Townsend Tax Services prides itself on our role as protectors of your tax information. Through our continuing education and vast resources from the IRS we can help you side step the worst of fraudulent scams and help you pay the least amount of tax possible under the law.
Preventing and Detecting Identity Theft
Your information can be stolen in many ways, from bogus IRS emails and unscrupulous return preparers to large scale thefts of information from banks, schools and hospitals. In the recent hacking of the IRS’s website, thieves apparently trolled social media to obtain answers to questions only taxpayers would know. IRS has now issued 1.5 million Identity Protection PINs, a unique number for victims of fraudulently filed returns to use when filing. Keep in mind IRS does not contact you by email, telephone, or knock on the door. Their first contact with you is always by U.S. mail.
Long Term Care
Approximately 70% of people turning age 65 can expect to use some form of long term care during their lives. On a happier note, you should know you can deduct these premiums!
Special Reporting for Foreign Accounts
IRS requires U.S. resident to report all worldwide income, including income from foreign accounts. In most cases, taxpayers only need to complete Part III of Schedule B answering few questions about these assets. If value of foreign accounts exceed $10,000 during year, taxpayer must file Report of Foreign Bank and Financial Accounts (FBAR). In addition, if value of assets exceeds certain higher thresholds, taxpayers may also need to file Form 8938. We can help you.
1099-C: What You Need to Know
Most people are in for a surprise when they receive a 1099-C, never realizing canceled debt is often treated just like any other ordinary income. Creditors record canceled debts on a form 1099-C, which is then sent to debtor and IRS. Some common triggers for receiving a 1099-C include canceled credit card debt, home foreclosure or short sale (which results in the sale of a home at a price below your mortgage), or if you haven’t paid a debt in the last three years and lender hasn’t tried to collect in the past year.
Form 1099K Mess
You may receive multiple 1099K forms from each payment processor you receive $600 or more in payments. The key is to understand you could be receiving lots of these 1099Ks even if you are not in business. According to IRS, this information needs to be reported. We can help you determine where to report this on your tax return.