a day of class, then coming into the next session and seeing a test. You open the packet and see what appears to be gibberish staring back at you. Everyone else around you seems to have a perfect grasp of what’s going on, but you’re just stumbling in the dark.

That can be what the process of preparing your taxes can feel like the first time you do them. You’re given a big pile of paper and expected to sort it out yourself. It’s easy to get overwhelmed.

Before you start to panic, though, take a deep breath. There are a few questions that might make your life much easier. Grab that big stack of paper and ask yourself …

1.) Do I even have to file?
There’s an easy way to short circuit this whole process. If you didn’t make much money last year, you don’t have to file taxes. If your earned income (wages and tips) is less than $6,300 and your unearned income (interest and dividends) is less than $1,050, you probably don’t have to file taxes.

Of course, you might still want to do so. If you had a summer job, your employer took taxes out of your paycheck as though you’d been working all year. You might be able to get a little bit of a refund for your effort.

2.) How hard does this have to be?
If your tax situation is relatively simple, you may be eligible to use a form called the 1040-EZ (as in easy). It’s a much more straightforward document. You just enter your wages, your filing status (married or single) and the taxes you’ve already paid. It’s all laid out on your W-2, the form you got in the mail or online from your employer.

The 1040-EZ lives up to its name. It’s one page long. Once you put your name, address and Social Security number on it, you’re about halfway done. You don’t get to claim any tax credits, but there aren’t a lot of tax credits available for college students in any case.

3.) Where can I get help?
You don’t have to go it alone. If you’re feeling antisocial, you can (and should) use an e-filing service. The IRS has a tool to help you pick the best one. It’s available here: https://apps.irs.gov/app/freeFile/jsp/wizard.jsp?ck.
There may also be tax help available. A program called the Volunteer Income Tax Assistance (VITA) is available on many college campuses. Business students looking to bolster their resumes will frequently volunteer to help with taxes for free. This is especially important if your tax situation is more complicated, like if you’re paying for college on your own or have self-employment income from a side hustle.

Your Turn:
Are you stressed about taxes? Tell us about it in the comments, or pop down and help your fellow students out!

Sources:
https://www.irs.gov/individuals/free-tax-return-preparation-for-you-by-volunteers
http://blog.taxact.com/1040-tax-forms/
http://www.nolo.com/legal-encyclopedia/when-does-your-child-have-file-tax-return.html