I recently came across I-Can, a free Web-based tax preparation application. While I like the fact that it's free, I found the site's security features to be flawed. I was able to access the PDF copy of the same tax return I was working on from a completely separate computer without even being logged into my user account. Which is too bad, because we definitely need more free tax software.

Car buyers can deduct their sales tax expense when purchasing a new vehicle. This deduction, available for 2009 only, is different than the existing itemized deduction for sales taxes. The differences between the two deductions are subtle. Here's a question I recently received about this new sales tax deduction: Read more...

If you receive an email purporting to come from the Internal Revenue Service, chances are it's a scam. The IRS never initiates contact with taxpayers via email. And even dealing with the IRS as frequently as I do, I have never dealt with the IRS via email concerning clients' tax issues.

Here's a copy of an email floating around right now that was forwarded to me by a client. I'll paste the email verbatim, and point out all the tell-tale signs of why this email is a scam in boldface.

------ Forwarded Message
From: Internal Revenue Service (irs@tax.com)
Reply-To: (irs@tax.com)
Date: Mon, 6 Jul 2009 16:30:44 -0700
Subject: Tax Notification

Document
Tax Notification
............................................................................................................

We are pleased to inform you that upon review of your fiscal activity we have determined that you are eligible to receive a tax refund of $246.30 under section 501 (c) (3) of the Internal Revenue Code. Please submit the tax refund request and allow us 3-6 days in order to process it.

To get your refund, please access the IRS e-file form.

IRS e-file form (http://tradef.static.otenet.gr)

............................................................................................................

Note: For security reasons, we will record your ip-address, the date and time. Deliberate wrong inputs are criminally pursued and indicted.

Note: Because this letter could help resolve any questions regarding your exempt status, you should keep it in your permanent records.

David Morgan
Director, Tax Refunds Department

------ End of Forwarded Message

The mistakes?

1. The IRS Web domain is irs.gov.
2. Sometimes spammers will spoof the "from" address and then use a different "reply-to" address. Although here, the addresses are the same
3. The refund amount includes cents. Refunds are usually in whole dollars.
4. Section 501(c)(3) of the tax code refers to tax-exempt organizations, so this is not relevant to refund for an individual taxpayer.
5. The URL address for the e-file form goes to a site other than irs.gov, in this case it points to a server in Greece.

In short, refunds can be requested from the IRS only by submitting a tax return. Returns can be e-filed only through authorized e-file providers (which means through a tax professional's office or through tax software packages). If you have questions about your refund, you can always call the IRS directly at 1-800-829-1040.

Related: Fake IRS Emails and Suspicious e-Mails and Identity Theft.

People often ask if the husband, or wife, can claim the other spouse as a dependent. The following scenario that was emailed to me pretty much outlines the basic situation:

"My husband is the only earning member & he supports all our expenses. For the tax year 2009 can my husband claim me & my children as dependants?"

Spouses are not dependents of each other. Instead, husbands and wives can choose either to file a joint tax return or to file two separate returns. Filing jointly provides you with two personal exemptions for the husband and wife, plus one personal exemption for each dependent. Filing jointly also provides a standard deduction of $11,400 for 2009. You can also itemize, if that figure will be higher than your standard deduction.

How do all these numbers work together? These standardized about are tax deductions you can take, which reduce your income before any tax is calculated. Or to phrase it another way, these deductions create a zero-percent tax bracket for you. For a married couple with no dependents, their first $18,700 of income is tax free. After that, their income would start being taxed using various tax rates.

Generally, taxes are lower when filing jointly, as the tax brackets are much wider (thereby allowing more income to be taxed at lower rates) and joint filers are eligible for a wider range of tax deductions and credits.