Boost Your Tax Knowledge with a Free Learning Program from the IRS

The IRS has a free program for anyone who wants to learn about taxes. “Understanding Taxes” is available 24/7 on IRS.gov. It was designed by the IRS and teachers to help you learn the “how’s” and “why’s” of taxes. The program can make learning about federal taxes as easy as A-B-C.

• Accessible (web-based)
• Brings learning to life
• Comprehensive

Here are six more reasons to study up on it:

1.     Lessons on IRS.gov.  Teachers and students will find that the nearly 40 lessons on IRS.gov are easy, relevant and fun!  

2.     User friendly site map.  You can quickly look through the program and skip to the part you want.

3.     Tutorials, tests and more.  A series of tax tutorials guide you through the basics of tax preparation. Another feature is a chance to test your knowledge through tax trivia. There’s also a glossary of tax terms.

4.     Customize to fit your style.  If you’re a teacher, you can make the interactive program fit your style. Use your own lesson plans and plan your own activities. It’s easy to add to your school’s curriculum.

5.     No need to register.  You don’t need to register or login to use the program. You can take a break and return to where you left off whenever you choose. Just take note of the page and lesson number before you leave the page. 

6.     The how’s and why’s of taxes.  Learn the basic concepts of taxes. Self-paced modules offer a step-by-step approach to tax preparation. The lessons are also a great way to learn about the history and theory of taxes in the USA.

You may use the program anytime during the year. Visit IRS.gov and type “Understanding Taxes” in the search box. The application contains lessons and practice problems based on 2014 tax law.

For more current tax law training, visit Link and Learn Taxes on IRS.gov. The IRS will update this program later this year. The Web address is http://apps.irs.gov/app/vita/. You can also find it if you type “Link and Learn” in the search box.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Submit a Mutilated Currency Claim and Get Your Money's Worth

Currency can be damaged in many ways, whether it’s by fire, water, chemicals, animals or simple deterioration. Mutilated currency includes any type of damage that makes its value questionable.

Did you know that the U.S. Treasury Department's Bureau of Engraving and Printing examines and redeems mutilated currency at no cost to you?
If you have damaged currency that you inherited or found in your backyard, don’t throw it away - you could be losing money! Learn more about mutilated currency and how to submit a claim. Keep in mind that the standard wait time for processing is 6 to 36 months. 

What Do We Mean By Mutilated Currency?

Mutilated currency is currency which has been damaged to the extent that:

·        Its condition is such that its value is questionable and the currency must be forwarded to the Bureau of Engraving and Printing for examination by trained experts before any redemption is made. One example of mutilated currency may be bills missing relevant security features.

Currency can become mutilated in any number of ways. The most common causes are: fire, water, chemicals, and explosives; animal, insect, or rodent damage; and petrification or deterioration by burying.

Free Public Service

The BEP redeems mutilated currency as a free public service.  Lawful holders of mutilated currency may receive a redemption at full value when:

·        Clearly more than 50 percent of a note identifiable as United States currency is present, along with sufficient remnants of any relevant security feature and clearly more than one-half of the original note remains; or,

·        Fifty percent or less of a note identifiable as United States currency is present and the method of mutilation and supporting evidence demonstrate to the satisfaction of the Treasury that the missing portions have been totally destroyed. 

Every year the Treasury Department handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million. Your money is important. However, please know that heavy volume and the precise nature of the work may result in lengthy wait times. Please follow the submission instructions carefully to help us process your claim in the most efficient manner.

Source: http://www.bep.gov/services/currencyredemption.html

Content Clean-Up

The word “audit” has the power to send shivers down the spines of even the most stoic business folks. It’s one of those unfortunate words that usually indicates you’re about to go through an amazingly unpleasant experience. But, an audit of your website—well, that’s a good thing. And everyone should do it.

Just because you know something on your website is no longer applicable doesn’t mean search engines do, and they will serve up bad or erroneous information to potential customers—which no business owner wants. Your website’s job is to inform and offer a great user experience. That’s why you need regular audits.

Set aside time every year (or even twice a year) to investigate and inventory all the content you’ve compiled on your website. If you find information that is outdated, misleading or otherwise confusing—update it or remove it. Tidying up your content house makes for happier customers and increases your credibility.

