Tax Break

The five most common taxpayer questions answered

Filling out the 1040, New York City post office, April 15, 2010 REUTERS/Mike Segar

You’ve got a month left before the tax deadline — April 17 this year — and have you filed your taxes?

If typical patterns hold, more than one in four of us has yet to sign on the bottom line.  IRS numbers show more than 32 million individual income tax returns arrived after April 9 last year.

Preparing your taxes will take you, on average,  about 22 hours, according to the IRS.

Naturally you’ve got questions.

Here are the five most common questions that have been put to “Ask a CPA”  in the last week. A new app for iPhones and iPads, the app has answers to 2,500 tax-time questions, as well as a way to submit a question to a real-life CPA in your area for free. (Seems like a busy time for CPAs to be doing work pro bono, but founder Michael Rosedale, says they see it as a way to generate potential future customers.)

Tax clips from the Web: Kanye’s charity blunders, D.C. lobbyists and identity fraud

A Federal Trade Commission report listed identity theft as the top complaint from consumers in 2011 – for the 12th year in a row. Of those 280,000 complaints, about 24% were tax or wage-related. This is something of a stark wake-up call to the perils of our electronic lives, which can be hacked without our knowledge, right up until we hit the send buttons on our electronic tax returns, says Jonnelle Marte for Smart Money’s tax blog: “For some victims, the fraud isn’t discovered until they hit the send button on their electronic tax returns — and get a rejection note from the IRS. Other times it takes a little longer to know something is wrong, such as not receiving a refund check.”

If you have been unlucky enough to be hacked, correcting the error could take the IRS from 6-12 months, according to Marte.

Home on the range

Here is a quote from the author of the Tax Foundation’s annual rating of the states with the best tax climates -“The lesson is simple,” wrote study author Mark Robyn, “A state that raises sufficient revenue without one of the major taxes, all things being equal, has an advantage over those states that levy every tax in the state tax collector’s arsenal.”

Map of identity theft cases in January 2012

Criminal Investigation Activity January 2012A major IRS and Justice Department crackdown on identity theft shows how widespread and common it has become. Tuesday the tax collector announced that a national sweep had led to 69 indictments, targeting 105 people in 23 states,  including cases where people are alleged to have impersonated the dead, the mentally disabled and citizens of Puerto Rico in order to get their hands on millions in fraudulent tax refunds.

The government asserts that it stopped $1.4 billion in bad refunds last year, up from $262 million in 2010.

You can get a full version of the graphic by clicking on the map here or by going to the IRS site at http://www.irs.gov/pub/irs-utl/ci-idt-casemap.pdf.