V-TAX PLUS

Bogus "Self Employment Tax Credit" – Did You Know?

Scammers have been spreading misinformation through ads and social media posts about a supposed Self Employment Tax Credit, which they claim people can use to get massive IRS refunds. In reality, no such credit even exists. The scammers charge fees to prepare tax returns, on which they actually file bogus claims for the specialized Credit for Sick and Family Leave, which was only available for 2020 and 2021.

In reality, only a small number of self-employed people who experienced very specific COVID-related circumstances qualify for the Credit for Sick and Family Leave. IRS personnel flag suspicious credit claims for investigation. In the end, people who get lured in by these scammers have to repay their tax refunds, with penalties and interest charges added. Meanwhile, the scammers disappear with the fees they collect to file false tax returns.

Remember, if a tax credit or tax refund claim sounds too good to be true, it usually is. A trusted tax professional can help you determine whether you missed any legitimate credits on your past tax returns, and if so, help you file amended returns to claim your refunds.

Teachers: Make Sure to Save Receipts for Classroom Supplies to Get a Tax Benefit

If you are a teacher gearing up for the new school year, you may be able to reduce your tax bill by keeping records of your expenses. Classroom teachers and certain other school employees may qualify to deduct the cost of classroom supplies on their tax returns. The Educator Expense Deduction is an "above the line" deduction, which means that you may claim it even if you do not itemize deductions on your return.

Eligible teachers and classroom staff may deduct up to $300 in classroom expenses (up to $600 for joint filers who are both educators) for tax year 2024. Qualifying expenses may include the cost of typical school supplies like books, paper, writing utensils and rulers, along with athletic supplies for courses in health or physical education. You may also be able to deduct unreimbursed costs to participate in professional development workshops or courses.

You must maintain complete records of all deductible expenses, such as itemized receipts or invoices. A tax professional can help you determine whether you qualify for the Educator Expense Deduction, and if so, help you claim it on your tax return next spring.

Summer Jobs - Did You Know?

If you're currently working at a summer job or know a teen or student who is, here is a useful tax-saving tip:

Students and teenage employees normally have taxes withheld from their paychecks by their employer after filling out a Form W-4.

However, if the job is regarded as self-employment, like baby-sitting or lawn care can be, they should keep good records of all expenses to help maximize potential deductions.

In the case of lawn care, potential deductible expenses may include: business cards, fliers, fuel, equipment rentals, chemicals, work mileage, etc.