Source: http://www.manta.com/resources/tip-of-the-day/content-clean-up/?utm_medium=Email_Marketing&utm_source=Newsletter&utm_campaign=TOTD&utm_content=TOTD_NewDesign2015&utm_term=17740&su=hq344mgu9vl41l

File As Soon As Possible to Maintain Eligibility for Advance Payments of the Premium Tax Credit

The IRS is sending letters to taxpayers who received advance payments of the premium tax credit in 2014, but who have not yet filed their tax return. You must file a tax return to reconcile any advance credit payments you received in 2014 and to maintain your eligibility for future premium assistance. If you do not file, you will not be eligible for advance payments of the premium tax credit in 2016. 

If you receive a Letter 5591, 5591A, or 5596, you are being reminded to file your 2014 federal tax return along with Form 8962, Premium Tax Credit.  The letter encourages you to file within 30 days of the date of the letter to substantially increase your chances of avoiding a gap in receiving assistance with paying Marketplace health insurance coverage in 2016.

Here’s what you need to do if you received a 5591 or 5591A letter:

·         Read your letter carefully.

·         Review the situation to see if you agree with the information in the letter.

·         Use the Form 1095-A that you received from your Marketplace to complete your return. If you need a copy of your Form 1095-A, log in to your HealthCare.gov or state Marketplace account or call your Marketplace call center.

·         File your 2014 tax return with Form 8962 as soon as possible, even if you don’t normally have to file.

·         If you have already filed your 2014 tax return with Form 8962, you can disregard the letter.

Here’s what you need to do if you received a 5596 letter:

·         Read your letter carefully.

·         Review the situation to see if you agree with the information in the letter.

·         Use the Form 1095-A that you received from your Marketplace to complete Form 8962. If you need a copy of your Form 1095-A, log in to your HealthCare.gov or state Marketplace account or call your Marketplace call center.

·         File your 2014 tax return with Form 8962 as soon as possible, even though you have an extension until October 15, 2015, to file.

·         If you have already filed your 2014 tax return with Form 8962, please disregard this letter.

Source: http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/File-As-Soon-As-Possible-to-Maintain-Eligibility-for-Advance-Payments-of-the-Premium-Tax-Credit

Key Tax Tips on the Tax Effects of Divorce or Separation

Income tax may be the last thing on your mind after a divorce or separation. However, these events can have a big impact on your taxes. Alimony and a name change are just a few items you may need to consider. Here are some key tax tips to keep in mind if you get divorced or separated.

·         Child Support.  If you pay child support, you can’t deduct it on your tax return. If you receive child support, the amount you receive is not taxable.

·         Alimony Paid.  If you make payments under a divorce or separate maintenance decree or written separation agreement you may be able to deduct them as alimony. This applies only if the payments qualify as alimony for federal tax purposes. If the decree or agreement does not require the payments, they do not qualify as alimony.

·         Alimony Received.  If you get alimony from your spouse or former spouse, it is taxable in the year you get it. Alimony is not subject to tax withholding so you may need to increase the tax you pay during the year to avoid a penalty. To do this, you can make estimated tax payments or increase the amount of tax withheld from your wages.

·         Spousal IRA.  If you get a final decree of divorce or separate maintenance by the end of your tax year, you can’t deduct contributions you make to your former spouse's traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.

·         Name Changes.  If you change your name after your divorce, notify the Social Security Administration of the change. File Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov or call 800-772-1213 to order it. The name on your tax return must match SSA records. A name mismatch can delay your refund.  

Health Care Law Considerations

·         Special Marketplace Enrollment Period.  If you lose your health insurance coverage due to divorce, you are still required to have coverage for every month of the year for yourself and the dependents you can claim on your tax return. Losing coverage through a divorce is considered a qualifying life event that allows you to enroll in health coverage through the Health Insurance Marketplace during a Special Enrollment Period.

·         Changes in Circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace you may get advance payments of the premium tax credit in 2015. If you do, you should report changes in circumstances to your Marketplace throughout the year. Changes to report include a change in marital status, a name change and a change in your income or family size. By reporting changes, you will help make sure that you get the proper type and amount of financial assistance. This will also help you avoid getting too much or too little credit in advance.

