A name change can have an impact on taxes. All the names on a taxpayer’s tax return must match Social Security Administration records. A name mismatch can delay a tax refund. Here’s what taxpayers should know if they changed their name:
- Reporting Name Changes. Got married and now using a new spouse’s last name or hyphenate a name? Divorced and now back to using a former last name? In either case, taxpayers should notify the SSA of a name change. That way the new name on IRS records will match the SSA records.
- Making Dependent’s Name Change. Notify the SSA if a dependent had a name change. For example, if a taxpayer adopted a child and the child’s last name changed. If the child does not have a Social Security number, the taxpayer may use an Adoption Taxpayer Identification Number on their tax return. An ATIN is a temporary number. Apply for an ATIN by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS. Visit IRS.gov to get the form.
- Getting a New SS Card. File Form SS-5, Application for a Social Security Card. The form is on SSA.gov or by calling 800-772-1213. The taxpayer’s new card will reflect the name change.
Every day scammers come up with new ways to steal taxpayers’ identities and personal information. Some scammers pretend to be from the IRS with one goal in mind: to steal money.
Be aware that con artists will use video relay services (VRS) to try to scam deaf and hard of hearing individuals. Don’t become a victim. Deaf and hard of hearing taxpayers should avoid giving out personal and financial information to anyone they do not know. Always confirm that the person requesting personal information is who they say they are.
Do not automatically trust calls just because they are made through VRS. VRS interpreters do not screen calls for validity.
The IRS has procedures in place for taxpayers who are experiencing tax issues. If you receive a call through VRS from someone claiming to be from the IRS, keep this in mind:
The IRS Will Never:
- Demand immediate payment and require the payment be made a specific way, such as by prepaid debit card, gift card or wire transfer. In most cases, the IRS will not call taxpayers about taxes owed without first having mailed a letter to the taxpayer.
- Threaten that local police or other law-enforcement groups will immediately arrest taxpayers for not paying a tax bill.
- Demand that taxpayers pay taxes without giving them the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.
Receive a Suspicious Call? Here’s What to Do:
- Deaf and hard of hearing taxpayers who owe taxes or think they might owe taxes should call the IRS at 800-829-1040 through VRS. IRS employees can help with a payment issue or confirm if there really is a tax issue.
- Taxpayers who know they don’t owe taxes or have no reason to think that they owe any taxes (for example, they’ve never received an IRS letter or the caller made bogus threats or demands as described above), should call and report the incident to the Treasury Inspector General for Tax Administration, or TIGTA, at 800-366-4484.
- Taxpayers can file a complaint using the FTC Complaint Assistant at https://www.ftccomplaintassistant.gov/Information?OrgCode=IRS#crnt&panel1-1. If the complaint involves someone impersonating the IRS, include the words “IRS Telephone Scam” in the notes.
To learn more about the latest tax phone scams, go to IRS.gov and type “scam” in the search field. IRS YouTube videos are available on a variety of topics in American Sign Language (ASL) with open-captions and voice over.
Self-employed taxpayers normally earn income by carrying on a trade or business. Here are six important tips from the IRS for the self-employed:
- Self-Employed Taxpayers. Sole proprietors and independent contractors are two types of self-employment. Taxes can be complex for the self-employed. Check out the IRS Self Employed Individuals Tax Center at https://www.irs.gov/individuals/self-employed.
- Estimated Tax. Self-employed taxpayers generally need to make quarterly estimated tax payments. IRS Publication 505, Tax Withholding and Estimated Tax, has details on making those payments.
- Schedule C or C-EZ. Self-employed taxpayers must file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with their Form 1040. For expenses less than $5,000, use Schedule C-EZ. Each form’s instructions provide the rules for which form to use.
- SE Tax. For those making a profit, self-employment and income tax may need to be paid. Self-employment tax includes Social Security and Medicare taxes. Use Schedule SE, Self-Employment Tax, to figure the tax.
- Allowable Deductions. Taxpayers can deduct expenses paid to run a business that are both ordinary and necessary. An ordinary expense is one that is common and accepted in the industry. A necessary expense is one that is helpful and proper for a trade or business.
- When to Deduct. In most cases, taxpayers can deduct expenses in the year paid or incurred. Some costs must be ‘capitalized,’ however. This means deducting the cost over a number of years.
If taxpayers receive Social Security benefits, they may have to pay federal income tax on part of those benefits. These IRS tips will help taxpayers determine if they need to do so.
- Form SSA-1099. If taxpayers received Social Security benefits in 2016, they should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount of their benefits.
- Only Social Security. If Social Security was a taxpayer’s only income in 2016, their benefits may not be taxable. They also may not need to file a federal income tax return. If they get income from other sources, they may have to pay taxes on some of their benefits.
- Interactive Tax Tools. Taxpayers can get answers to their tax questions with this helpful tool, Are My Social Security or Railroad Retirement Tier I Benefits Taxable (https://www.irs.gov/uac/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable), to see if any of their benefits are taxable. They can also visit IRS.gov and use the Interactive Tax Assistant tool at https://www.irs.gov/uac/interactive-tax-assistant-ita-1.
- Tax Formula. Here’s a quick way to find out if a taxpayer must pay taxes on their Social Security benefits: Add one-half of the Social Security income to all other income, including tax-exempt interest. Then compare that amount to the base amount for their filing status. If the total is more than the base amount, some of their benefits may be taxable.
- Base Amounts. The three base amounts are:
- $25,000 – if taxpayers are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from their spouse for all of 2016
- $32,000 – if they are married filing jointly
- $0 – if they are married filing separately and lived with their spouse at any time during the year
All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.
Scams continue to use the IRS as a lure. These tax scams take many different forms. The most common scams are phone calls and emails from thieves who pretend to be from the IRS. Scammers use the IRS name, logo or a fake website to try and steal money from taxpayers. Identity theft can also happen with these scams.
Taxpayers need to be wary of phone calls or automated messages from someone who claims to be from the IRS. Often these criminals will say the taxpayer owes money. They also demand payment right away. Other times scammers will lie to a taxpayer and say they are due a refund. The thieves ask for bank account information over the phone. The IRS warns taxpayers not to fall for these scams.
Below are several tips that will help filers avoid becoming a scam victim.
IRS employees will NOT:
- Call demanding immediate payment. The IRS will not call a taxpayer if they owe tax without first sending a bill in the mail.
- Demand payment without allowing the taxpayer to question or appeal the amount owed.
- Require the taxpayer pay their taxes a certain way. For example, demand taxpayers use a prepaid debit card.
- Ask for credit or debit card numbers over the phone.
- Threaten to contact local police or similar agencies to arrest the taxpayer for non-payment of taxes.
- Threaten legal action such as a lawsuit.
If a taxpayer doesn’t owe or think they owe any tax, they should:
- Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident at https://www.treasury.gov/tigta/contact_report_scam.shtml.
- Report the incident to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report.
In most cases, an IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. Criminals often use fake refunds, phony tax bills or threats of an audit. Some emails link to sham websites that look real. The scammers’ goal is to lure victims to give up their personal and financial information. If they get what they’re after, they use it to steal a victim’s money and their identity.
For those taxpayers who get a ‘phishing’ email, the IRS offers this advice:
- Don’t reply to the message.
- Don’t give out your personal or financial information.
- Forward the email to email@example.com. Then delete it.
- Do not open any attachments or click on any links. They may have malicious code that will infect your computer.
More information on how to report phishing or phone scams is available on IRS.gov.
All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.