Tax
"Today, it takes more brains and effort to make out the income-tax form than it does to make the income." ~Alfred E. Neuman
The income tax has made more liars out of the American people than golf has. - Will Rogers
"Taxes are one of the best inventions in the history of human civilization. I may be the only person who thinks that, but without taxes, civilization would collapse. How else do we pay for our military, roads, emergency services, schools, hospitals, and social programs? Liberals tend to hate military spending, conservatives tend to hate entitlement and social programs, and we all can argue those issues ad nauseum. But without taxes, government doesn’t function. Without a functioning government, life begins to look like a Mad Max movie. I’ll watch a postapocalypse movie—I don’t want to live in one. With the understanding that taxes are good, taxes are patriotic, and taxes are essential to civilization," From Monk to Money Manager: A Former Monk's Financial Guide to Becoming a Little Bit Wealthy---and Why That's Okay" by Doug Lynam
"Tax Notices: Penalty Removal Request. It’s the time of year where the IRS and state tax agencies send out tax notices for additional tax due, underpayment of estimated payments, etc. There are usually 3 components of the amount due on a tax notice: Tax liability, interest, penalty. A tip that I’ve passed along on the podcast that has been really effective for many members of the ChooseFI community is that you can request an "abatement" (removal) of the penalty. I’m always careful to say this is NOT tax advice to you personally – just what I’ve experienced anecdotally in my career. The key to an abatement request is to write a short letter (or fill out IRS Form 843) in response to the taxing agency explaining that you made an honest mistake, you did not intend to underpay your tax liability and you have taken steps to make sure it won’t happen in the future. If owed, you would also include a check for the tax liability and interest along with this abatement request letter. For specific language to include in your abatement letter, I found many examples by Googling the topic." Brad from ChooseFI
TAX TIPS:
Ask a CPA every 3 years to review your tax returns in order to find ways to save on taxes and be more tax efficient
Enroll in a FSA: Using an FSA can reduce your taxes. What is an FSA? A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. You don't pay taxes on this money. You can only get it through your employer. You put pretax money away to spend on qualifying medical expenses not covered by your health insurance. It helps you reduce your taxable income and cover healthcare costs. There is an end of the year deadline to spend this money. If you haven't spend all the funds for the year yet.... go to FSAstore.com - Official Site - Items Guaranteed FSA Eligible to see what qualifies. Almost everything sold on the site is elegible for FSA dollars.
Find free tax help: Taxhelp-Expert.com Stumped by income tax or want to know how you can get the most from your tax return? To ask your question, just fill out the questionnaire and submit. A tax expert will get back to you with an answer in 48 hours.
IRS Free File. Almost everyone can file their tax return electronically for free. The software does all the work of finding deductions, credits and exemptions. It's free for those who earned $72,000 or less in 2020. Some of the Free File packages also offer free state tax return preparation. Taxpayers who are comfortable filling out tax forms electronically can use Free File Fillable Forms, regardless of income, to file their tax returns either by mail or online.
Choosing a preparer. The IRS has several options for finding a tax preparer. One resource is Choosing a Tax Professional, which offers a wealth of information for selecting a tax professional. The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find preparers in their area who currently hold professional credentials recognized by the IRS or who have an Annual Filing Season Program Record of Completion.
Interactive tax assistant. This tool has recently been updated with answers to even more tax questions. It can also help a taxpayer determine if a type of income is taxable. Many people experienced changes to income and other life events in 2020. This tool can help them find tax credits and deductions.
Here’s What To Do if You Owe Taxes, but Can’t Pay (YouTube)
The IRS Doesn’t Tax These Income Sources
Tax season can be a bummer even though we know it’s coming every year. It seems like we owe the IRS a piece of every bit of money we get.
And thanks to higher interest rates, some people are remembering for the first time in years that interest earned on savings accounts and CDs is taxable.
However, as Kiplinger pointed out, there’s a long list of income that the IRS may not tax:
Financial gifts to/from individuals ($18,000 limit per person)Charitable gifts (get receipts, depends on if you take the standard deduction or itemize)
Employer-provided health insurance
HSA contributions
Inheritances (cash, property, etc. … income subsequently generated is taxable)
Life insurance proceeds (this can get complex)
Long-term care insurance payouts
Disability benefits
Municipal bond interest (with some exceptions)
Eligible seniors have many free tax filing options
Whether they prepare and file their own tax returns or get in-person help, there are easy, secure and free tax filing options for seniors.
