When your identity is stolen, you have so many potential issues to deal with — changing passwords, closing accounts, dealing with fraudulent charges, and placing fraud alerts with the credit reporting agencies — that you may forget about potential tax fraud. Armed with your personal information, identity thieves can file a fraudulent tax return in your name and receive a refund before you realize your information has been compromised. Sometimes taxpayers are unaware of the breach until they have problems filing their taxes.
What do you do if you fall victim to tax-related identity theft? Start by responding to any IRS notice as instructed. Your first hint that there is an issue could be a notice from the IRS asking you to verify your identity because of a suspicious tax return with your Social Security number.
Who wants simpler taxes? Most of us do, assuming we also keep more money in the process.
Starting in 2018, homeowners are more likely to have simpler tax returns – but they may need to make similar tax calculations to ensure a lower tax bill.
Tax simplification was part of the pitch to sell the 2017 Tax Cuts and Jobs Act (TCJA) to the American public. To help achieve this goal, Congress raised standard deductions and reduced or eliminated several itemized deductions with the TCJA to encourage filers to take the standard deduction. Taxes are much simpler if you don't itemize, and there's no reason to itemize if your standard deduction is greater than your collective itemized deductions.
You anticipated a large refund on your taxes to pay off some bills and put some money away in a rainy-day fund. Unfortunately, the money never showed up. What happened?
Your refund may have gone toward an unpaid bill selected by the government – your unpaid student loan.
Your federal student loan is considered to be in default if you haven't made a payment in 270 days. When that happens, the federal government has the right to claim your tax refund as payment against the debt, in a process known as an administrative offset. In essence, the government isn't giving any tax refunds back to you if you aren't attempting to repay what you already owe the government.