It’s been said that death and taxes are the only things you can count on in life, but don’t forget about con-artists, who you can always count on to pop up whenever money changes hands. With a process as confusing, frustrating and laborious as filing your taxes, there are many opportunities for unscrupulous people to take advantage. Here are some tips to avoid getting scammed:
Read the Fine Print
Tax preparation is not regulated. Anyone can claim they are a tax preparer simply by charging you to sit down and work through tax software together. Others may claim to help you file your taxes for free when they are including hidden costs or charges. Often they will help you file your federal taxes for free, then charge you to file your state tax return. Make sure you’re clear about who is preparing your taxes and what you are getting.
The Affordable Care Act, also known as Obamacare, is new and can be complicated. The IRS warns that scammers are specifically targeting the uninsured. Don’t let people take advantage of what you don’t know. Go directly to a government (.gov) source for the latest information. If you don’t have insurance, make sure you know and understand that you would never pay the penalty directly to your tax preparer.
If It Sounds Too Good to Be True, It Probably Is
Beware of companies who guarantee you a larger refund, or claim they can reduce your payments or get your refund faster — especially if they demand a large payment up front. If you find yourself owing an amount you can’t pay right away, you should contact the IRS directly: 1-800-829-1040.
Good Things Come to Those Who Wait
Some companies claim they can get your refund to you more quickly, for a fee. Once you have paid and provided your bank account and routing numbers, they divert your refund to their account. Taxpayers who use Refund Anticipation Loans pay $75 in order to receive their refund right away can be subject to interest rates from 60 percent to over 700 percent. A little patience might save you a lot of money.
There are many honest and helpful services available. If you make under $54,000/year you may be able to get your taxes prepared for free at a Volunteer Income Tax Assistance (VITA) site with an IRS-certified volunteer. If you make under $62,000/year you can file your state taxes online for free. Federal taxes are always free, regardless of income. Don’t waste your hard-earned money on unnecessary fees. Go to utahtaxhelp.org for more information, or check out our video at https://www.youtube.com/watch?v=hDZvjyCJ3uI.