January 2025

Is It Really The IRS?

We are once again entering tax season. With tax season comes a flurry of tax scams. One of the most nerve wracking is a phone call or voice mail claiming to be from the IRS saying you owe money or there is a problem with your tax return. But is it really the IRS calling?

Chances are this is a scam. Rarely is your first contact from the IRS by phone. Generally, when there is an issue, the IRS sends you a notice through the mail. You can verify this it is an actual IRS notice by searching the notice number or letter number at IRS.gov. The IRS notice number or letter number is on the right side of the document.

The IRS will not leave a vague yet threatening voice mail. Threats to turn your file over to law enforcement or to suspend your driver’s license are meant to scare you into acting before thinking. Also beware of anyone telling you to pay a tax bill using prepaid gift cards. This is a big red flag that it’s a scam.

So you received one of these calls. What do you do? If it’s a voice mail, do not return the call. If you answered the phone and find yourself speaking to someone, hang up. If you have any reason to believe the IRS may actually be trying to contact you, call the IRS at 1-800-829-1040.

To read about other common tax scams, check out the Dirty Dozen tax scams on the IRS website.

Have you received a notice from the IRS? Contact Haber Tax Solutions for a free 30 minute consultation to discuss your options.

What Do You Mean I Owe?

When tax season rolls around, everyone wants that big refund but some of us are in for a nasty surprise. You’ve gathered all your documents, you’ve made the tax prep appointment, then the tax return is done, and – surprise – you owe the IRS. You never owed taxes in the past. You always got a refund. How did this happen?

One common reason is a change in filing status. Family situations change over time. For example, a married couple divorces or a child graduates from college and can no longer be claimed as a dependent. The standard deduction is based on filing status. A change in filing status can cause the standard deduction to drop significantly, which in turn may mean a higher adjusted gross income and tax rate.

Switching from itemizing deductions to taking the standard deduction can create a situation where you owe. The Tax Cuts and Jobs Act of 2017 suspended or limited a number of common itemized deductions, creating a situation where some taxpayers were taking the standard deduction for the first time.

Another common reason is taking a second job or starting a business. Anything that significantly changes your income, particularly by increasing income, may cause tax consequences.

You can’t change what occurred in 2024, but what can you do now so you don’t owe next year?

If you are a W-2 employee, talk to your employer’s HR department about your W-4 withholding. Make sure your W-4 is filled out using your correct filing status. You may also want to consider increasing your tax withholding. Your W-4 gives you the option of having additional tax withheld each paycheck. Having a few extra dollars taken out each paycheck may make the difference between owing and getting a small refund.

Another option is to make estimated tax payments. Generally, this is done as 4 payment, one each quarter. It usually is based on what you owed for last year’s taxes or what you expect to owe for this year’s taxes. This is particularly important for self-employed taxpayers.

Depending on your situation, there may be other options to stop owing and start getting that refund again.

A little planning can go a long way. If you’re not sure where to start, set up a tax planning appointment at Haber Tax Solutions.