Tax scams are more and more common every day. As the economy continues to struggle, more and more people are trying to find an easy dollar. The IRS is constantly trying to stop tax scams, crimes that hurt not only the IRS but ultimately hurt YOU the tax payer. By recognizing various tax scams you can help prevent them and report them. Participation on a tax scam can result in prison time and fines not to mention repayment of taxes with penalties and interest. Here are a few of the most common tax scams. If you are a victim of or witness to one of these scams make sure that you report them to the appropriate contact shown here. Abusive tax schemes can take a multitude of forms. They can include anti-tax law, misstatement of a home based business, trust fraud, and fraudulent off-shore activities. One of the most common forms is the preparation on fraudulent tax returns. By misstating income, deductions, and taxes paid, people have found a way to show mammoth tax refunds with hopes that the IRS won’t catch their errors and will pay the refund. There have been a number of cases in recent years where people claimed refund in the MILLIONS of dollars. Retirement plans are also a common source of tax fraud. People may report fraudulent withdrawals and/or contributions in an effort to gain a tax benefit. Finally, one of the great benefits that the IRS provides are those to tax exempt organizations. In many cases these are charities. While the benefits are wonderful and meant for those who need them the most, this has not stopped criminals from taking advantage of those and forming fake or fraudulent organizations. Keep in mind that these are just a few of the many ways criminals make an effort to trump the system. If you become aware of any of these scams make sure to report them to the IRS ASAP. Remember, these types of crimes hurt us all.

Typically during the hot months of summer or during the cold months of winter energy prices tend to soar. Nothing is more upsetting than receiving an electric bill that looks more like a brand new car payment! Rather than just paying the bill, many people are considering alternative sources of energy. The best part about it is that there is a tax credit available to help you save money on your tax return. The residential energy efficient property credit is still available to help pay for qualified residential alternative energy equipment. The equipment includes solar hot water heaters, solar electricity equipment and wind turbines. The credit runs through 2016 and is 30 percent of the cost of qualified property. There is not a cap on the amount of credit available, except for fuel cell property. Generally, you can include the cost of labor and the best thing is you can carry forward any unused credit amounts to future years. Qualified equipment must be installed on your home located in the United States. Before you buy, make sure you have the manufacturer’s tax certification statement. Energy bill fluctuations can be a pain but the residential energy efficient property credit could save you money down the road. For more information on this tax credit, visit our Knowledgebase here.

The American Opportunity Tax Credit is set to expire after December 31, 2012 unless it is extended by Congress. The American Opportunity Tax Credit is a refundable tax credit for undergraduate college expenses. The credit provides up to $2,500 in tax credits on the first $4,000 of qualifying education expenses. Up to 40% of the credit is refundable, meaning that it can generate a larger refund. If you qualify, the American Opportunity Tax Credit can be used to offset higher education expenses paid in 2012. The American Opportunity Tax Credit provides qualified students or eligible parents with a great tax deduction. During this summer break, eligible tax payers need to ensure they are set to receive the full benefit of the tax credit. Eligible tax payers should consider paying their 2013 tuition expenses in 2012 in order to receive the full entitlement of the American Opportunity Tax Credit before it expires. For more information on this tax credit, visit our Knowledgebase here.

We are extremely proud of the men and women of the United States Military. Service members and their families sacrifice a lot and face unique obstacles thrown at them daily. Understanding all of this, TaxSlayer.com wants to ensure they understand special tax benefits that are available to them. We want them to be aware of 9 commonly missed tax benefits: 1. Moving Expenses You may be able to deduct some of your unreimbursed moving expenses, if you are a member of the Armed Forces on active duty and you move because of a permanent change of station. You can also deduct moving expenses if you are out of the military and your move is closely related to the start of a new job location, and you meet certain tests. 2. Combat Pay Most enlisted military personnel or warrant officers know that if they serve in a combat zone for any part of a month, that all their pay received for military service during that month is not taxable. Military officers are eligible to receive tax free pay as well but it could be capped at the highest enlisted pay, plus hostile fire or imminent danger pay received. One little known fact is you can elect to include your nontaxable combat pay in your ‘earned income’ for purposes of claiming the Earned Income Tax Credit. 3. Extension of Deadlines Qualifying members of the military can get an automatic extension for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS. 4. Military Uniform Cost and Upkeep You can deduct the cost and upkeep of uniforms that military regulations prohibit you from wearing when off duty. If you receive any allowance or reimbursement for the services you receive you will need to reduce your expenses by those amounts. 5. Joint Returns A power of attorney may be used on joint income tax returns if one spouse is unavailable due to military duty. 6. Travel to Reserve Duty If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties. 7. ROTC Students Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable. 8. Job hunting expenses You may be able to deduct some costs you incur while looking for a new job after separating from the military. Expenses may include travel, resume preparation fees, and outplacement agency fees. 9. Forgiveness of Decedent’s Tax Liability Tax liability can be forgiven, or if already paid, refunded, if a member of the U.S. Armed forces dies while in active service in a combat zone; from wounds, disease, or other injury received in a combat zone; or from wounds or injury incurred in a terrorist or military action. If filing a joint return only the decedents part of the joint income tax liability is eligible for the refund or tax forgiveness.