·         Shared Policy Allocation. If you divorced or are legally separated during the tax year and are enrolled in the same qualified health plan, you and your former spouse must allocate policy amounts on your separate tax returns to figure your premium tax credit and reconcile any advance payments made on your behalf. Publication 974, Premium Tax Credit, has more information about the Shared Policy Allocation.

Become a Tax Volunteer and Make a Difference in Your Community

If you ever wonder how to make a difference and help people in your community, then becoming a tax volunteer may be just right for you. The IRS is looking for people who will provide free tax help in 2016. You will receive all the tax training you need so you can help others file their tax return.

The IRS sponsors two programs that offer free tax help across the country. These are the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. Many people know them by their initials. In 2015, VITA and TCE volunteers prepared more than 3.7 million tax returns at no cost for people with low-to-moderate incomes.  

Here are five good reasons why you should become a VITA or TCE volunteer.

1.     No prior experience needed.  You’ll receive specialized training and can serve in a variety of roles. If you are fluent in another language, you may be able to help those who speak that language.

2.     Free tax law training and materials.  You’ll learn how to prepare basic tax returns and learn about tax deductions and credits that benefit eligible taxpayers. These include credits such as the Earned Income Tax Credit, Child Tax Credit and Credit for the Elderly.

3.     Volunteer hours are flexible.  Volunteers generally serve an average of three to five hours per week. The programs are usually open from mid-January through the tax filing deadline in April. A few sites are open all year.

4.     VITA and TCE sites are often nearby.  More than 12,000 sites were set up in neighborhoods all over the country this year. They are often set up in community centers, libraries, schools, shopping malls and similar places. Chances are good that you can volunteer at a site near you.

5.     Continuing education credits for tax pros.  Enrolled Agents and non-credentialed tax return preparers can earn credits when volunteering as a VITA/TCE instructor, quality reviewer or tax return preparer. See the IRS fact sheet for more information on Continuing Education Credits.  

As a volunteer, you’ll join a program that’s helped millions of people file tax returns at no charge for more than 40 years. Your help will make a difference. It’s people helping people. It's that simple.

To find out more, visit IRS.gov and type "tax volunteer" in the search box. If you’d like to become a volunteer, you will need to submit your volunteer interest information on IRS.gov at IRS Tax Volunteers.

Compete With Quality

If you’re competing against the big guys—national-chain service providers, or online retailers—it’s going to be hard to win on price. In fact, you may not want to win if it means being the cheapest. But you can turn this into a fair fight and, as a small business owner, you’re uniquely qualified to come out on top: Instead of price, focus on the value that comes with quality local products and personalized service. And turn your community connections into lifetime customers that appreciate long-term value over short-term discounts.

Take automobiles, for example. In the short term, you keep cash in hand by purchasing the lowest-priced model. But that purchase comes with hidden expenses. A low-cost model will likely get fewer miles per gallon than a midrange or higher-end vehicle. Will you find yourself in the repair shop more than if you had purchased at a higher price point? In the end, buying low often comes with higher costs in the long run.

Use the opportunity to discuss price—and quality—with potential customers. Position yourself not as the cheapest provider, but as the best value. Build these points into the culture of your business:

Don’t lowball yourself: Customers will pay a little more for a product or service if they see the higher quality and trust you to deliver it. Use your website to tell that story: Highlight specific features or unique aspects of your product—or the skill and experience behind your service—and include testimonials from other customers who can attest to the quality you deliver. When you meet customers in person, don’t assume they see the quality for themselves—point it out to them. And don’t hesitate to provide an estimate that may cost a little more than competitors’. Take the time to explain why the estimate may be a little higher—it’s not the cheapest, but it is the best value.

Position yourself to be seen: Visibility, convenience and attentive service can go a long way toward establishing value. Make it easy for customers to purchase your products and services. For instance, ensure that your telephone number is listed correctly wherever it appears—and that calls are returned promptly. On your website, make sure that all contact emails or submission forms are monitored and answered. And if something goes wrong, deliver a convenient, quick fix.

