Tax Refunds & Advice

Every year, millions of taxpayers owe the IRS additional money. Of course, they find this out when file their year end return. Many people are afraid to file because they do not have the money to pay anything that they may owe. If you are in this situation, you need to snap out of it right away. When it comes down to it, there is no avoiding the IRS. You may think that avoiding filing is better, but this is not the case.

Did you know that the penalty for not filing your taxes is worse than if you don’t pay your bill in full? The easiest way to understand this is to take a closer look at the numbers. If you do not file, the penalty is generally 4.5 percent of the tax that you owe the IRS. You are hit with this 4.5 percent penalty for each month that goes by. On the other side of things, if you file and cannot afford to pay what you owe, you are only charged with one half of a percent penalty per month. Now can you see which option is better? If you do not file at all you will be paying an extra 4 percent penalty each month. Obviously, this can add up to a large amount over time.

Even if you cannot afford to pay in full, you need to file. At the very least you will be able to send the IRS what you have, and then pay month by month until your bill is satisfied. This sure beats not filing at all, and subsequently having to deal with a 4.5 percent penalty each month. 

Phishing is nothing more than an internet based technique used to collect financial and/or other information from unsuspecting individuals. The IRS has put this scam at the top of the list of those that taxpayers should be aware of. If you are not careful about what you are doing and answer unsolicited emails, you may end up putting your financial information in the wrong hands.

The IRS is also warning people to be careful of anybody posing as an IRS representative wanting to speak about the upcoming economic stimulus payments. Scammers are using this as a way of tricking individuals into divulging personal and financial information including social security numbers, bank account information, etc.

This year alone, more than 1,500 phishing scams have been forwarded to the IRS by alert taxpayers. These thieves use the information they collect to open credit cards in others names, steal from bank accounts, and take out loans.

The best way to avoid becoming victim of a phishing scam is to keep financial information close to the vest. You should never share any information unless you are 100 percent sure of who you are speaking with. Anytime that you receive an email from somebody claiming to be an IRS representative you should be extra cautious. Additionally, you can also forward these emails to the IRS in order to make them aware of the common scams that are circulating.

With phishing scams on the rise, it is important for taxpayers to be very careful as to which emails they reply to. As a general rule of thumb, never share your personal or financial information via email.

April 15, 2008 is closing in fast. This is the date by which you have to file your income tax, and also pay any additional money that you may owe. Although there is only one month until the deadline, you still have time to take care of everything in an orderly manner. But remember, the longer you wait the more stressful things are going to get. If you find yourself too close to the deadline, it is safe to say that you may end up being late.

If you have yet to file your taxes, you need to start working on this today. For those who do not have the knowledge or time to do so on their own, there is only one other option: hire a professional. By seeing a professional tax advisor you will be able to file within a matter of hours. Not only will they go through the entire process with you, but they will also file your forms electronically. This means that the IRS will immediately receive your information. For those who are waiting until the last minute, e-filing is a great idea.

What happens if you do not file on time? One of the worst things that could happen would be for you to owe additional money to the IRS. Since you did not file on time, not only will you have to pay back this money, but the IRS will add interest on top of that. The same thing holds true if you make a mistake, and have to re-file after the deadline.

With another month to go, time is running out for those who have yet to file their income tax. If this sounds like you, get started on your forms today. You do not want to miss the filing and/or payment deadline.