Deducting Your Travel Expenses

If you are commuting or traveling for business, the IRS will normally allow you to list travel expenses in your itemizations. Whether the expense was incurred locally or globally, you can still deduct a portion. Nonetheless, knowing when deductions are allowed and how much to deduct can prove difficult.

If your employer is reimbursing your expenses, you are not allowed to deduct them. Employers are also allowed to pay “per diem” rates per month. You cannot deduct more than the per diem rate per day from your taxes. This rate fluctuates based on the city. Current rates are $172 per day for any low-cost locality and $259 for any high cost locality. This includes the cost of lodging, meals and incremental expenses. Instead of reimbursing employees for actual business expenses, employers can choose to reimburse employees for these amounts. The first and last day of the trip are reimbursed at 75% … Read More

IRS Scrambling as Refunds Vanish

With digital crimes such as identity theft becoming more and more common, government agencies like the IRS are frantically trying to protect themselves and U.S. citizens. But it isn’t easy. Organized crime groups have begun to be more cooperative with one another, turning once small attacks into “epic wave[s] of fraud”, according to Alabama revenue commissioner Julie Magee.

Tax identity theft (which the IRS is battling) occurs when a person’s social security number (SSN) is compromised by thieves. When thieves steal an SSN, there are two common outcomes. First, they can use the number and attempt to file for a refund before the taxpayer. If successful, this means that the taxpayer will not receive a refund when he or she files since the system has already paid out the money owed. Second, a thief could apply for employment with the stolen SSN. If they obtain the job, it usually causes the … Read More

The IRS Dirty Dozen

Each year, the IRS releases a list of the 12 most common scams that taxpayers may encounter during tax season. Here’s a run-down of the top scams of 2014 and how you can protect yourself.

1. Identity theft

How it works: Someone gets ahold of your personal information—such as your social security number—and commits fraud in your name. They may even file a tax return in your name to get a refund.

How you can protect yourself: Keep your info private by using encrypted passwords online and shredding personal paperwork when you no longer need it. If you think your identity has been stolen, contact the IRS Identity Protection Specialized Unit at 800-908-4490.

2. Telephone scams

How it works: Callers pretend to be from the IRS in order to steal money and personal information. They often say that you owe money and may be arrested if you don’t pay.

How you … Read More