Tax Time: Do You Live for Your Refund?

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It took me up until last year to stop being one of those people that "live" for tax refund time.  Yes, I used to be one of those people that rushed to do my tax return so I could get my refund during the first run of deposits.  I used to always have to catch up on bills and buy or repair a car.  Some of the funds went to shopping but not much, cause I'm always balling on a budget.

I remembered something my dad had told me years ago, "I don't need the government to hold my money for me."  What he meant was that he liked getting his money throughout the year and breaking even or only owing a small amount when it was time to file his tax return.  It took me 20 years to do it but I went in and changed my W-4 so I would get more of my check each pay day.  There's a calculator on Irs.gov that I used to keep up with what I paid in federal tax and what I will have to pay by April 15, if I didn't make changes by December 31.

image from money.usnews.com

This year I will have a small balance to pay but next year I plan to break even, they won't owe me and I won't owe them.  Which is great to me.  I've gotten to the point where I can save money on my own and I hope to continue to do so.  My savings account actually has more than $50 in it for a change and it feels good.

I don't think I'll miss getting refunds because I was never one of those people that got those extra large refunds of $4,000 or more.  I wasn't hounding the mail man or the teller at my bank about when my money was coming. No going on Facebook crying about how much I need my money to keep my lights from getting cut off or my car from getting repossessed.

Freedom from yelling, "I want my money and I need it now," feels so good.

Tax Time: Beware of Tax Scams

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Usually most of the things discussed in our meetings at my day job are top secret but we were given permission to talk about this particular matter.  TAX SCAMS

Just so you know, I'm an Internal Revenue Service employee.  I usually don't tell people that but since I'm coming to you guys in somewhat of an official capacity, here's full disclosure.  As an IRS employee, I'm in a unique position to inform my family, friends and social media acquaintances about the aggressive and sophisticated scams from criminals claiming to be from the IRS and Department of Treasury.

Scams can take on various forms but the most common is when the perpetrators tell victims that they owe money, which they can pay through a pre-paid card.  IRS is old school and would rather receive money orders, personal and cashiers checks.  Sometimes the scam artists may tell the victim that they are due a refund but this is just an attempt to obtain personal information from the taxpayer, namely their social security number.

These scammers often threaten victims with warrants for their arrest.  

Just so you know, the IRS will never:

• Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
• Require you to use a specific payment method for your taxes, such as a prepaid debit card.
• Ask for credit or debit card numbers over the phone.
• Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
• Use email, text messages or any social media to discuss your personal tax issue.

Please believe, no one from IRS will inbox you on Facebook saying that you need to make a payment or they will send the po po to your house or place of business.

If you or someone you know receives a call from somebody claiming to be from the IRS asking for money or personal information, such as a bank account or Social Security number, report it to:

• TIGTA at 800-366-4484 or at www.tigta.gov and
• The FTC using its FTC Complaint Assistant (add "IRS Telephone Scam" to the comments).

If you do believe that you owe taxes, you should call the IRS at 800-829-1040 for help.

For more information on tax scams, visit the Tax Scams/Consumer Alerts page on www.irs.gov and the IRS Youtube and Tumblr pages.  Search "scam" to find all the scam-related posts.

Tax Time: Know Who You Owe

Taxpayers, please keep in mind that if you owe back child support, student loans or back taxes to state or federal entities—they will get their money. Please don’t curse out H&R Block, Jackson Hewitt or even Internal Revenue Service, because you were expecting a $4,000 to $7,000 refund but were told that your refund will be reduced or completely offset because you owe a government agency.

I haven’t worked in the toll-free customer service department at IRS in 10 years, but I still remember getting cursed out on a daily basis. Based on a few conversations with my co-workers, things have gotten worse because of the recession.

As a newbie in the department, I dealt with the taxpayers that were expecting a refund and transferred the more complicated calls to the more experienced tax examiners. People would call to see if their returns have been processed and to find out when they could expect to receive the check or direct deposit. Most of the calls I handled ended on a happy note, but it never failed, by the end of the day, I always got at least two irate callers that were mad at me (at IRS, at the government, at their baby’s mama or daddy) because their money was going to be used to pay old debts. I used to get cursed out so bad that I cried. Not necessarily because they hurt my feelings, but because I couldn’t curse them out back.

Just so there won’t be any misunderstandings, I’m going to spell it out for those that may end up in this situation one day.

• If you have been ignoring those delinquent/default letters from Sallie Mae—your refund may be offset.

• If you know you haven’t made your child support payments in a while—your refund may be offset.

• If you owe state or federal taxes from a previous year—your refund may be offset.

• If your spouse owes any of these government entities—your refund may be offset—only if you do not file an Injured Spouse Claim (Form 8379) with the IRS.

If the IRS ever does reduce or offset your refund, you will get a letter in the mail letting you know how much money was sent to pay your debt. If there is any money left over, you will receive it by check or direct deposit.

Just in case you’re curious, you can either call your debtor or the Department of Treasury’s Financial Management Service (1-800-304-3107) ahead of time, just to see if your file has been submitted for a tax refund offset.

So if you call IRS, and the nice lady tells you, “I’m sorry but your refund has been offset to pay a debt owed to a federal agency,” just say “DAMN” and get off the phone. If you didn’t know you owed somebody, you should have.