Turn connections into leads: Today’s consumers care about the impact businesses have on their communities. As a small business owner, you can earn customers’ loyalty—even at higher price points—by highlighting your local connections, jobs creation and social responsibility. Remind customers that the money they spend with you stays in your community. If your business supports local causes, solicit a testimonial for your website. Local connections can even help generate leads, such as when you attend games for a local youth sports team you sponsor, or when you donate goods or services to charitable social functions. Customers will appreciate, and pay for, quality that contributes to their communities.

Source: http://www.manta.com/resources/tip-of-the-day/compete-with-quality/?utm_medium=Email_Marketing&utm_source=Newsletter&utm_campaign=TOTD&utm_content=TOTD_NewDesign2015&utm_term=17575&su=hq344mgu9vl41l

Spotting Elder Financial Abuse

Financial abuse can be a devastating form of elder abuse. If you're concerned about an older friend or relative, here are some things to consider. To spot financial abuse, look for sudden changes in the older person’s financial situation, such as:

·         Suspicious changes in wills or powers of attorney – Out of the blue, your grandfather wills all of his belongings to his new nurse.

·         Financial activity the person couldn’t have done herself– You discover repeated ATM withdrawals from your bedridden mother’s bank account.

·         Bills not being paid – When visiting a neighbor, you see mail piling up on his desk. Maybe his caregiver is using his money for something other than paying bills.

·         Significant withdrawals or unusual purchases – You notice charges for fancy electronics on your thrifty aunt’s credit card bill.

If you see these signs and you’re worried that someone’s misusing a loved one’s personal information, IdentityTheft.gov explains what steps to take. 

Often, older adults are in the best position to recognize and prevent elder abuse and scams. That’s why the FTC’s Pass It On gives older adults tools to start conversations about scams and pass on their knowledge.

If you think you see elder abuse, report it. If there’s immediate physical danger, call 911. Otherwise, contact Adult Protective Services (APS). Your long-term care ombudsman may be able to help too, if the older person lives in a nursing home or assisted living. And if the financial abuse involves a scam, tell the FTC. 

For more resources aboutelder abuse prevention, check out the federal government’s Eldercare locator.

IRS Hack Far Larger than First Thought

August 18, 2015 —  

A hack of the Internal Revenue service first reported in May was nearly three times as large as previously stated, the agency said Monday.

Thieves have accessed as many as 334,000 taxpayer accounts, the IRS said.

In May, the IRS reported that identity thieves were able to use the agency's Get Transcript program to get personal information about as many as 114,000 taxpayers.

On Monday, the IRS said an additional 220,000 accounts had also been hacked. In all, 334,000 accounts were accessed, though whether information was stolen from every one of them is not known.

The hackers made use of an IRS application called Get Transcript, which allows users to view their tax account transactions, line-by-line tax return information or wage and income reported to the IRS for a specific tax year.

To enter the Get Transcript system, the user must correctly answer multiple identity verification question.

The hackers took information about taxpayers acquired from other sources and used it to correctly answer the questions, allowing them to gain access to a plethora of data about individual taxpayers.

The Get Transcript service was shut down in May.

Hackers love authentication-based systems because it's very difficult to distinguish between "the good guys and the bad guys" when someone is trying to get in, said Jeff Hill of STEALTHbits Technologies, a cyber security company.

"Here we have a case where a successful authentication-based attack was discovered in May, and yet the IRS is still unclear of the extent of the breach’s damage months later. Even now, how confident is the IRS they fully understand the extent of the attack completely, or should we expect yet another shoe to drop in the coming weeks?” Hill said.

Notification of the increased number of hacked accounts came Monday.

In a statement the agency said, "as part of the IRS's continued efforts to protect taxpayer data, the IRS conducted a deeper analysis over a wider time period covering the 2015 filing season, analyzing more than 23 million uses of the Get Transcript system."

That analysis revealed an additional 220,000 accounts had also potentially been accessed.

In addition to accounts the hackers were successfully able to access, the IRS disclosed hack attempts that didn't succeed. There were 111,000 attempts on accounts disclosed in May and 170,000 disclosed on Monday, for a total of 281,000 of accounts where the hackers "failed to clear the authentication processes," the agency said.

Taxpayers whose information was potentially breached will get letters in the mail from the IRS in the coming days.

