Millions of Americans who are preparing their tax returns this spring have one desire in common - how can we reduce our taxes? Bankrate.com writer, Kay Bell, has compiled a summary of some of the more popular tax scams that attract the attention of taxpayers hoping to save money.
Here are some of the more popular ill-conceived methods of tax reduction that you should stay far away from:
- The Social Security Refund - Some scam artists may try to convince you that for a small fee you can recoup all the money you have paid into the Social Security system. Guess again.
- Get a Prize - Don't be fooled by offers of big prizes in store for those who are willing to pay the tax on the prizes up front.
- IRS Agents at the Door - If someone appears at your door claiming to be an IRS agent willing to collect your tax in person, just close the door. This isn't how the IRS operates.
- Taxation is Voluntary - Tax naysayers have been claiming for years that the voluntary tax system is just that - a system by which you don't have to pay taxes if you don't want to. Tax specialists will explain that the voluntary part is in your responsibility to prepare and mail your tax return. The paying part isn't voluntary - it is required by law.
- Employers Don't Have to Withhold Taxes - If you are an employee, your employer is required to withhold payroll taxes and turn that money over to the government on your behalf. Period.
- Tax Credits for Slavery Victims - Many a scam artist has tried to take advantage of descendants of slaves by offering to file a claim for a special tax refund that is available for slavery victims. There is no such refund or tax credit available.
The bottom line is, like it or not, we all have to pay our share of the income tax. If you are convinced your tax is too high, seek the aid of a professional tax preparer who can help unearth all the (legal) deductions and tax credits to which you are entitled.