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Archive | Tax Time

Steps victims can take to minimize effect of data theft

 

Tax tip 2018-27

Every day, the theft of personal and financial information puts people at risk of identity theft. Generally, thieves try to use the stolen data as quickly as possible to:

  • Sell the information to other criminals.
  • Withdraw money from a bank account.
  • Make credit card purchases.
  • File a fraudulent tax return for a refund using victims’ names.

Victims of a data loss should follow these steps to minimize the effect of the theft:

  • Try to determine what information the thieves compromised. Compromised information may include emails and passwords, or more sensitive data, such as name and Social Security number.
  • Take advantage of credit monitoring services when offered by the affected organization.
  • Place a freeze on credit accounts to prevent access to credit records. It varies by state, but there may be a fee to place a freeze on an account. At a minimum, victims should place a fraud alert on their credit accounts by contacting one of the three major credit bureaus. A fraud alert isn’t as secure as a freeze, but it’s free.
  • Reset passwords on online accounts, especially those of financial sites and email and social media accounts. Use different passwords for each account. Some experts recommend at least 10-digit passwords, mixing letters, numbers and special characters. Victims may also wish to consider using a password manager or app.
  • Use multi-factor authentication, when available. Some financial institutions, email providers and social media sites allow users to set their accounts for multi-factor authentication, which requires a security code, usually sent as a text to their mobile phone, in addition to a username and password.

All taxpayers should keep a copy of their tax return. Taxpayers using a software product for the first time may need their Adjusted Gross Income 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 at irs.gov.

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Scam Alert: Watch out for erroneous refunds 

 

Beware of fake calls to return money to a collection agency  

WASHINGTON – The Internal Revenue Service is warning taxpayers of a quickly growing scam involving erroneous tax refunds being deposited into their bank accounts. The IRS also offered a step-by-step explanation for how to return the funds and avoid being scammed.

Following up on a Security Summit alert issued Feb. 2, the IRS issued this additional warning about the new scheme after discovering more tax practitioners’ computer files have been breached. In addition, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. The IRS Criminal Investigation division continues its investigation into the scope and breadth of this scheme.

These criminals have a new twist on an old scam. After stealing client data from tax professionals and filing fraudulent tax returns, these criminals use the taxpayers’ real bank accounts for the deposit.

Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.

Different Versions of the Scam

In one version of the scam, criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency.

In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund.

As it did last week, the IRS repeated its call for tax professionals to step up security of sensitive client tax and financial files files.

The IRS urged taxpayers to follow established procedures for returning an erroneous refund to the agency. The IRS also encouraged taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts. Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.

Because this is a peak season for filing tax returns, taxpayers who file electronically may find that their tax return will reject because a return bearing their Social Security number is already on file. If that’s the case, taxpayers should follow the steps outlined in the Taxpayer Guide to Identity Theft. Taxpayers unable to file electronically should mail a paper tax return along with Form 14039, Identity Theft Affidavit, stating they were victims of a tax preparer data breach.

Here are the official ways to return an erroneous refund to the IRS.

Taxpayers who receive the refunds should follow the steps outlined by Tax Topic Number 161 – Returning an Erroneous Refund. The tax topic contains full details, including mailing addresses should there be a need to return paper checks. By law, interest may accrue on erroneous refunds.

If the erroneous refund was a direct deposit:

Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.

Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.

If the erroneous refund was a paper check and hasn’t been cashed:

Write “Void” in the endorsement section on the back of the check.

Submit the check immediately to the appropriate IRS location listed below. The location is based on the city (possibly abbreviated) on the bottom text line in front of the words TAX REFUND on your refund check.

Don’t staple, bend, or paper clip the check.

Include a note stating, “Return of erroneous refund check because (and give a brief explanation of the reason for returning the refund check).”

The erroneous refund was a paper check and you have cashed it:

Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.

If you no longer have access to a copy of the check, call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) (see telephone and local assistance for hours of operation) and explain to the IRS assistor that you need information to repay a cashed refund check.