In-person IRS help for seniors and low-income taxpayers
Eligible taxpayers can have their taxes prepared in person for free with these two programs:
Tax Counseling for the Elderly – The TCE program prioritizes taxpayers aged 60 and older. TCE specializes in questions about pensions and retirement-related issues unique to seniors.
Volunteer Income Tax Assistance – The VITA program is generally for people who make $60,000 or less, people with disabilities and limited English-speaking taxpayers. VITA assistance is often provided at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations.
To find a TCE or VITA site near them, taxpayers can use the site locator tools on the IRS Free Tax Preparation page of IRS.gov.
IRS Free File
Many seniors and retirees can file their taxes for free with IRS Free File at IRS.gov/freefile. The program offers online tax preparation software for taxpayers with adjusted gross income (AGI) of $79,000 or less in 2023.
With IRS Free File, leading tax software providers make their online products available for free. One is available in Spanish. IRS Free File partners set their own eligibility rules based on income, age and state residency.
With IRS Free File, taxpayers can:
Find the product that’s right for them with the Find Your Trusted Partner tool.
File Form 1040-SR for seniors over the age of 65 and find the most common forms that can be filed electronically.
IRS Free File products support mobile phone access. Taxpayers can do their taxes on their smartphone or tablet.
Free File Fillable Forms
Taxpayers with an AGI over $79,000 can use Free File Fillable Forms. Fillable Forms don't include guided preparation, so taxpayers need to be comfortable completing their own tax forms.
Veterans can file with MilTax
Certain veterans, military retirees and military survivors can file their taxes with MilTax online which is offered through the Department of Defense. With MilTax, eligible taxpayers can prepare and file their federal income tax returns and up to three state income tax returns for free.
IRS Direct File
Taxpayers in 12 states may be eligible to file for free with the IRS Direct File pilot, a new tax filing service from the IRS.
How to pay and get help with state and local taxes: State and local taxes can be just as complicated as federal income taxes. A wide variety of tax systems are in use and tax matters can get complex. It’s important to know: 1) They may calculate your taxes differently from the federal level. 2) What income your state taxes. 3) How your state collects money from residents and non-residents. 4) When your return is due. Your state tax deadline could differ from the federal due date.
Low to moderate income workers may be eligible for the Earned Income Tax Credit: The Earned Income Tax Credit is the federal government’s largest refundable tax credit for low to moderate income workers. Almost a third of those who qualify for the EITC became eligible for the first time this year due to changes in their marital, parental or financial status and may not realize they’re eligible. People who earned $63,398 or less in 2023 may be eligible for this valuable tax credit. Other workers at risk for overlooking the EITC include those: 1) Living in non-traditional homes, such as a grandparent raising a grandchild. 2) Whose earnings declined or whose marital or parental status changed. 3) Without children. 4) With limited English skills. 5) Who are veterans. 6) Living in rural areas 7) Who are Native Americans. 8) With earnings below the filing requirement. Taxpayers can check their eligibility and how much they qualify for at IRS.gov/eitc. The EITC is a tax credit for certain people who work and have low to moderate income. A tax credit usually reduces tax owed and may also result in a refund. To get the EITC, qualified workers must file a tax return and claim the credit. Eligible taxpayers should file a tax return to claim the credit even if their earnings were below the income requirement to file.
Filing a federal tax return even if it’s not required could put money in taxpayers’ pockets
Some people choose not to file a tax return because they aren't legally required to file, but they could be missing out on refundable tax credits or an income tax refund. This could apply to someone if they:
Have had federal income tax withheld from their pay.
Made estimated tax payments.
Qualify to claim refundable tax credits.
Don’t miss out on valuable tax credits
A few tax credits people can claim on a federal tax return if they’re eligible include:
Earned Income Tax Credit – The EITC helps workers who earned $63,398 or less in 2023 when they file a federal tax return. Taxpayers can use the EITC Assistant on IRS.gov to check their eligibility.
Child Tax Credit – Taxpayers can claim the Child Tax Credit if they had a qualifying child under the age of 17 at the end of 2023.
Credit for Other Dependents – Taxpayers who don’t qualify for the Child Tax Credit may qualify for the Credit for Other Dependents. This includes people who have:
Dependent children who are age 18 or older at the end of 2023.
Parents or other qualifying individuals they support.
