With the approach of hurricane season, the IRS is urging taxpayers to take steps to protect their financial records.

"Even if you don't live in an area prone to hurricanes, this is an excellent time to take a few minutes to help safeguard financial documents that can be hard to replace," said Kevin Brown, Commissioner of the IRS Small Business/Self-Employed Division.

You can start by taking advantage of paperless recordkeeping. Many people can access their bank statements, credit card statements, utility statements and other financial documents via email. This method is a great way to protect your financial records from disaster. You can scan your W-2s, tax returns and other documents into electronic format. You can even scan your deductible receipts.

You can then save all of your financial records to a key or CD. Put the CD in your safety deposit box or send it to a trusted relative. Make sure that you back up your files regularly and keep them in safe locations.

In the case of a disaster, having a record of your belongings and valuables can help you prepare and prove an insurance claim. Go room by room listing all of your belongings. Back this up with photographs or videotape.

"This will help you recall and prove the market value of items for insurance and casualty loss claims," said Tom Ochsenschlager with the American Institute of Certified Public Accountants. "Be sure to store the photos with a friend or family member who lives away from the geographical area."

Have an emergency plan. Make sure that you have necessary documents kept safe. Keep you W-2s, tax receipts, home closing statements and insurance records close. Have the originals in a file that you can quickly grab if you need to leave in a hurry. Keep copies in a safe place.

I must admit something. I don't like paying money. Heck, I don't like paying money to anyone that I don't have to but sometimes it's just plain required. In fact, taxes are required by law. Last year, I had to fork over a hefty sum to a lot of different agencies and people who I never thought I had to, but the IRS annual income tax was one of my biggest checks that I cut. Let's take a look at some of the major issues of tax relief and see if we can get you some.

1)Deductions. Deductions saved me a ton of money last year. If you have a business, a lot of different things are eligible for deduction and can therefore save you a large amount of money. If you don't have a business, try looking into taking a deduction for your interest on your mortgage or more. Some things are eligible for deductions, others are not.

2)Disaster. In some cases, you may be able to qualify for tax relief. Hurricanes and other natural disasters are a fact of life these days and the government might be able to give you an extension on filing your taxes. Check out the various government positions on tax relief regarding natural disasters as it might be worth your time.

3)Professional help. There are tons of CPAs and tax professionals that can help with your situation. Just because you don't think there are more deductions that you can take, it doesn't mean there aren't. There are literally tons and tons of different things that might help in your tax situation. Finding different ways to save money on taxes are some people's jobs. H&R Block has saved me a few thousand dollars over the years and there is no reason why you can't use their services too.

As an introduction, this is just the beginning as far tax relief is concerned. The real meat of the information is located at our site. We've seen and done nearly everything regarding tax relief, so come by our site right now for tons of tax relief information.

Tax law is complex and terrifying to most people, and technical jargon makes filing returns an insurmountable ordeal for most people. The IRS needs to do its job, just like the rest of us, but everyone has heard horror stories of IRS misconduct, negligence, and mistreatment. You have rights as a taxpayer. Knowledge is power, and dealing with the IRS is no exception.

Most people are hard-working, honest, and just want to comply with the law. However, with increasingly complicated tax law, how are most people supposed to understand their own tax situation? You may have many questions about what is deductible in your business. Well, if you are self employed, a lot of things are! All of your supplies, health insurance, beauty items, space rent, etc, is deductible if you own your own business. You can even deduct part of your home expenses if you conduct business in your home.

Other items, such as computers and other large or expensive items are called “depreciable assets”. You can deduct these items over time. Keep track of all of these items on a spreadsheet, or a journal, so you have a good record of what you can depreciate.

5 Great Tax Tips for Small Business Owners

1. Open a Separate bank account for your business. This is so important! Keep your business deposits and expenses separate at all times—it makes things so much easier!! When you want to take money out for personal use, just write yourself a check and put “owner withdrawl” in the memo line. That way, you keep track of personal expenses. Charge all your business expenses to a business credit card. You will be so happy at the end of the year that you did. If everything in your business is done under your own name, then you don’t need anything special to open an additional account for your business.

2. Keep all your receipts—in a shoebox, or Kleenex box, whatever. Keep proof of your expenses, and the IRS will never have a reason to question your deductions. Just write “business” on the receipt.

3. Don’t be sneaky with cash! The IRS has a can obtain warrants to examine all your bank accounts, credit accounts, and assets if it believes fraud has occurred. This is how most people get caught. Don’t deposit huge sums of cash into your personal bank account and then try to explain it later when the IRS asks you where you got it. It’s not worth it. Currently, some of the criminal penalties for major tax fraud exceed penalties for even violent crimes, like assault.

4. Don’t Forget to Pay Self-Employment Tax!- Many people are confused by this. Self-Employment tax is Medicare and Social Security that self-employed business owners must pay. Normally, when an employee works for a company, the business must pay some of the employee’s Social Security and Medicare taxes. However, when you own your own business, you still have to pay these taxes to the government.