Write on the check/money order: Payment of Erroneous Refund, the tax period for which the refund was issued, and your taxpayer identification number (social security number, employer identification number, or individual taxpayer identification number).

Include a brief explanation of the reason for returning the refund.

Repaying an erroneous refund in this manner may result in interest due the IRS.

IRS mailing addresses for returning paper checks

For your paper refund check, here are the IRS mailing addresses to use based on the city (possibly abbreviated). These cities are located on the check’s bottom text line in front of the words TAX REFUND:  

ANDOVER – Internal Revenue Service, 310 Lowell Street, Andover MA 01810

ATLANTA – Internal Revenue Service, 4800 Buford Highway, Chamblee GA 30341

AUSTIN – Internal Revenue Service, 3651 South Interregional Highway 35, Austin TX 78741

BRKHAVN – Internal Revenue Service, 5000 Corporate Ct., Holtsville NY 11742

CNCNATI – Internal Revenue Service, 201 West Rivercenter Blvd., Covington KY 41011

FRESNO – Internal Revenue Service, 5045 East Butler Avenue, Fresno CA 93727

KANS CY – Internal Revenue Service, 333 W. Pershing Road, Kansas City MO 64108-4302

MEMPHIS – Internal Revenue Service, 5333 Getwell Road, Memphis TN 38118

OGDEN – Internal Revenue Service, 1973 Rulon White Blvd., Ogden UT 84201

PHILA – Internal Revenue Service, 2970 Market St., Philadelphia PA 19104

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Five things to remember about exemptions and dependents 

 

Most taxpayers can claim one personal exemption for themselves and, if married, one for their spouse. This helps reduce their taxable income on their 2017 tax return. They may also be able to claim an exemption for each of their dependents. Each exemption normally allows them to deduct $4,050 on their 2017 tax return. While each is worth the same amount, different rules apply to each type.

Here are five key points for taxpayers to keep in mind on exemptions and dependents when filing their 2017 tax return:

1. Claiming Personal Exemptions. On a joint return, taxpayers can claim one exemption for themselves and one for their spouse. If a married taxpayer files a separate return, they can only claim an exemption for their spouse if their spouse meets all of these requirements. The spouse:

  • Had no gross income.
  • Is not filing a tax return.
  • Was not the dependent of another taxpayer.

2. Claiming Exemptions for Dependents.  A dependent is either a child or a relative who meets a set of tests. Taxpayers can normally claim an exemption for their dependents. Taxpayers should remember to list a Social Security number for each dependent on their tax return.

3. Dependents Cannot Claim Exemption. If a taxpayer claims an exemption for their dependent, the dependent cannot claim a personal exemption on their own tax return. This is true even if the taxpayer does not claim the dependent’s exemption on their tax return.

4. Dependents May Have to File a Tax Return. This depends on certain factors like total income, whether they are married, and if they owe certain taxes.

5. Exemption Phase-Out.  Taxpayers earning above certain amounts will lose part or all the $4,050 exemption. These amounts differ based on the taxpayer’s filing status.

The IRS urges taxpayers to file electronically. The software will walk taxpayers through the steps of completing their return, making sure all the necessary information is included about dependents. E-file options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.

Taxpayers can get questions about claiming dependents answered by using the Interactive Tax Assistant tool on IRS.gov. The ITA called Whom May I Claim as a Dependent will help taxpayers determine if they can claim someone on their return.

More Information:

Publication 17, Your Federal Income Tax 

Publication 501, Exemptions, Standard Deduction and Filing Information.

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Many people in rural areas can benefit from EITC

 

From IRS.gov

The IRS wants taxpayers living in rural communities to be aware of the earned income tax credit and correctly claim it if they qualify. Many qualified individuals and families who live in rural areas don’t claim the EITC. There are many reasons for this. They may:

• Think they are ineligible.

• Not know about the credit.

• Not think they made enough money to qualify.

• Worry about paying for tax preparation services.