Education credits – The American Opportunity Tax Credit is for qualified education expenses for the first four years of higher education. The Lifetime Learning Credit is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution.
Get help deciding whether to file
The Interactive Tax Assistant provides answers to many common tax law questions based on an individual's specific circumstances. It can help someone decide whether they should file a tax return and if they're eligible for many common tax credits.
The tool is safe. It keeps the user anonymous and discards the information they provide when they exit a tool.
E-file to get a refund faster
The fastest way to get a tax refund is to e-file and select direct deposit. The IRS issues most refunds for e-filed returns in less than 21 days.
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Taxpayer Advocate Service: Helping taxpayers navigate their IRS issues or concerns. The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights.
They can offer help when tax problems cause a financial difficulty. When the taxpayer has tried and been unable to resolve their issue with the IRS, or a taxpayer believes an IRS system, process, or procedure just isn’t working as it should. If taxpayers qualify for assistance, which is always free, TAS will do everything possible to help them.
TAS may be able to help taxpayers if they
Are experiencing financial hardship
Have experienced a delay of more than 30 days to resolve a tax account problem
Have not received a response or resolution to the problem or inquiry by the date promised by the IRS
Here's What To Do if You Owe Taxes, but Can't Pay (Youtube video)
How To Maximize Your Tax Refund
Who Should and Shouldn’t Get Help Preparing Their Taxes?
The IRS doesn't send tax refunds by email or text
The Rise and Fall of the 'Freest Little City in Texas' (this is why I don't mind paying taxes)
How to Pay Your Taxes English | Spanish | ASL
Shrink That Estate tax: Worried about federal and state estate taxes? Adam Grossman offers a handful of intriguing strategies—including some you may not have thought of.
23 Common Tax Deductions for Small-Business Owners
6 Ways to Reduce Your Property Taxes
Think you owe back taxes? Read this
How To Pay 0% Tax On Capital Gains Income
Offer in Compromise | Internal Revenue Service: An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability or doing so creates a financial hardship. We consider your unique set of facts and circumstances:
Wondering How to Teach Your Kids About Taxes? Consider the ‘Parent Tax’
Where You Should Never Put Your Tax Refund
What taxpayers should do when the receive Form 1099-K. http://ow.ly/k0kl50Nn2MY
Who Should and Shouldn’t Get Help Preparing Their Taxes?
How To Get a Faster Tax Refund
7 Ways To File Your Taxes for Free
How To Maximize Your Tax Refund
Get help filing your tax return
How To Plan for Taxes Throughout the Year
4 Ways To Get an Early Start on Preparing Your Taxes
What Is My Filing Status?: If taxpayers are confused about their filing status, they can use the What Is My Filing Status? tool Interactive Tax Assistant tool on IRS.gov. This tool can also help taxpayers who are eligible for more than one status find the one that will result in the lowest amount of tax.
#IRSTaxTip: IRS Free File can help first time filers with their tax returns. http://ow.ly/vNR350MChiL
#IRSTaxTip: Not too much, not too little - taxpayers should check if their tax withholding is just right. http://ow.ly/8awX50Ls2Ka
#IRSTaxTip: Reviewing tax credits and deductions now helps set taxpayers up for success at tax time. http://ow.ly/xQSK50LQhBl
#IRSTaxTip: Good recordkeeping year-round helps taxpayers avoid tax time frustration. http://ow.ly/uFCr50LQhxk
#IRSTaxTip: Understanding the Credit for Other Dependents. http://ow.ly/T1aq50MVNp0
#IRSTaxTip: Common mistakes international filers make using Free File Fillable Forms. http://ow.ly/Bwfi50MVNpT
Direct deposit your tax return
10 Year-End Strategies To Cut Your Tax Bill
How to Save Thousands with Accurate Home Tax Records
What You Need to Know About the Home Sale Exclusion and Your Taxes
Do you really need to pay income tax for *that*?: What Is Actually Considered Taxable Income?
Will Your Kids Inherit a Tax Bomb from You?
#IRSTaxTip: Taxpayers should be sure to have all their info before going to a tax pro.
#IRSTaxTip: What taxpayers should do if they get an identity theft letter from the IRS.
