New Fraud Targets Tax Professionals

New Fraud Targets Tax Professionals; segment by the outstanding folks at Nightly Business Report:

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For more on tax fraud / scams, check out the 2018 IRS Dirty Dozen.

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No E-File for Those Taking Advantage of The New Homebuyer Tax Credit

I hate doing my taxes. I loath it. It's a huge waste of my time dealing with a tax code that seems to be bloated just for the sake of being bloated (to keep tax attorneys and accountants fat.) I don't hate tax attorneys, nor do I hate accountants. I just hate the tax code and the system that perpetuates it's insanely oppressive nature.

I'd pay someone or a firm to do my taxes for me, except I don't want to spend the money. Even more critically: if there's one thing I want to have full control over in my business life, it's my taxes.

I use the online version of TurboTax. Been using it for many years, and have been quite happy with it. However, there was an unexpected problem last year. TurboTax screwed up my state taxes, and when I contacted Intuit on 3 separate occasions about a refund, they made excuses, and I'm almost certain that they lied to me. I had to contact my credit card company to get a chargeback. Needless to say, I don't use Turbo Tax to do my state taxes anymore, and if a competitor comes out with a better product, I'll use it for my federal taxes.

If anyone has any experience with the HR Block offering, or any other competing tax software, please post a comment!

You Can't E-file if You Took Advantage of the New Homebuyer Tax Credit

E-file is great, as it makes the whole crappy business of doing your taxes a bit more efficient. However, for those who want to take advantage of the generous First-time Homebuyer Tax Credit which Uncle Sam instituted to help the struggling housing market, you won't be able to e-file your taxes. You'll have to print out your docs and sign and mail stuff the old fashioned way. Yuck! Sucks, but that's just the way the IRS wants to do it. Here a short clip from the folks at TurboTax:



Before I go, just wanted to add this: if you're worried about getting audited, and you make less than $200,000, you should really stop worrying. Click here to read this article.

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Losing Track Of Student Loans Can Wreak Havoc On Your Personal Finances

While having a big family is a wonderful blessing in and of itself, it’s especially rewarding during tax season. Don’t get me wrong; I value my family infinitely more than a tax refund, but it feels good to know that my commitment to my marriage and children is recognized by our government when tax time rolls around. We had twins last year, so when my husband and I realized that we would get a Child Tax Credit for both of them, we thought that was pretty nice. After deductions, we expected a return in the thousands, so we were happy campers.

During that same time, however, we were dealing with a frustrating issue that did not put smiles on our faces at all. Somehow, when I consolidated my federal student loans, one of them was not included. I didn’t understand how it could have happened, considering how informed the consolidation company was. Loan consolidators do all of the hard work for you - they call you out of the blue, offering to make your life easier by combining your student loans with a great interest rate and anything else you need, including forbearances. As they are explaining everything to you at the speed of light, they list all of your outstanding loans and help you to understand why making one easy monthly payment would ease your anxieties about student loan debt. They’re right; it does. So, I agreed with them and consolidated my loans. They reviewed the information with me again, reading back the information on each smaller loan that would be merged together into the big loan. So, I thought everything was taken care of.

And then we found the one that got away.

Actually, the one that got away found us; once the creditor discovered I had moved and gotten married, they politely called to let me know that I owed them money for a small student loan. It took a while to figure out what happened, but when we did, my heart sank. I was so young and I took out so many small loans while I was in school that I hadn’t been keeping track of them properly. So, when the consolidators did not have their facts and figures right, I should have been able to correct them, but I wasn‘t. I ended up with a defaulted loan because it went unpaid and unnoticed for quite some time. As many young Americans know, having a student loan in default is guaranteed to bring a lot of unwanted phone calls, anxiety, and grief that we did not want. One artist was so encumbered by Sallie Mae that he wrote a song about it:



So, we did everything we had to do to bring that loan back to current status, although it didn't happen until around the time we filed our taxes for the year. Thinking that everything was settled, we filed and waited, only to learn that the creditor had not reported the updated status of the loan, so our entire federal refund would be garnished to settle the debt.

Needless to say, that knocked the wind out of my sail.