The average household income in many small towns and rural areas is below the national average. Because of this, many of these taxpayers may qualify for EITC. Here are some things that people living in these areas should remember about the credit and how it can benefit them:

• Because it’s a refundable tax credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

• An eligible taxpayer must have earned income from employment or owning a business or farm and meet basic rules.

• To get the credit, taxpayers must file a tax return, even if they don’t owe any tax or aren’t required to file.

• Single workers without a qualifying child who earn less than $15,010 may qualify for a smaller amount of the credit.

• There are special rules for individuals receiving disability benefits and for members of the military.

• The IRS recommends using the EITC Assistant on IRS.gov to determine eligibility and estimate the amount of credit.

Qualified taxpayers should consider claiming the EITC by filing electronically, which they can do:

• Through a qualified tax professional.

• Using free community tax help sites.

• Themselves, with IRS Free File.

By law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the additional child tax credit. The law requires the IRS to hold the entire refund — even the portion not associated with the EITC or ACTC.  The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting Feb. 27, 2018, if these taxpayers choose direct deposit and there are no other issues with their tax return.

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Beware IRS impersonation scams 


As tax season begins, the Montcalm County Sheriff’s Office is receiving numerous reports of telephone calls from thieves who pretend to be from the IRS. Although these scams take many different forms, the most common scams are phone calls and emails from thieves who use the IRS name, logo or a fake website to try to steal your money. They may try to steal your identity too. 

Be wary if you get an out-of-the-blue phone call or automated message from someone who claims to be from the IRS. Sometimes they say you owe money and must pay right away. Other times they say you are owed a refund and ask for your bank account information over the phone. Don’t fall for it. Here are several tips that will help you avoid becoming a scam victim. 

The real IRS will NOT: 

  • Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail. 
  • Demand tax payment and not allow you to question or appeal the amount you owe. 
  • Require that you pay your taxes a certain way. For example, demand that you pay with a prepaid debit card. 
  • Ask for your credit or debit card numbers over the phone. 
  • Threaten to bring in local police or other agencies to arrest you without paying. 
  • Threaten you with a lawsuit. 

If you don’t owe taxes or have no reason to think that you do: 

  • Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident. 
  • You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report. 

If you think you may owe taxes: 

  • Ask for a call back number and an employee badge number. 
  • Call the IRS at 800-829-1040. IRS employees can help you. 

Email Scams: 

In most cases, an IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. These scams often use fake refunds, phony tax bills, or threats of an audit. Many scammers even use what appears to be an official IRS logo at the top of their email. Some emails link to sham websites that look real. Don’t be fooled! The scammer’s 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. 

If you 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 phishing@irs.gov. Then delete it. 

Don’t open any attachments or click on any links. They may have malicious code that will infect your computer. 

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What to do when an IRS letter arrives in the mail

 

The IRS mails millions of pieces of correspondence every year to taxpayers for a variety of reasons.

Below are some suggestions on how to best handle a letter or notice from the IRS:

Do not panic. Simply responding will take care of most IRS letters and notices.

Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and provides specific instructions on what to do. Careful reading is essential.

A notice may likely be about changes to a taxpayers’ account, taxes owed or a payment request. Sometimes a notice may ask for more information about a specific issue or item on a tax return.

If a notice indicates a changed or corrected tax return, review the information and compare it with your original return.

There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.

Taxpayers must respond to a notice they do not agree with. Mail a letter explaining why there is a disagreement with the IRS. The address to mail the letter is on the contact stub at the bottom of the notice. Include information and documents for the IRS to consider and allow at least 30 days for a response.

There is no need to call the IRS or make an appointment at a taxpayer assistance center for most notices. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Be sure to have a copy of the tax return and notice when calling.

Always keep copies of any notices received with tax records.

Be alert for tax scams. The IRS sends letters and notices by mail. IRS does not contact people by email or social media to ask for personal or financial information. The IRS will not demand payment a certain way, such as prepaid debit or credit card. Taxpayers have several payment options for taxes owed.