How To Feel Less Guilty About Paying No Federal Income Taxes
10 Ways to Put Your Tax Refund to Work
How to Choose a Tax Return Preparer
7 Money-Smart Ways to Spend Your Tax Refund
Best Tax Software for Investors
20 Most-Overlooked Tax Deductions, Credits and Exemptions
13 Tax Breaks for Homeowners and Home Buyers
33 States with No Estate Taxes or Inheritance Taxes
How All 50 States Tax Retirees
Calculating Taxes on Social Security Benefits
When to Change Tax Withholdings — and How to Do It
9 Ways to Save Money on Taxes in 2022
5 Things Your Accountant Wishes You Knew
8 Steps to Appeal Your Property Tax Bill
Who Should and Shouldn’t Get Help Preparing Their Taxes
Common tax return mistakes that can cost taxpayers.
How to Get a Faster Tax Refund
How to Get Your Tax Refund Faster
Most-Overlooked Tax Deductions and Credits for the Self-Employed
Early Retirement Tax Planning Checklist
How To Lower Your 2021 Tax Bill Before Jan. 1
How to Calculate AGI and MAGI & Why It Matters
Publication 1, Your Rights as a Taxpayer
Publication 4134, Low Income Taxpayer Clinic List
Want to Save on Taxes? Consider a Divorce!
Generation-Skipping Transfer Tax Basics
Tax-Savvy Expat – US Tax Services for expats
Greenback Expat Tax Services : Greenback offers a full range of expat tax services for Americans living abroad, including US expat tax return preparation, small business tax returns, Foreign Bank Account Reporting (FBAR), FATCA and individual consultations.
How South Dakota became a global tax haven
What Home Improvements Are Tax Deductible?
Self-Employed Individuals Tax Center
Small Business and Self-Employed Tax Center
Taxpayers can protect themselves from scammers by knowing how the IRS communicates
All taxpayers have the right to challenge the IRS’s position and be heard
13 Tax Breaks for Homeowners and Home Buyers
Get An IP PIN tool enables anyone who has an SSN or ITIN to get an IP PIN after they verify their identity through a rigorous authentication process. Taxpayers should review the Secure Access requirements before they try to use the Get An IP PIN tool.
#IRSTaxTip: What taxpayers need to know to claim the earned income tax credit. https://go.usa.gov/xAGVt
Here’s why taxpayers should have an IRS online account
How to Generate Tax-Efficient Retirement Income
Caregivers Should Consider These Tax Breaks
Here’s how saying “I do” can affect a couple’s tax situation
Here’s how people can pay their federal taxes
State-by-State Guide to Taxes on Middle-Class Families
What You Need To Know Before You DIY Your Taxes
5 Tips for Finding a Tax Preparer
VIDEO: Choose a Tax Preparer Wisely
26 States That Don’t Tax Social Security Benefits
#IRSTaxTip: Tips to help people choose a reputable tax preparer. https://go.usa.gov/xAhDR
20 Most-Overlooked Tax Breaks and Deductions
The Most-Overlooked Tax Breaks for Retirees
MILTAX: TAX SERVICES FOR THE MILITARY
So You Got a Letter from the IRS
11 Tax Breaks for the Middle Class
9 Types of Tax-Free Retirement Income
Tax Moves to Make Now (Yes, After Tax Day)
10 Questions Retirees Often Get Wrong About Taxes in Retirement
How to Use Your Tax Refund to Boost Your Finances
How Long Should I Keep My Tax Returns?
States With the Lowest Overall Tax Burden (Income, Property & Sales)
Taxpayers should file on time even if they can’t pay their full tax bill
8 Ways You Might Be Cheating on Your Taxes
10 Tax Breaks for the Middle Class
8 Awful Things That Can Happen If You Don’t Pay Taxes
New Agreement Makes It Easier to Find Free Tax Help | Money Talks News
Most Workers Don’t Know This Retirement Tax Credit Exists | Money Talks News
5 Clever Tax Shelters Anyone Can Use
Least Tax-Friendly States for Military Retirees
5 Ways to Cut Your Taxes in Retirement
How I Appealed My Ridiculous Property Taxes
Saver’s Credit: How To Get Free Money To Save for Retirement
The Saver's Credit is a tax credit for eligible contributions to your IRA, employer-sponsored retirement plan or Achieving a Better Life Experience (ABLE) account. You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan.
4 Essentials of Multistate Taxation
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How to Pay Less Taxes- A Very Cute Cartoon - Burrito Bowl Diaries
5 Things Your Accountant Wishes You Knew | The Dollar Stretcher
1040-SR: What you need to know about the new tax form for seniors ... a new simplified tax form ... a do it yourself with no need for a tax professional for senior citizens over 65 ... it takes only 4-6 minutes to complete.
