Tax tips for that first job

Out of school and into the workforce. If the expression describes you or a family member this summer, filling out Form W-4 properly can make your first job less taxing.

Here’s why: The amount of federal income tax withheld from your wages depends on how you complete IRS Form W-4, the “Employee’s Withholding Allowance Certificate,” which tells your employer your marital status and the number of withholding allowances you’re claiming.

Withholding allowances are similar to the number of dependents you have. Claiming more allowances generally reduces the income tax deducted from your paycheck, but you can only claim the number you’re entitled to.

Think too much tax will be withheld? As long as you expect to work no more than 245 days for all employers during 2015, you might want to consider making a written request to have your federal withholding calculated using an alternative method. The “part-year employment method” of withholding can boost your net pay. Just be sure to complete a new Form W-4 next January.

Caution: Estimate your annual income carefully. Form W-4 affects only the amount of tax withheld, not the total tax that will be due with the tax return you’ll file at the end of the year.

You may also be entitled to tax breaks such as above-the-line deductions for moving expenses and student loan interest. Please call for information and advice.

Business survey identifies taxes as biggest burden

In a survey of small businesses conducted by the National Small Business Association, 59% of respondents said taxes were more of an administrative burden than a financial one. Most businesses put payroll taxes at the top of the list of taxes with the greatest administrative burden. Payroll taxes also outranked other taxes, such as income, property, and sales taxes, as the top financial burden to businesses.

IRS publishes help for ID theft

The IRS websites contain useful information on how to avoid becoming a victim of identity theft, plus steps to take if you do become a victim.

Here are the warning signs that you may have had your identity stolen:

  1. The IRS notifies you that more than one tax return was filed using your social security number.
  2. You’re notified that you owe additional tax or you’ve had collection actions taken against you for a year you did not file a tax return.
  3. IRS records indicate you received wages from an employer unknown to you.

If you become a victim, the IRS recommends that you take the following steps:

  1. File a police report.
  2. File a complaint with the FTC.
  3. Contact one of the three credit bureaus to place a fraud alert on your account.
  4. Close any financial accounts opened without your permission.
  5. Respond immediately to any IRS notice, according to the instructions given.
  6. Complete IRS Form 14039 “Identity Theft Affidavit.”
  7. Continue to pay your taxes and file your tax return, even if by paper.