For more on this topic, visit IRS.gov. Click on the link ‘Respond to a Notice’ at the bottom center of the home page. Also, see Publication 594, The IRS Collection Process. Get IRS.gov/forms at any time.

To make a payment, visit IRS.gov/payments or use the IRS2Go app to make a payment with Direct Pay for free, or by debit or credit card through an approved payment processor for a fee.

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Need more time to pay taxes?

 

All taxpayers should file on time, even if they can’t pay what they owe. This saves them from potentially paying a failure to file penalty. Taxes are due by the original due date of the return.

Here are four tips for those who can’t pay their taxes in full by the April 18 due date:

  1. File on time and pay as much as possible. Pay online, by phone, with your mobile device using the IRS2Go app, or by check or money order. Visit IRS.gov for electronic payment options.
  2. Get a loan or use a credit card to pay the tax. The interest and fees charged by a bank or credit card company may be less than IRS interest and penalties. For credit card options, see IRS.gov.
  3. Use the Online Payment Agreement tool.  Don’t wait for the IRS to send a bill before seeking a payment plan. The best way is to use the Online Payment Agreement tool on IRS.gov. Taxpayers can also file Form 9465, Installment Agreement Request, with their tax return. Set up a direct debit agreement. With this type of payment plan, there is no need to send a check each month.
  4. Don’t ignore a tax bill.  If so, the IRS may take collection action. Contact the IRS right away by calling the phone number on your bill to talk about options. The IRS will work with taxpayers suffering financial hardship.

Remember to file on time. Pay as much as possible by April 18, 2017, and pay the rest as soon as possible to reduce the interest and penalties. Find out more about the IRS collection process on IRS.gov.

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IRS urges taxpayers not to rush; choose return preparers wisely

 

WASHINGTON – As the tax filing season deadline approaches, the Internal Revenue Service is reminding taxpayers to select who will prepare their 2016 federal tax return carefully.

With the filing deadline less than two weeks away, appointments with some tax professionals may be limited. A reputable preparer will ask to see a taxpayer’s records and receipts and can help file an extension to give the taxpayer time to collect any missing documents. The IRS urges taxpayers to avoid fly-by-night preparers who may not be available after April 18 and suggests checking the return preparer’s qualifications and history.

The IRS Choosing a Tax Professional page has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers identify local preparers by type of credential or qualification.

All paid tax preparers must have a Preparer Tax Identification Number. They must sign the return and include their PTIN. Ask about fees before providing personal financial records and receipts. Review the return and ask questions before signing it.

Free Tax Preparation

Each year, millions of tax returns are prepared for free by taxpayers using IRS Free File or by volunteers at community-based sites l staffed by IRS-trained volunteers that are located across the country.

IRS Free File lets taxpayers who earned less than $64,000 prepare and e-file a return for free using name-brand software. Go to IRS.gov and click on the ‘Filing’ tab for options. Free File software walks users through the tax preparation process and helps identify those tax changes that may affect their return. Those earning more than $64,000 can use Free File Fillable Forms, electronic versions of IRS paper forms.

IRS trained and certified volunteers at thousands of Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA and TCE) sites nationwide offer free tax preparation and e-filing. VITA offers free tax return preparation to taxpayers who earn $54,000 or less. The TCE program is mainly for people age 60 or older and focuses on tax issues unique to seniors. AARP participates in the TCE program and helps taxpayers with low- to moderate incomes.

To find the closest VITA site, visit IRS.gov and search the word “VITA.” Or download the IRS2Go app on a smart phone. Site information is also available by calling the IRS at 800-906-9887.

To locate the nearest AARP Tax-Aide site, visit aarp.org, or call 888-227-7669.

There are also VITA and TCE sites that provide bilingual help.

Taxpayers who can’t file by the deadline should request an extension by using Free File on IRS.gov. In a matter of minutes, anyone can e-file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, and get a six-month extension. Requesting an extension to file does not extend the time to pay.