How to Reduce Your Taxable Income
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Online or Tax Pro: Which Is Right for You?
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How Retirement Income Is Taxed
8 Steps to Take If You Can't Pay Your Taxes
How to Access all that Sweet Pretax Money Once You Retire
Most-Overlooked Tax Breaks for Retirees
How To Prevent And Resolve IRS Problems
Tax-Smart Ways to Lower Your RMDs in Retirement
Have a tax dispute with the IRS? These organizations can help
How Do You Compare to the Average Taxpayer?
The Amazing Tax Benefits of Semi-Retirement
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Free Tax Preparation Help If you need help with your taxes, visit the IRS website. There's a program called VITA (volunteer income tax assistance) that offers free basic tax return preparation to qualified individuals. The program offers help to people who generally make $57,000 or less, have disabilities and or are limited English-speaking taxpayers. Robin from Dollar Stretcher tips
https://www.supermoney.com/fresh-start-program-help-pay-taxes/
The Fresh Start Program helps make streamlined installment agreements more easily available to taxpayers. Setting up an installment agreement with the IRS may help you avoid some tax penalties.. If you owe $50,000 or less, the Fresh Start Program can help you pay your debt through monthly direct debit payments spread out over six years
Listen to 217| How to Save Thousands in US Federal Taxes Using Geo-arbitrage | David McKeegan on Apple Podcasts: David from Greenback Expat Tax Services explores the basics of taxes for expats. Learn about the rules surrounding expats taxes and strategies to consider. Listen to 217| How to Save Thousands in US Federal Taxes Using Geo-arbitrage | David McKeegan from ChooseFI on Apple Podcasts. https://podcasts.apple.com/us/podcast/choosefi/id1187770032?i=100047713853
How to Legally Hide Money from the Government FOREVER in 2021 (Roth Secrets Revealed) Money Guy Show Tax evasion is illegal, however, tax avoidance is highly encouraged. Roth accounts provide an outstanding opportunity for tax advantaged retirement savings and wealth building. This powerful investment vehicle was created to encourage everyone to save...Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast/money-guy-show/id121362031?i=1000509826560
How to Live Income-Tax Free in the USA (pt 2) ... and Make Money!
Radical Personal Finance Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast/radical-personal-finance/id896153632?i=1000516337024
Protect Yourself From Tax Fraud: Each year, thousands of people lose millions of dollars to tax scams. Scams take many shapes and forms, like phone calls, letters, or emails from Internal Revenue Service (IRS) impersonators. They claim a need to verify your personal information or use threats to bully you into paying a fabricated tax bill. They may even threaten to have you arrested if you do not pay up. Don’t fall victim to these tactics. Keep the following tips in mind:
The IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.
Contact the Treasury Inspector General for Tax Administration to report a phone scam at 1-800-366-4484 or online at the IRS Impersonation Scam Reporting web page.
The IRS will not threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
Understand Tax Season: Does teaching about taxes seem as intimidating as completing your own taxes? With IRS resources for teachers, it doesn’t have to be! Explore the Understanding Taxes lesson plans to choose the lesson content and activities that will resonate the most with your students
Learn From Tax Simulations: After you teach your students about taxes, take them through a virtual simulation to practice what they've learned. The tax simulation app allows kids to understand the tax process through the lens of 20 different taxpayers. They learn how to file taxes electronically through different income scenarios like claiming credits or submitting a return.
MoneyMath: Lessons for Life: As tax season approaches, you can teach your middle schoolers about financial literacy. Through real-life examples of personal finance, MoneyMath from the Treasury Department provides a free curriculum for teachers. It first explores careers, then students learn about income, taxes, gross income, saving, and net income in different fields.
How people can give back by becoming an IRS-certified volunteer : The IRS and its community partners are looking for people around the country to become IRS-certified volunteers for the upcoming tax season.
Tax tips for new parents
Kids are expensive. Whether someone just brought a bundle of joy home from the hospital, adopted a teen from foster care, or is raising their grandchild. There are several tax breaks that can help.
Here are some tax tips for new parents
Get the child a Social Security or Individual Tax Identification number
To claim parental tax breaks, the taxpayer must have their child or dependent’s Social Security number, Adoption Tax Identification Number or Individual Tax Identification number. Confirming a child’s birth is the only way the IRS can verify that the parent is eligible for the credits and deductions they claim on their tax return.
