You can correct tax return mistakes

What should you do if you find that you made a mistake on your 2012 tax return after it's been filed? Perhaps you find that you missed a big deduction. Perhaps you receive a late notice of income you earned.

Or perhaps you receive a corrected Form 1099 from your broker. The answer is not to panic. You can correct the mistake with an amended return.

The general rule is that you have three years to amend a personal or business return. Special rules may apply if you paid your taxes late, or are claiming certain business losses or carrybacks. You may have as long as seven years if you are filing to claim a loss on a worthless security or bad debt.

Many amended returns are filed each year. Form 1040X is used to show the items of income or deductions that you want to change or the different elections you want to make. A separate form must be filed for each previous year you want to change. You’ll have to file a paper copy to amend your return, even if you originally filed electronically or by telephone. If you want to change a corporate return, you file a Form 1120X, but the procedures are similar.

If you owe additional tax because of the change, you should send a check at the time you file your amended return. The IRS will let you know if you owe additional interest or penalties.

Please contact our office if you have questions about any return that's already been filed. We can let you know whether you need to file an amended return and help you with any of the necessary paperwork.

FBAR filing due soon

The IRS and the Treasury Department are getting increasingly interested in U.S. citizens who maintain foreign

bank, savings, and investment accounts. If you have any foreign investments, there's an approaching reporting requirement that you should be aware of.

You are required to file "Treasury Department Form 90-22.1," the "Report of Foreign Bank and Financial Accounts," if you have a financial interest in or signature authority over a foreign financial account. These accounts include bank accounts, brokerage accounts, mutual funds, or other types of foreign financial accounts. This is not a form that you file with your tax return. Rather it is a separate form due June 30 each year that is filed with the Treasury Department in Detroit (due June 28 this year since June 30 is a Sunday). Generally, this report is required to be filed if you have an interest in such accounts, and the aggregate value of those accounts exceeds $10,000 at any time during the calendar year.

If you do have assets in foreign banks or brokerages, be sure to meet your filing obligation. The requirements can get complicated, and the penalties for nonfiling are severe. For details or filing assistance, contact our office.

Job hunting and taxes

If you're job hunting, be aware of the potential tax breaks. You can deduct the costs of looking for a new job in your present line of work, even if you don't get the job. Typical expenses include travel to job interviews, resume costs, and employment agency fees. You must itemize your deductions, and your total miscellaneous deductions must exceed 2% of your adjusted gross income.

Deductible charity requires recordkeeping

If spring cleaning leaves you with items that you want to donate to charity, remember that donations of used clothing and household items must generally meet certain requirements to be tax-deductible. First, such items must be in "good used condition or better." Second, a receipt from the charity is required. If the property is valued under $250 and a receipt is not available, such as at unattended drop-off locations, reliable written records are still required.

Swap properties to postpone taxes

Postpone taxes by swapping real estate instead of selling it. This may enable you to trade up to property with a higher value. A tax-deferred exchange is a great tax-cutting strategy, but the rules are complex. Be sure to seek professional guidance. You may call us at anytime to discuss this. 

Don't fall for this #1 tax scam

Crooks wanting to steal your identity are using bogus e-mails and websites designed to look like genuine IRS

communications. You might expect the April 15 filing deadline to mark the end of these scams, but they, in fact, are expected to continue for months.

An example of these bogus e-mails: You receive a message confirming IRS receipt of your tax return, but the IRS needs more information to process your return. The e-mail looks official and completely legitimate. But it isn’t. The IRS does NOT contact taxpayers asking for personal and financial information. These e-mails should be deleted immediately. Fake IRS websites are also created by scammers to lure victims into filling out forms providing information that results in identity theft.

Check your 2013 tax withholding

If you have a sizable refund of your 2012 taxes, it may be time for you to check your withholding. After all, when you overpay your taxes, you’re making an interest-free loan to the government.

Reducing your withholding is as simple as filing a new Form W-4 with your employer. The form comes with a worksheet to figure out how many allowances you should claim. Don’t forget to allow for other taxable income besides wages, such as dividends or investment gains.

If you’re concerned about underpaying taxes and exposing yourself to penalties, there are a few rules you should know. Generally, you won’t face a penalty if you pay for 2013, through withholding or quarterly estimated payments, at least 100% of your 2012 taxes (110% if your adjusted gross income is over $150,000), or if you pay at least 90% of what you’ll owe for 2013.