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Private collection of some overdue taxes starts in April

 

Taxpayers: Watch Out for Scam Calls

WASHINGTON – Starting this month, the Internal Revenue Service will begin sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies.

The new program, authorized under a federal law enacted by Congress in December 2015, enables these designated contractors to collect, on the government’s behalf, unpaid tax debts. Usually, these are unpaid individual tax obligations that are not currently being worked by IRS collection employees and often were assessed by the tax agency several years ago.

Taxpayers being assigned to a private firm would have had multiple contacts from the IRS in previous years and still have an unpaid tax bill.

“The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights,” said IRS Commissioner John Koskinen. “The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people. In reality, those taxpayers whose accounts are assigned as part of the private collection effort know they have a tax debt.”

The program will begin this week with a few hundred taxpayers receiving mailings and subsequent phone calls, with the program growing to thousands a week later in the spring and summer. Taxpayers with overdue taxes will always receive multiple contacts, letters and phone calls, first from the IRS, not private debt collectors.

How the New Program Works

The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA). First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account is being assigned to a PCA and giving the name and contact information for the PCA. This mailing will include a copy of Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.

Only four private groups are participating in this program: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. The taxpayer’s account will only be assigned to one of these agencies, never to all four. No other private group is authorized to represent the IRS.

Once the IRS letter is sent, the designated private firm will send its own letter to the taxpayer and their representative confirming the account transfer. To protect the taxpayer’s privacy and security, both the IRS letter and the collection firm’s letter will contain information that will help taxpayers identify the tax amount owed and assure taxpayers that future collection agency calls they may receive are legitimate.

The private collectors will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act, and like IRS employees, must be courteous and must respect taxpayer rights.

The private firms are authorized to discuss payment options, including setting up payment agreements with taxpayers. But as with cases assigned to IRS employees, any tax payment must be made, either electronically or by check, to the IRS. A payment should never be sent to the private firm or anyone besides the IRS or the U.S. Treasury. Checks should only be made payable to the United States Treasury. To find out more about available payment options, visit IRS.gov/Payments.

Private firms are not authorized to take enforcement actions against taxpayers. Only IRS employees can take these actions, such as filing a notice of Federal Tax Lien or issuing a levy. To learn more about the new private debt collection program, visit the Private Debt Collection page on IRS.gov.

Watch out for Phone Scams

The IRS reminds taxpayers to be on the lookout for scammers posing as private collection firms. The IRS will be watching for these schemes as the collection program begins, and this effort will include working with partners in the tax community and law enforcement about emerging scams.

People should remember that these private collection firms will only be calling about a tax debt the person has had – and has been aware of – for years and had been contacted about previously in the past by the IRS.

“Here’s a simple rule to keep in mind. You won’t get a call from a private collection firm unless you have unpaid tax debts going back several years and you’ve already heard from the IRS multiple times,” Koskinen said. “The people included in the private collection program typically already know they have a tax issue. If you get a call from someone saying they’re from one of these groups and you’ve paid your taxes, that’s a sure sign of a scam.”

If taxpayers are unsure if they have an unpaid tax debt from a previous year – which is what the private collection firms will handle – they can go to IRS.gov and check their account balance: www.irs.gov/balancedue. If the account balance says zero, that means nothing is due, and you typically wouldn’t be getting a contact from the IRS or the private firm.

Whether or not a taxpayer’s account is assigned to a private collection agency, the IRS warns taxpayers to beware of scammers pretending to be from the IRS or an IRS contractor. Here are some things the scammers often do but the IRS and its contractors will never do:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes, and if a case is assigned to a PCA, both the IRS and the authorized collection agency will send the taxpayer a letter. Payment will always be to the United States Treasury.

Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.

Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Ask for credit or debit card numbers over the phone.

“Unexpected and threatening calls out of the blue from someone saying they’re representing the IRS to collect a tax debt is a warning sign people should watch out for,” Koskinen said.

For more information, visit the “Tax Scams and Consumer Alerts” page on IRS.gov.