5. Don’t Forget to File on Time! Don’t forget to file on time, even if you don’t have the money to pay your taxes. The penalties for filing late are much greater than if you file on time, and make a small payment. The IRS is much more forgiving with taxpayers that attempt to be compliant. The IRS will allow you to make payments, too. Just keep track of your payments, and see a tax professional if it seems too overwhelming.

Organizing your taxes can get quite nerve-racking. This is the main reason why many people would find some assistance in preparing their taxes.

When you file your taxes, you can find someone who can do the job for you. Look for a person who is knowledgeable, an experienced expert with tax specialization. There are actually various available types of assistance from people such as:

1. Tax Preparer

They have good knowledge when it comes to filing taxes. Tax preparers are persons that are highly trained and educated in preparing your tax returns and preparations.

2. Enrolled Agents

Compared to tax preparers, an enrolled agent can show you your taxes with an assessment. They are the “advanced” tax preparers, however the superiority or work and skills differs from agent to agent.

3. Certified Public Accountants

You cannot only use your CPA to prepare taxes for you; they can also help you to keep yourself from paying too much taxes. Their services are very expensive. You have to pay them in an hourly basis ranging from 200 to 300 dollars. However, they are worth the charges because a lot of them are very good. CPA’s can give you the ins and outs about taxes. They can provide you ways on how to save on your taxes legally.

In choosing among the three, consider first your finances. If you have reasonably small earnings every year, you do not have to hire someone whose service charge is bigger than your income. Hire someone who is within your budget.

If not, there are many other ways you can fix your taxes, a lot of websites offer free information on how to prepare your taxes.

Taxpayers are required to keep tax records for a minimum of three years. However, the law allows for exceptions to this rule, especially in the case of a natural disaster, or other loss. A fire, flood, theft, or other casualty qualifies as a legitimate reason for record reconstruction and the use of estimates. Reasonable estimates may be used for tax purposes, insurance reimbursement, and FEMA aid.

Here are some helpful tips to help you reconstruct your records.

1. Take photographs as soon as possible. Disposable or digital cameras are best, and keep the photos in a safe place, or, better yet, upload them into your e-mail account.

2. If you own your home, contact your title company, bank, or escrow company and request copies of your records. In the case of a damaged vehicle, use Kelly Blue Book or NADA value. You can also look up this information online.

3. Use your property tax settlement for value estimates. You can get copies from your tax assessor’s office. You may even be able to access your records online. Your mortgage company (bank) may also have a recent appraisal on file.

4. Check online and with local appraisal companies in order to get “comps” for your property. “Comps” are comparable sales in your area, and may be used to accurately assess value.

5. Contact the IRS and request copies of previous year’s tax returns. You may request transcripts of previous tax returns by filing form 4506-T. Transcripts are free, easier and faster than requesting copies of original returns, and transcripts may be requested by phone.

6. If a home improvement was made, such as a deck or a garage addition, contact your independent contractor for copies of the contract. You may also use written accounts of relatives or friends as proof that the improvement was made.

7. For personal property, use old photographs that show furniture, electronics, or other items. You can also reconstruct records by drawing a simple floorplan of each room, and documenting the items that were there. Include all rooms, garages, attics, and basement, if any. If you purchased items with a credit card, get copies of your credit card statement, and use that as a basis for the items.

8. If you need to reconstruct your W-2 forms, use an earnings statement, or W-2 forms from a prior year, then reasonably estimate your income. All of the information that you need should be listed on your earnings statements. Use form 4852 to submit an estimated W-2 form to the IRS, and estimate your wages.

Reconstructing records may seem like a daunting task, but remember that the IRS allows taxpayers to make thousands of reasonable estimates every year. Every year, businesses experience thefts, fire, floods, and other disasters that destroy property and records. As long as the estimates are reasonable, and you demonstrate an honest attempt to obtain proof of those records, the IRS will allow the estimates in lieu of actual records.

When in doubt, seek the advice of a tax professional, or call the IRS directly. You may be on hold for a while, but at least the call is free. Keep a record of your conversation with the IRS operator. Write down his identification number, and an outline of your conversation. Search the internet first—the information is free, public, and may save you a lot of time and money. Many taxpayers that experience casualty losses can figure out the estimates for themselves with just a little effort and elbow grease. Be truthful, and don’t be afraid to trust your judgment. You’re smarter than you think!

Christine P Silva, BA, CRTP, lives in California with her husband, two children, and three spoiled cats. She earned her undergraduate degree from San Jose State University, and her advanced accounting certificate and tax license from Cosumnes River College. She is the founder of the Sacramento Volunteer Tax Preparation Clinic, a free service offering tax assistance to low income and Spanish-speaking taxpayers.

Welcome to the Senior Scam Alert, a column designed for seniors, in order to inform them of scams and cons that are regularly committed against senior citizens. Seniors are victims of cons more often than any other age group. Seniors tend to be more trusting, and less apt to question someone who portrays himself as an “expert”.

Disabled Access Telephone Scam

According to the IRS, a new tax scam has been uncovered. Con artists sell expensive coin-operated telephones to individuals. Then, the salespeople offer to “lease back” the phones and service them for a fee. The unsuspecting “investors” are then charged outrageous amounts. According to the Federal Trade Commission, the phones are often never delivered, and the fees continue to be charged anyway.

