Brace yourself.
Despite the 2 percent reduction you got in your Social Security and Medicare taxes last year, your federal income tax refund is likely to be several hundred dollars lighter this year, all things remaining equal.
The reason: The Making Work Pay Tax Credit a legacy of the 2008 economic stimulus bill disappeared for the 2011 tax year. That means that the $400 credit you got in 2009 and 2010 if you are single and working $800 if youre married and both of you work wont be there when you file your 2011 tax return …
Even losing a job can have a silver lining: The IRS may give you a tax break on your job search expenses, as long as you look for work in your current occupation.
Granted, the deduction is limited to the amount you spend thats more than 2 percent of your adjusted gross income for the year, which is the number at the bottom of the first page of your 1040 form. So if you clear $40,000, youll still be on the hook for the first $800 in job hunting expenses, plus tax. Still, every bit of savings counts when youre …
The tax filing process is a complicated nuisance for most people. If your identity is stolen, it can become a nightmare.
According to the U.S. Government Accountability Office, the IRS reported 248,357 incidents of tax-related identity fraud in 2010, up 380 percent since 2007. (ref 2)
None involved a direct theft of information from the IRS. Instead, most identity thieves used Social Security numbers and other identifying info stolen from other sources to commit employment fraud or steal tax refunds.
Both forms of fraud can cause major problems for legitimate taxpayers.
For example, if a thief uses your Social …