Don’t Wait to Hear from the IRS or a Contractor

As always, the IRS encourages taxpayers behind on their tax obligations to come forward and either pay what they owe or set up a suitable payment plan. This means there’s no need to wait for a phone call or letter from the IRS or any of its contractors.

Frequently, taxpayers qualify for one of several payment options, and taking advantage of them is often easier than many people think. These include the following:

Most people can set up a payment agreement with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement to set up a monthly payment agreement for up to 72 months. Taxpayers can choose this option even if they have not yet received a bill or notice from the IRS. With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS and qualified taxpayers can avoid the filing of a Notice of Federal Tax Lien if one was not previously filed. Alternatively, taxpayers can request a payment agreement by filing Form 9465. This form can be downloaded from IRS.gov and mailed along with a tax return, bill or notice.

Some struggling taxpayers may qualify for an offer-in-compromise. This is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination regarding the taxpayer’s ability to pay. To help determine eligibility, use the Offer in Compromise Pre-Qualifier, a free online tool available on IRS.gov.

“If people have a problem paying their tax bill, we encourage them to reach out to us,” Koskinen said. “We have many programs designed to help people who are having trouble meeting their tax obligations. It’s better to reach out to us sooner rather than later for help, because interest and penalties on unpaid taxes can add up quickly.”

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Secrets smart investors use year-round to save on their taxes

TAX-Secrets-smart-investors

(BPT) – Come tax time, many people work to locate tax breaks. While this is always a smart financial move, a little-known way to help build your net worth is to keep taxes top of mind throughout the entire year.

Reducing taxes means you keep more of what you earn, according to Nick Holeman, a financial planning expert at Betterment.com.

“You can’t control the stock market, but you can control some of your taxes,” Holeman said. “Knowing how your investments affect your tax bill can help you save money not just on April 15th, but for years to come.”

Check to see whether your long-term investment strategy is running efficiently with these tips from Holeman.

Invest your tax refund: One smart place to invest your tax refund is in an IRA. Normally, investors might divert a portion of the refund into this account as part of a well-rounded investment strategy and claim the deductions for next year’s tax time. Invest your refund, and you may get a portion of that back in tax savings. Stay in the habit of investing that refund if you can and watch those small returns add up over time.

Think several moves ahead: Investing is complex and from time to time you will have to sell some of your investments; everybody does. It might be to rebalance your portfolio or maybe your goals have changed and your investments no longer match their intended purpose.

Still, smart investors need to think ahead before blindly selling parts of their portfolio. This is because selling could potentially lead to taxes. By carefully choosing which investments to sell, you can help minimize that hefty tax consequence.

One way to do this is to partner with an investment company that has the tools to make this information easy to access and understand. Betterment.com, for example, offers Tax Impact Preview, which lets investors see estimated potential tax on a sale before making the trade. If you don’t think the pros outweigh the cons, don’t do it.

Reorganize your investments: Another way to potentially leverage even small tax advantages into long-term growth is to build your portfolio like an energy-efficient engine, built to run for more miles with less need to refuel. You can help accomplish this by reorganizing your portfolio. Move inefficient investments like international stocks and other assets that are taxed more often into a tax-deferred account, such as an IRA or a Roth IRA. That way, you can enjoy the high growth for less tax. Then, move less-taxed assets, such as municipal bonds, into taxable accounts.

Benefit from losses: Help keep your portfolio in balance by selling off the laggards and replacing them with a similar investment. You can receive a tax deduction from your losses that can help cancel out the taxes you owe on assets that have gains. This is done automatically for investors at many automated services through a strategy called tax loss harvesting. Smart investors should always remember that investments involve risk and may result in loss.

Give to a worthy cause: While it’s important to secure your future, many investors see community support as an important goal. Consider donating a to a nonprofit organization in your community. Not only are you helping to improve the quality of life in your locale, you can potentially claim a deduction from your income tax. It can pay to do the right thing.

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