Check withholding
A new family member might make taxpayers eligible for new credits and deductions, which can greatly change their tax liability. They can use the IRS Withholding Estimator to check their withholding. Taxpayers should provide their employer with an updated Form W-4, Employee's Withholding Certificate, if they want to change how much tax is withheld from their paycheck.
Check eligibility for these tax credits and deductions
Child Tax Credit
Taxpayers who claim at least one child as their dependent on their tax return may be eligible for the Child Tax Credit. For help figuring out if a child qualifies for this credit, taxpayers can check Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?
Child and Dependent Care Credit
If taxpayers paid someone to take care of their children or another member of their household while they work, they may qualify for the Child and Dependent Care Credit regardless of their income. Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of their daycare expenses with certain limits.
Adoption Tax Credit
This credit lets families who are in the adoption process during the tax-year claim eligible adoption expenses for each eligible child. Taxpayers can apply the credit to international, domestic, private and public foster care adoptions.
Earned Income Tax Credit
The Earned Income Tax Credit helps low- to moderate-income families get a tax break. If they qualify, taxpayers can use the credit to reduce the taxes they owe – and maybe increase their tax refund.
Credit for Other Dependents
Taxpayers with dependents who don't qualify for the Child Tax Credit may be able to claim the Credit for Other Dependents. Taxpayers can use the Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents tool on IRS.gov to help determine if they are eligible to claim the credit. They can claim this credit in addition to the Child and Dependent Care Credit and the Earned Income Credit.
Homeowners: review these house-related deductions and programs
The summer months are a popular time to buy or sell a house. New homeowners should put reviewing the tax deductions, programs and housing allowances they may be eligible for on their move in to-do list.
Deductible house-related expenses
Most home buyers take out a mortgage loan to buy their home and then make monthly payments to the mortgage holder. This payment may include several costs of owning a home. The costs the homeowner can deduct are:
state and local real estate taxes, subject to the $10,000 limit.
home mortgage interest, within the allowed limits.
Taxpayers must itemize their deductions to deduct home ownership expenses.
Non-deductible payments and expenses
Homeowners can't deduct any of the following items:
Insurance including fire and comprehensive coverage and title insurance
The amount applied to reduce the principal of the mortgage
Wages paid to domestic help
Depreciation
The cost of utilities, such as gas, electricity or water
Forfeited deposits, down payments or earnest money
Internet or Wi-Fi system or service
Homeowners' association fees, condominium association fees or common charges
Home repairs
Mortgage interest credit
The mortgage interest credit helps people with lower income afford home ownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid. A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government. An MCC is issued only for a new mortgage for the purchase of a main home.
Homeowners Assistance Fund
The Homeowners Assistance Fund program provides financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services and also displacements of homeowners experiencing financial hardship after January 21, 2020.
Minister's or military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don't have to reduce their deductions based on the allowance.
Avoiding identity theft scammers posing as the IRS
Imitation may be the sincerest form of flattery, but when scammers pose as the IRS it means trouble for taxpayers. Identity thieves may contact taxpayers through fraudulent calls, emails, texts or social media messages pretending to be the IRS. Here are tips to help taxpayers know when the IRS is contacting them.
Letters and notices
A letter or notice is usually the first way the IRS will contact a taxpayer. When a taxpayer receives a suspicious letter or notice, they can check to see if it’s really the IRS:
Log in to their secure IRS Online Account to see if a copy of the notice or letter is in their file.
Review common IRS letters and notices at the Understanding Your IRS Notice or Letter page on IRS.gov.
Contact IRS customer service directly to authenticate it, if they weren’t able to authenticate in their online account.
Verify that any collection notice from a private collection agency has the same Taxpayer Authentication Number as the Notice CP40 the taxpayer received from the IRS. Taxpayers can visit Private Debt Collection Frequently Asked Questions to learn more about verifying a private collection agency.
Phone calls
After first mailing a notice or letter to a taxpayer, IRS agents may call to confirm an appointment or discuss items for a scheduled audit. Taxpayers should know that:
The IRS doesn’t leave pre-recorded, urgent or threatening messages. Scammers will tell victims that if they do not call back, a warrant will be issued for their arrest. Anyone making threats is a scammer.
