Experts Warn To Watch For Pitfalls During Tax Preparations
PITTSBURGH (KDKA) — Your federal tax return is due at the IRS in less than seven weeks.
Have you filed your taxes yet?
“No, I haven’t,” is the common response.
Which makes it a good time to remind taxpayers of the pitfalls common during tax season — like phishing — an email claiming to come from the IRS designed to get you to provide personal financial information.
“The IRS will not initiate contact with taxpayers via email or other social media platforms to ask for things, sensitive information,” Jennifer Jenkins, an IRS spokesperson, told KDKA money editor Jon Delano.
Jenkins warns that opening any attachments to that fake IRS mail can also invite malware.
“It may download a virus or something like that to your computer.”
Another major pitfall — fly by night tax preparers.
“I go to a reputable place, a place that I’ve been going for a while. I trust them.” said one taxpayer.
That’s good because you should pick a tax preparation service like you pick a personal doctor.
Those who don’t often get burned.
“Sometimes an unscrupulous tax return preparer will come up with fictitious income to allow an individual to claim certain tax credits that they may not otherwise be eligible to claim,” noted Jenkins.
And watch out for those tax anticipation schemes.
Some charge unnecessary fees to advance your tax refund before the IRS has issued the refund.
“You want to make sure that it is someone who is not a fly-by-night character,” Jenkins said.
Another pitfall — tax deductions.
For many taxpayers in tough economic times there’s a temptation to inflate the deductions claimed on Form 1040.
“I think everyone is tempted, but it’s not worth it — that’s for sure,” noted one taxpayer.
But there’s one common tax deduction that can trip any of us — non-cash contributions to a charity like the Salvation Army, St. Vincent de Paul, or Goodwill.
While many donate clothes and household items, Bob Seiling of Mt. Lebanon donated furniture to Goodwill.
Folks give all kinds of things to their favorite charities, and those donations may be tax deductible.
But how do you know how much the product is worth so you don’t get in trouble with the IRS?
“That’s a tough question,” said Seiling. “I have no idea really.”
Reputable charities will give you a receipt for the goods — but not a dollar amount. That’s up to the donor.
“They’re in charge with coming up with the value,” said Goodwill’s Krystal Wagner. “They can claim fair market value.”
To help the taxpayer, charities like Goodwill have a list of suggested values on their website.
And, most importantly, keep a precise list of what you gave.
“The IRS exam folks would be asking to see documentation to show that you donated 15 shirts,” noted Jenkins.
With the average refund check so far this year up over last year at $3,300, watching these pitfalls may help you enjoy without worry of an audit.