Welcome to DOR's Tax Talk Blog
Tax Talk is a weekly blog published each Wednesday by the Indiana Department of Revenue (DOR) that discusses tax tips, DOR programs, and helpful information for tax preparers. During tax season blogs are posted on both Mondays and Wednesdays.
Most Recent Blog Posts
Over $9.7 million in Tax Fraud Prevented in 2018
September 20, 2018
A 130 percent increase? Yes, you are reading that right! It’s true. DOR’s fraud program stopped over $9.7 million in fraud this year, a 130 percent increase from 2017.
So, how did we do it?
Not by detecting more identity theft fraud, which actually goes down each year due to advanced technologies stopping fraudsters before they’re successful, but by finding new types of fraud to deter.
As the income tax return fraud program has matured, DOR staff has enacted new prevention programs. The biggest fraud prevention success of 2018 was the Schedule C verification program, followed by the excess withholding program.
The Schedule C verification program examines the amounts reported on the individual’s federal Schedule C form. A Schedule C is most often filed by a business owner to report income or loss from the owner’s business. Each business owner must maintain records to support all income and expenses. These records are then reviewed if that individual was selected to have their Schedule C verified. In 2018, over $5 million was adjusted based on these examination requests.
The excess withholding program identifies individuals who were artificially inflating their withholding credit to get a larger refund or reduce the amount due. This program was implemented in February 2018 and prevented more than $1.1 million in excess refunds from being paid to fraudsters. Not only that but, if an individual was identified as inflating their withholding credit, DOR staff examined prior year returns to see if this was a pattern. If this pattern existed, the individual’s prior year returns were adjusted to appropriately reflect the withholding credit.
DOR’s fraud program has now stopped over $119 million in tax fraud since its inception in 2014. To learn more visit the Tax Fraud website.
Five Steps to Maximize Your 529 Plan
September 12, 2018
Like saving money? Who doesn’t! So, how about learning how you can save money on your child’s future education?
By creating a 529 plan, parents and other family members can contribute to education costs. The 529 tuition plans will grow each year and the contributions are not taxed. Hoosiers can get a tax credit each year by making eligible contributions. However, there’s more benefits to 529 plans than just the tax credit.
Here are five tips to help you maximize your 529 account’s potential:
1. Your 529 plan can pay for more than just college. As of 2018, federal law allows withdrawals up to $10,000 per year per student for tuition expenses in connection with enrollment and attendance at an elementary or secondary public, private or religious school (K-12 tuition).
2. Open a plan as soon as possible! It takes as little as $10 and 15 minutes to open an account. Watch the money grow exponentially as it’s invested.
3. Get help from family. Grandparents and other family members who plan on helping pay for school can open their own 529 accounts and get the same tax benefits as parents. Instead of another toy, suggest that friends and family members give the gift of education by making one-time contributions to the child’s 529 plan via Ugift.
4. Contribute as much as you can. Indiana taxpayers (resident or non-resident, married or individual), are eligible for a state income tax credit of 20 percent of contributions to eligible accounts, up to $1,000 credit per year.
5. Review and update your Upromise account. Upromise helps you save by earning rewards on shopping, dining, and travel. These rewards can be automatically deposited into your child’s 529 account or used to pay on student loans balances. Did you get a new credit or debit card with a chip this year? Make sure it and your loyalty cards are linked to your account. Every dollar counts!
A few minutes now can put you ahead of the class when it comes to college savings.
Read more about 529 plans on the Indiana Education Savings Authority website.