Lots of people depend on their federal tax returns each year to cover large expenses or to revive their personal finances. However, outstanding student loans, if they are not current or at least in forbearance, can cause your federal income tax refund to be garnished. Although what we lost was actually enough to pay off the debt and would release us from it, we couldn‘t help but feel blindsided. Our tax preparer told us that we could have appealed the situation, considering that the return was garnished unnecessarily. We decided to just let it go. Although we mourned the loss of our beloved tax return, debt freedom, much like family, is simply too great a commitment to take lightly.

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Losing Track of Student Loans Can Wreak Havoc On Your Personal Finances

While having a big family is a wonderful blessing in and of itself, it’s especially rewarding during tax season. Don’t get me wrong; I value my family infinitely more than a tax refund, but it feels good to know that my commitment to my marriage and children is recognized by our government when tax time rolls around. We had twins last year, so when my husband and I realized that we would get a Child Tax Credit for both of them, we thought that was pretty nice. After deductions, we expected a return in the thousands, so we were happy campers.

During that same time, however, we were dealing with a frustrating issue that did not put smiles on our faces at all. Somehow, when I consolidated my federal student loans, one of them was not included. I didn’t understand how it could have happened, considering how informed the consolidation company was. Loan consolidators do all of the hard work for you - they call you out of the blue, offering to make your life easier by combining your student loans with a great interest rate and anything else you need, including forbearances. As they are explaining everything to you at the speed of light, they list all of your outstanding loans and help you to understand why making one easy monthly payment would ease your anxieties about student loan debt. They’re right; it does. So, I agreed with them and consolidated my loans. They reviewed the information with me again, reading back the information on each smaller loan that would be merged together into the big loan. So, I thought everything was taken care of.

And then we found the one that got away.

Actually, the one that got away found us; once the creditor discovered I had moved and gotten married, they politely called to let me know that I owed them money for a small student loan. It took a while to figure out what happened, but when we did, my heart sank. I was so young and I took out so many small loans while I was in school that I hadn’t been keeping track of them properly. So, when the consolidators did not have their facts and figures right, I should have been able to correct them, but I wasn‘t. I ended up with a defaulted loan because it went unpaid and unnoticed for quite some time. As many young Americans know, having a student loan in default is guaranteed to bring a lot of unwanted phone calls, anxiety, and grief that we did not want. One artist was so encumbered by Sallie Mae that he wrote a song about it:



So, we did everything we had to do to bring that loan back to current status, although it didn't happen until around the time we filed our taxes for the year. Thinking that everything was settled, we filed and waited, only to learn that the creditor had not reported the updated status of the loan, so our entire federal refund would be garnished to settle the debt.

Needless to say, that knocked the wind out of my sail.

Lots of people depend on their federal tax returns each year to cover large expenses or to revive their personal finances. However, outstanding student loans, if they are not current or at least in forbearance, can cause your federal income tax refund to be garnished. Although what we lost was actually enough to pay off the debt and would release us from it, we couldn‘t help but feel blindsided. Our tax preparer told us that we could have appealed the situation, considering that the return was garnished unnecessarily. We decided to just let it go. Although we mourned the loss of our beloved tax return, debt freedom, much like family, is simply too great a commitment to take lightly.

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My Personal Economic Stimulus

With tax season here and Bush's economic stimulus check on it's way (one day), I can see myself buying lots of great things I might not otherwise purchase without a lump sum of money at my disposal.

I think we all have such daydreams -

However, when I come back to reality, I realize that such splurging would be unwise. My husband and I are going to revitalize our savings, take care of some small remaining debts, and then get some necessities for the kids. And maybe a nice meal at a swanky restaurant.

That's it.

Consumer borrowing is up, up, up, and the outlook is so bleak that the Fed is helping banks hit by the mortage lending crisis by auctioning fresh cash so that short term borrowing isn't disproportionately funded by credit card debt. Apparently, many of us are carrying even more credit card debt because home refinancing is down. Strapped for cash, people are just charging it.

However, those of us with growing families, good jobs, and businesses (home businesses, too) should do well during refund season, helping to bring balance back to our personal finances. We are going to be as responsible as we can with ours. That's an economic stimulus that will continue to pay off in the future.

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