Tax Refunds & Advice

One of the most basic things you will have to do when it comes to filing your taxes is choose a status. You only have one filing status; you cannot have more than this. In most cases, your status is determined by whether or not you are married. But you do not want to live by this rule because there are some exceptions.

Single Filing Status. If you are not married this is the status that you will choose. For the most part, this status also holds true for those who are either divorced or legally separated from their partner.

Head of Household Filing Status. This is not the most common filing status, but you need to know a bit about it anyway. To qualify, you need to be unmarried, have the ability to claim at least one dependent, and have been a caregiver for that dependent for at least six months during the tax paying year. Many people believe that all single parents can choose this filing status; this is not true.

Married Filing Separately. Just because you are married doesn’t mean you have to file a joint return. Unfortunately, if you are married but file separately you are not going to have access to as many tax benefits. The reason to choose this filing status is if you are interested in keeping your tax liabilities separate from your spouse.

Married Filing Jointly. This status is common. If you are married and file a joint return you fit into this category. Most married couples opt for this filing status because it offers more tax benefits than filing separately.

Which filing status are you going to choose? Most people find that this is self-explanatory. If you have any questions, make sure you ask a tax professional before choosing a filing status and sending off your return.

Are you thinking of adjusting your withholding so you can receive more money in each paycheck? This seems like a good idea because it means that you will have more available money for the time being. But even though this may make you smile right now, in the future this joy may turn to pain. Remember, if you pay less in taxes right now you are going to owe more when you file your final return. Is that a tradeoff you are willing to make?

There is nothing wrong with adjusting your withholding if you know what you are doing. For instance, if you are always receiving a refund this probably means that you are paying a bit too much in taxes during the year. If you make a slight adjustment you can receive more money each paycheck while still keeping things in order for the end of the year. The same thing holds true if you always owe more money to the IRS. In this case you can pay more in taxes so you do not get hit with a big bill after filing your return.

Don’t get caught up in the “I want more money right now” trap. Many people do this and love every minute of it for the time being. But when they end up owing the IRS several thousand dollars with their final return they think back and wonder why they made such a colossal mistake.

If you are going to adjust your withholding make sure you know what you are doing. This is not something you should do on a whim. Instead, it should be well thought out to ensure that you do not make a change that will harm you down the road. 

Have you received an email from the Internal Revenue Service? Does it sound legitimate? No matter what the email says, remember this at all times: the IRS does not and never has communicated with taxpayers via email. This is not set to change anytime in the future, either. Simply put, if you receive an email from somebody claiming to be the IRS it is a scam. You should never even open an email that is supposedly from the IRS.

Most email scams that come from those claiming to be with the IRS ask for personal information such as your bank account number, credit card number, password for an online account, etc. The scammer is hunting for people who are naïve enough to give out this information because they don’t want to get in hot water with the IRS. Believe it or not, thousands of people fall for these scams every year. You don’t want to be next.

If you do open an email you should never click on any links. It is one thing to read what the email says, but clicking through could lead to malicious software being sent to your computer in addition to many other problems.

IR-2007-109 from the IRS says: “The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.”

As you can see, the IRS makes it known that they will not communicate with you via email. If you receive an email from somebody claiming to be with the IRS chances are that it is a scam.