The IRS Audit Blog

Posts Tagged ‘deductions’

Question: Trying to figure fair market value amount of car I used for business purposes for my taxes using Turbo Tax…?

It asks for me to put the FMV and the year the lease originated. In IRS Publication 463 it says to use the capitalized cost if specified on lease agreement. Capitalized cost is the amount of the car plus taxes, etc. I am confused as to whether I should put what I agreed to pay over the term of the lease which was approx. 15K or what the car would have sold for was I actually buying it which was approx 34K since that would have been the FMV of the car at the time, right? Please help. Thanks.

Answer: You need to average it out but a CPA would be able to tell you for sure.

Bigger tax refunds for some

Stimulus plan expands earned income tax credit for certain workers

Make the Most of Tax Breaks for College Expenses

Kim Lankford answers more questions about the American Opportunity Credit and other deductions for postsecondary education.

IRS TAX TIPS: Tax Benefits for Job Seekers (ASL, Captions & Audio)

Question: Does the IRS ever make a mistake and refund too much?

Does anyone know someone who has gotten a much bigger than expected refund from the IRS even with e-filing? Does the IRS ever make a mistake like this? Any ideas?

Answer: There are several possibilities:
1) You made a mistake somehow while using the tax software. This would have been an error in data entry, since the calculations are done by the software.

2) There was a discrepancy in the way the tax software and the IRS calculated your tax. In this case, the IRS computer would obviously win.

3) There was a mistake by a first-time filer entering their bank information wrong and putting in your account information for direct deposit by accident. Hard to imagine.

The bottom line is that you are in the 1% of people who have an “error” in the return despite using the tax software and e-filing. A congratulations is in order provided that the IRS contacts you regarding the discrepancy and says the refund is yours. Of course, this would be the only scenario where you can keep the money. Put it in a safe place and don’t spend it until you get that friendly letter from the IRS. The worst thing that can happen is having to give the money back. Even then, you haven’t lost anything–except for an imaginary vacation using a temporary loan by the IRS.

Refund anticipation loan? Just say no

There are better, cheaper ways to get your tax refund without using these short-term, high-cost loans offered by H&R Block and other tax chains.

Taxes: Changing Mistakes