The telephone salesman also informs the “investor” that they qualify for IRS Disabled Access Credits; a substantial tax break offered to businesses who invest in equipment and upgrades designed to make their businesses more accessible to disabled individuals. The phones do not qualify for the credit, and the victim is then also in trouble because of tax fraud. The responsibility for tax mistakes always lies with the taxpayer, regardless of where the information came from.

Seniors are particularly vulnerable, because most of them are unfamiliar with complex tax law. Seniors are eager for passive income, since most are retired and do not work. The scam artists promise to provide enormous tax breaks and a steady income. Multiple tax cases have been brought before the IRS regarding this scam. In at least three cases, the company “Alpha Telecom” incorrectly advised investors that the pay phones qualified for a Disabled Access tax deduction. In 2002, Alpha Telecom was cited by the Federal Trade Commission for violating Federal law. Unsuspecting investors lost thousands of dollars, and Alpha Telecom filed for bankruptcy after being investigated in at least twelve states.

Website Mall Scams

In a similar scam, a salesman offers to set up an internet “virtual mall.” The internet mall supposedly qualifies the buyer for the Disabled Access Credit, and the scam promises huge profits from internet sales, which, of course, never materialize. The website company sets up a “dummy” website and then charges the buyer an inflated commission. When the unsuspecting investor attempts to claim the tax credit, the IRS disallows the deduction. The investor is then liable for additional taxes and penalties.

A Las Vegas telemarketing company, National Audit Defense Network (NADN), is one of the companies involved in this “Virtual Mall” scheme. In 2004, NADN filed for bankruptcy after the justice department discovered that it had sold numerous abusive tax shelters, costing the US Treasury over $320 million dollars. The justice department obtained NADN’s customer list, allegedly comprised of 640,000 taxpayers, all of which may have unknowingly participated in an unlawful tax shelter.

If you feel that you may have been a victim of an abusive tax shelter, contact a tax professional immediately. Enrolled Agents, CPAs, and attorneys are all qualified to represent taxpayers in an audit and in tax court. They can file an amended return for you, and help represent you, if necessary. Enrolled Agents may be the least expensive of the three, because they specialize only in tax.

Remember, “if it sounds too good to be true, it probably is!”

Christine P Silva, BA, CRTP, lives in California with her husband, two children, and three spoiled cats. She earned her undergraduate degree from San Jose State University, and her advanced accounting certificate and tax license from Cosumnes River College. She is the founder of the Sacramento Volunteer Tax Preparation Clinic, a free service offering tax assistance to low income and Spanish-speaking taxpayers

According to business analysts, the home-based business trend is on the rise and a lot of people are jumping onto self-employment. The news is not surprising since there are many advantages in being self-employed and owning your own business. Aside from the fact that you can actually call something your own, there is also the sense of achievement brought by personal success. On the practical side, you get to be your own boss, which means that you decide your hours and how much effort you'll put into a project. Plus, there are certain advantages exclusive to dealing with self employed tax, sole proprietor tax, business tax, and other monetary matters.

Managing your taxes is easy, says Jan Zobel, a freelance tax specialist. Drawing from over 2 decades of tax management experience, she has the following suggestions on how to manage self employed tax, sole proprietor tax, business tax, and other independent taxes. She suggests filing appointment books, daily planners, or calendars with finance materials like taxes and banking records. Zobel tips that there is money in keeping time. Your schedule can be used as proofs to verify and clarify business expenditures like travel mileage, phone bills, and hotel receipts. Presto, instant tax deductions. She advises to log in your travel time and miles driven in business trips in your appointment book. Aside from this, Zobel also warns to take note of financial details. Often, these are the causes of tax troubles. Record those bank account deposits, regardless whether they are loans, gifts or business-related. It is also helpful if you note deposit sources. Keep these notes in a checkbook or a separate file. This way, you can separate business income from loans and gifts which aren't covered by tax. The IRS usually assumes undeclared income if audits reported an income excess even if these came as gifts. Proofs or records of these gifts prevent tax problems from the IRS. Zobel asserts that insisting you can remember everything related to your finances come tax time is unrealistic.

Self employed tax, sole proprietor tax, business tax, and independent taxes benefit greatly from separating business accounts from personal accounts. Zobel advises to keep business money in a separate account and your own money in your own account. Be reminded to write checks for business purposes from the assigned account and vice versa. For those who don't want separate accounts, Zobel suggests to note each check with remarks such as "business" or "personal" each time you write one. Identifying the purpose of the check won't hurt either such as "for office furniture". This tip minimizes mix-up of your personal and business finances. Following this tip, keeping credit cards for personal and business use separately is also preferred. She also reminds that interest in credit cards for business purposes is a hundred percent deductible. Zobel advises keeping credit card and sales receipts. These are especially handy during audits for reference. Consulting tax specialists, professional tax managers, and the internet for tax managing tips are also advised.

Lastly, whether you pay self employed tax, sole proprietor tax, business tax or freelance taxes, keep your records clean and straight. Remember also to settle your taxes on time. Racing after deadlines can make you forget key documents which might cause tax problems.