They will also get access to free credit protection and Identity Protection PINs, the IRS said in a statement.

From USAToday

Moving Expense Deduction

If you move your home you may be able to deduct the cost of the move on your federal tax return next year. This may apply if you move to start a new job or to work at the same job in a new location. In order to deduct your moving expenses, your move must meet three requirements:

1. Your move must closely relate to the start of work.  In most cases, you can consider moving expenses within one year of the date you start work at a new job location. Additional rules apply to this requirement.

2. Your move must meet the distance test.  Your new main job location must be at least 50 miles farther from your old home than your prior job location. For example, let’s say that your old job was three miles from your old home. To meet this test, your new job must be at least 53 miles from your old home.

3. You must meet the time test.  You must work full-time at your new job for at least 39 weeks the first year after the move. If you’re self-employed, you must also meet this test. In addition you must work full-time for a total of at least 78 weeks during the first two years at the new job site. If your tax return is due before you meet the time test, you can still claim the deduction if you expect to meet it.
See Publication 521, Moving Expenses, for more information about the rules.
If you qualify for this deduction, here are a few more tips from the IRS: 

• Travel.  You can deduct certain transportation and lodging expenses while moving. This applies to costs for yourself and other household members while moving from your old home to your new home. You may not deduct your travel meal costs.
• Household goods and utilities.  You can deduct the cost of packing, crating and shipping your property. This may include the cost to store or insure the items while in transit. You can deduct the cost to disconnect or connect utilities at your old and new homes.
• Expenses you can’t deduct.  You may not deduct:
• Any part of the purchase price of your new home.
• The cost of selling your home.
• The cost of breaking or entering into a lease.

See Publication 521for more examples.

• Reimbursed expenses.  If your employer later pays you for the cost of a move that you deducted on your tax return, you may need to include the payment as income. You must report any taxable amount on your tax return in the year you get the payment.
• Address change.  When you move, make sure to update your address with the IRS and the U.S. Post Office. To notify the IRS, file Form 8822, Change of Address.

Premium Tax Credit – Changes in Circumstances.  If you purchased health insurance coverage from the Health Insurance Marketplace, you may receive advance payments of the premium tax credit. It is important that you report changes in circumstances, such as when you move to a new address, to your Marketplace. Other changes that you should report include changes in your income, employment, family size, or eligibility for other coverage. Advance credit payments provide premium assistance to help you pay for the insurance you buy through the Marketplace. Reporting changes will help you get the proper type and amount of premium assistance so you can avoid getting too much or too little in advance.


You can get Publication 521 and Form 8822 on IRS.gov/forms at any time.

Don’t Fall for New Tax Scam Tricks by IRS Posers

Though the tax season is over, tax scammers work year-round. The IRS advises you to stay alert to protect yourself against new ways criminals pose as the IRS to trick you out of your money or personal information. These scams first tried to sting older Americans, newly arrived immigrants and those who speak English as a second language. The crooks have expanded their net, and now try to swindle virtually anyone. Here are several tips from the IRS to help you avoid being a victim of these scams:

• Scams use scare tactics.  These aggressive and sophisticated scams try to scare people into making a false tax payment that ends up with the criminal. Many phone scams use threats to try to intimidate you so you will pay them your money. They often threaten arrest or deportation, or that they will revoke your license if you don’t pay. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a phone number or an email address for you to reply.
• Scams use caller ID spoofing.  Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official.
• Scams use phishing email and regular mail.  Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. All in an attempt to make the scheme look official.
• Scams cost victims over $20 million.  The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of about 600,000 contacts since October 2013. TIGTA is also aware of nearly 4,000 victims who have collectively reported over $20 million in financial losses as a result of tax scams.

The real IRS will not:

• Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
• Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
• Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.
• Ask for credit or debit card numbers over the phone.
• Threaten to bring in police or other agencies to arrest you for not paying.

If you don’t owe taxes or have no reason to think that you do:

• Do not provide any information to the caller. Hang up immediately.
• Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
• You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

If you know you owe, or think you may owe taxes:

• Call the IRS at 800-829-1040. IRS workers can help you if you do owe taxes.

Stay alert to scams that use the IRS as a lure. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.