Private collection agencies contracted by the IRS may call taxpayers to collect certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
The IRS and its authorized private collection agencies will never ask a taxpayer to pay using any form of pre-paid card, store or online gift card. Taxpayers can review the IRS payments page at IRS.gov/payments for all legitimate ways to make a payment.
Email, text and social media
The IRS doesn't first contact taxpayers by email, text message or social media channels to request personal or financial information. Some common electronic scams that thieves use are:
Sending phishing emails to taxpayers.
Posing as an IRS social media account to contact taxpayers about a fake bill or refund.
Texting taxpayers about fake “tax credits” or "stimulus payments."
These messages will often direct taxpayers to click fraudulent links they claim are IRS websites or other online tools. Again, the IRS will mail a letter or notice before calling or emailing, and it will never contact a taxpayer by social media or text message.
In person visits
The IRS recently ended most unannounced visits to taxpayers by agency revenue officers. Ending these unannounced visits to taxpayers will improve overall safety for taxpayers and IRS employees.
More information:
Secure tax payment options
Consumer alerts
Report phishing and online scams
Parents: Check eligibility for the Credit for Other Dependents
The Credit for Other Dependents is a $500 non-refundable credit available to taxpayers with dependents who are not eligible for the Child Tax Credit. Taxpayers can claim this credit in addition to the Child and Dependent Care Credit and the Earned Income Credit.
This information can help taxpayers determine their eligibility to claim this credit on their 2023 tax return.
This credit can be claimed for dependents who:
Are of any age, including those who are age 18 or older.
Have Social Security numbers or Individual Taxpayer Identification Numbers.
Are parents or other qualifying relatives supported by the taxpayer.
Live with the taxpayer but aren't related to the taxpayer.
Are U.S. citizens, nationals or resident aliens.
The credit begins to phase out when the taxpayer's income is above $200,000. This phaseout begins at $400,000 for married couples filing a joint tax return.
A taxpayer can claim this credit if:
They claim the person as a dependent on the taxpayer's return.
They cannot use the dependent to claim the Child Tax Credit or Additional Child Tax Credit.
Taxpayers can use the Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents tool on IRS.gov to help determine their eligibility.
More information
Income Tax guide from Consumer Reports
A tax preparer can cost between $150-$400 depending on the complexity of your return. Do it yourself software such as TurboTax, TaxCut or TaxACT cost between $10 to $75. For even greater savings you can file your taxes online. Taxpayers with adjusted gross incomes of $66,000 or less can use Free File at https://www.irs.gov/filing/e-file-options where they will pay nothing if they chose among several software providers.
The Salvation Army has a guide that lists price ranges for commonly donated items in order to get the tax deduction. The values apply no matter which charity is getting your donated items: http://salvationarmysouth.org/valueguide-htm/
Taxes - 360 Degrees of Financial Literacy is a national volunteer effort of the nation’s Certified Public Accountants to help consumers understand their taxes. 360 Degrees of Taxes has everything for tax season and beyond, all for FREE! This site, designed by CPAs, is here to help you find tax resources, tips, FAQs, checklists and much more. Check out the Ask-A-CPA section, where a real CPA will answer your individual questions. 360 Degrees of Taxes has everything you need to make small work out of filing. And with content being updated regularly, check back often.
Donate used cars, computers, household items in good condition such as clothing, furniture and toys and get a tax deduction. For more information see IRS Publication 526 and 1771, Charitable Contributions at www.irs.gov. To find charities in your area that accept donations, visit www.charitynavigator.org . If you don’t know what your used items are worth go to www.kbb.com (Kelley Blue Book) that provides free online prices for used cars based on vehicle’s mileage, condition and other factors. For used clothing and other household items go to the free online program TurboTax It’s Deductible at TurboTax® ItsDeductible - Track Charitable Donations for Tax ....
TAX HOLIDAYS
Some states have a variety of tax holidays, days when you can buy certain products without paying tax on them. Most of us are familiar with the school clothing/supplies holidays, but a few states are now doing hurricane and energy saving item tax holidays as well.
What to do if you haven't paid taxes in years
makes it easier for taxpayers to pay back taxes and avoid tax liens
TIP: If you owe IRS taxes, find an enrolled agent (license to appear before the IRS as a tax expert) to pay and settle with the IRS. Beware of ripoffs that say they will settle for pennies on the dollar. The enrolled agent will know what range to offer depending of the "IRS offer and compromise program". How many cents on the dollar the IRS is willing to accept is based on personal financial situation.
For more information contact the IRS