Monday, August 28, 2017

IRS Issues Urgent Warning: Beware IRS/FBI Ransomware Scam


Avoid a new phishing scheme that impersonates the IRS and the FBI as part of a ransomware scam to take computer data hostage.


The scam email uses the emblems of both the IRS and the Federal Bureau of Investigation. It tries to entice users to select a “here” link to download a fake FBI questionnaire. 

However instead of a questionnaire the link downloads a certain type of Trojan Horse type of malware called "ransomware" that prevents users from accessing the data stored on their computer/device unless they pay a money ransom to the scammers.

“This is a new twist on an old scheme,” said IRS Commissioner John Koskinen. “People should stay vigilant against email scams that try to impersonate the IRS and other agencies that try to lure you into clicking a link or opening an attachment.  People with a tax issue won’t get their first contact from the IRS with a threatening email or phone call."

IRS YouTube Videos:


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Monday, August 21, 2017

Need To Amend Your Personal Tax Return? File Form 1040X


File an amended tax return to correct information that changes tax calculations.  This includes making changes to filing status and dependents, or correcting income credits or deductions.

Don’t file an amended return to fix math errors because the IRS will correct those.


The IRS offers tips on how to amend a tax return:
  1. File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct errors to an original tax return the taxpayer has already filed. Taxpayers can’t file amended returns electronically. Mail the Form 1040X to the address listed in the form’s instructions.

  2. Preparing Form 1040X. Many taxpayers find the easiest way to figure the entries for Form 1040X is to make the changes in the margin of the original tax return and then transfer the numbers to their Form 1040X. Taxpayers should be sure to check a box at the top to show the year they are amending. Form 1040X will be the taxpayer’s new tax return, changing the original entries to include new information. Taxpayers should explain what they are changing and why on the second page of Form 1040X in Part III.

  3. Know when to amend. Taxpayers should amend a tax return to correct their filing status, the number of dependents or total income. They should also amend to claim deductions or credits not claimed or to remove deductions and credits they are not entitled to on the original return. The instructions for Form 1040X, Amended U.S. Individual Income Tax Return, list more reasons to amend a return.

  4. Know when NOT to amend. In some cases, it is not necessary to amend a tax return. Taxpayers should not worry about math errors because the IRS will make the correction. Taxpayers do not need to amend their return if they forgot to include a required form or schedule. The IRS will mail a request to the taxpayer, if needed.

  5. Use separate forms for each tax year. Taxpayers amending tax returns for more than one year will need a separate 1040X for each tax year. Mail each tax year’s Form 1040X in separate envelopes. See "Where to File" in the instructions for Form 1040X for the correct address.

  6. Include other forms or schedules. If a taxpayer makes changes to any form or schedule, they should attach them to the Form 1040X when filing. Not doing so could cause a delay in processing.

  7. Wait to file for corrected refund for tax year 2016. Taxpayers should wait for the refund from their original tax return before filing an amended return. It is okay to cash the refund check from the original return before receiving any additional refund. Amended returns can take up to 16 weeks to process.

  8. Pay additional tax. Taxpayers filing an amended return because they owe more tax should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.

  9. File within three-year time limit. Generally, to claim a refund, taxpayers must file a Form 1040X within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax, whichever is later. For taxpayers who filed their original return early (for example, March 1 for a calendar year return), their return is considered filed on the due date (generally April 15).

  10. Track your amended return. Taxpayers can track the status of an amended return three weeks after filing. Go to “Where’s My Amended Return?” or call 866-464-2050.
Get Form 1040X on IRS.gov/forms at any time.

Additional IRS Resources:
IRS YouTube Videos:

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Friday, August 11, 2017

IRS Tax Tips For Starting A New Business

 

If summer plans include starting a business, be sure to visit our detailed information page for entity selection, formation, and startup considerations.



New business owners may also find the following five IRS tax tips helpful:

1. Business Structure.  An early choice to make is to decide on the type of structure for the business. The most common types are sole proprietor, partnership and corporation. The type of business chosen will determine which tax forms to file.

2. Business Taxes. There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax a business pays depends on the type of business structure set up. Taxpayers may need to make estimated tax payments. If so, use IRS Direct Pay to make them. It’s the fast, easy and secure way to pay from a checking or savings account.

3. Employer Identification Number (EIN).  Generally, businesses may need to get an EIN for federal tax purposes. Search “EIN” on IRS.gov to find out if the number is necessary. If needed, it’s easy to apply for it online.

4. Accounting Method.  An accounting method is a set of rules used to determine when to report income and expenses. Taxpayers must use a consistent method. The two most common are the cash and accrual methods:

a. Under the cash method, taxpayers normally report income and deduct expenses in the year that they receive or pay them.
b. Under the accrual method, taxpayers generally report income and deduct expenses in the year that they earn or incur them. This is true even if they get the income or pay the expense in a later year.
Get all the basics of starting a business on IRS.gov at the Small Business and Self-Employed Tax Center.

IRS You Tube Videos: 
  • IRS Small Business Self-Employed Tax CenterEnglish
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