Everyone knows you have to keep accurate records when it comes to reporting your taxes. But it is also a pain in the neck to have to keep accumulating receipts, check buds, invoices etc. for years “just in case”. It is not uncommon to fund taxpayers going to see their accountants with a boxful of receipts, bills and other documents. After all, few people will have the patience and tenacity to keep accurate documentary evidence for every expense and income for years and years.

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The IRS has admitted that it is overwhelmed by the number of tax fraud cases it has to resolve. An IRS spokesman in Florida said its employees are receiving additional training to better equip them to handle tax fraud. At the same time, the IRS is working to catch fraudulent tax returns at source. But this is easier said than done.

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Last year, the adoption tax credit was one of the most welcome credit to taxpayers because through it many taxpayers received huge refunds. Although the credit has been around since 1997, it had been a non-refundable credit i.e. it was to offset any taxes owed and any remainder is to be carried forward to offset the following year’s taxes. However, last year when the President signed the Affordable Care Act 2010, the adoption tax credit became a refundable credit meaning the credit will be paid to you rather than used to offset taxes. Furthermore, this year the amount of refund you can claim is increased by $190 to $13,360 for each child you adopted in the past six years.

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What is an Unreal Tax Audit and How it Affects You

Have you heard of an “unreal tax audit”?  This term was coined by Nina Olson, the National Taxpayer Advocate who is the primary person given the watchdog responsibility by the government over the IRS.  “Unreal audits” are usually letters informing you of errors or omissions in your tax returns.  These audits may sound harmless and non-intrusive compared to full-scale audits, they can still cost you money.

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Using tax software is an extremely popular way to prepare and submit tax returns.  With the tax season in full swing, the IRS website has partnered with some top tax preparation and filing software developers to provide solutions for filing of federal tax returns.  All these services provide free web-based applications with basic features like calculating the tax payable while assisting the user in filing and getting refunds.
Tax software these days have many value-added features that include free e-filing, printing and submitting the returns by USPS, review of the forms for errors and alerting the taxpayer on possible omissions and problems as well as guides on obtaining tax refunds.  Here are the 5 most widely used IRS free tax filing programs rated on their ease to use, free features, speed and accuracy.

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