From the IRS website tax tips page
Direct deposit is the fast, easy and safe way to receive your tax refund.
Whether you file electronically or on paper, direct deposit gives you access to
your refund faster than a paper check.
Here are four reasons more than 80 million taxpayers chose direct deposit in
option, taxpayers can divide their refunds among as many as three checking or savings
Some banks require both spouses’ names on the account to deposit a tax refund
from a joint return. Check with your bank for their direct deposit
Check the instructions in your tax form for more information about direct
deposit and the split refund option. Helpful tips on both are also available in
IRS Publication 17, Your Federal Income Tax. Publication 17 and IRS Form 8888
are available on IRS.gov or by calling the IRS at 1-800-TAX-FORM
IRS Announces Simplified Option for Claiming Home Office Deduction Starting
This Year; Eligible Home-Based Businesses May Deduct up to $1,500. Effective
for taxable years beginning on or after Jan. 1, 2013 the Internal Revenue Service today announced a simplified option
that many owners of home-based businesses and some home-based workers may use to
figure their deductions for the business use of their homes. The new optional deduction, capped at $1,500
per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping
burden on small businesses. Though homeowners using the new option cannot depreciate the portion of their
home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty
losses on the home as itemized deductions on Schedule A. These deductions need not be
allocated between personal and business use, as is required under the regular method.
Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees
are still fully deductible. Current restrictions on the home office deduction, such as the requirement
that a home office must be used regularly and exclusively for business and the
limit tied to the income derived from the particular business, still apply under
the new option. The new simplified option is available starting with the 2013 return filed in 2014. This should make it a little more desireable to take the deduction for those of you who do use their home for business but don't want to bother with the extra paperwork required to take the deduction.
For those of you still dealing with possible forclosures or shortsales there is good news.
Congress has extended this provision one year so that it applies for tax year
2013. Unless extended again by Congress, the provision expires for debt cancelled after 2013.
As a reminder, the cancellation of debt (a foreclosure or shortsale) may result in ordinary
income, income from the sale of assets, or both. Many taxpayers are surprised to know that when they are losing there home they may have to pay tax because of it. There are a number of exceptions to this
rule, including cancellation of debt due to bankruptcy, insolvency and qualified principal residence
indebtedness. The exclusion for the cancellation of qualified principal residence indebtedness is limited
to $2 million of acquisition debt. This exclusion was scheduled to expire for tax years after 2012. So, if this is something you think you may have to do then now is the time.
Taxpayer Alert: How to Recognize and Avoid Identity Theft
Washington, DC, (January 28, 2013)
Across the nation, identity thieves are using legitimate information to scam
honest taxpayers, and frequently posing as the IRS to do so. The IRS is taking
this seriously, and has created the IRS Identity Theft Protection Unit to
address the growing problem. Being aware of some of the most common scams can
help protect you from having your personal information used to commit fraud or
Phony IRS emails.
In a “phishing”scam, an official-looking email shows an IRS logo that lures the
consumer to a website that requests personal and financial information, such as
a Social Security number, bank account, or credit card numbers. In truth, the
IRS does not send out unsolicited e-mails, and does not use email to ask for
detailed personal or financial information such as PIN numbers, passwords or
similar secret access information for credit cards or bank accounts. The IRS
does not initiate contact with taxpayer via email. The only genuine IRS website
In a refund scam, a bogus e-mail tells the recipient that he or she is eligible to
receive a federal tax refund for a given amount (often $63.80) and sends the
recipient to a website to complete a form to submit the tax refund request. The
form then asks for personal and financial information. In fact, the IRS does not
notify taxpayers of refunds via e-mail. And, taxpayers do not have to complete a
special form or provide detailed financial information to obtain a refund.
Refunds are based on information reported on the tax
Antifraud Commission scam.
In this case, the scammer sends an e-mail stating the IRS “Antifraud Commission”
has found that someone tried to pay their taxes through the Electronic Federal
Tax Payment System, or EFTPS, using the e-mail recipient’s credit card and, as
a result, some of the recipient’s money was lost and the remaining funds were
blocked. The e-mail includes a link that sends the recipient to a website where
he or she is directed to enter personal and financial information in order to
unblock their funds. Don’t take the bait! The IRS does not have an Antifraud
Commission and does not have the authority to freeze a taxpayer’s credit card
or bank account because of potential theft or fraud perpetrated against the
taxpayer, and does not use e-mail to initiate contact with
Other email scams from fraudsters posing as IRS personnel
include notifications of lottery winnings, a notice that more than one return
was filed by the taxpayer, and notification of W-2s received from an unknown
employer. Scams can also take the form of “assisting” taxpayers in filing
returns to collect fraudulent refunds, promotion of tax evasion techniques, or
reporting false income for purposes of increasing refundable
A taxpayer who believes there is a risk of identity theft due to
lost or stolen personal information should contact the IRS immediately so the
agency can take action to secure his or her tax account. The taxpayer should
contact the IRS Identity Protection Specialized Unit at
Get help. A taxpayer who believes they may have received a fraudulent or
otherwise questionable communication related to taxes should contact a licensed
tax professional. Enrolled agents (EAs) are America’s tax experts. They are the only
federally-licensed tax practitioners who specialize in taxation and also have unlimited
rights to represent taxpayers before the IRS. That means that if you get
a letter from the IRS, or worse, are audited or are the target of a collection
action, your EA can speak directly to the IRS on your behalf. Find an EA in
your area on the directory at www.naea.org.
Good news, it is the 30th and we can now efile tax returns. Yay! Bad news, not all of the forms are approved by the IRS yet. This will not affect most taxpayers but it will affect some. Those that it will affect are taxpayers claiming the depreciation expense and some of the more obscure credits. The depreciation forms should be ready late February or early March according to the IRS website. Also, taxpayers claiming the education credits will need to wait until mid February to file. So what does this mean for you? Well, you can still get your taxes done and have them ready to finalize once the forms are approved.
Good news, the IRS has stated that even though the official opening of tax season has been delayed because of the recent last minute changes, they do not foresee any delays in refunds once returns have begun being processed on the 30th. I also advise that the quickest way to get a refund is electronic filing and direct deposit.
Tax season is here. The IRS has delayed filing until January 30th but that doesn't mean you can't get started gathering all of the information and documents you will need. Be sure and call for an appointment when you are ready. For returning clients, remember you can drop off your info at any time and I will call with any questions I may have. Hope to see or hear from all of you soon.
Chris has been working in the industry for over a decade and has a passion for ensuring her clients have the best service in the area of taxation, accounting and bookkeeping.