Our man Abelicio Padilla has been blogging about his personal financial situation and he has been seeking advice for making sound money decisions. I wrote this piece as my input into his situation. If you'd like more background before you proceed, read Abelicio Padilla's interesting blog posts here.

Now here's my input:

It sounds like you have a plan Abe. However, I'd like you to think a little more about if you really want to sell that house. The market is down right now which means you probably won't get your best selling price for it. Also, did you consider that if you sell the house, you'll lose your mortgage interest deduction when you file your taxes? That deduction loss will cut into the monthly savings you expect to get by selling. Even though you won't notice it month to month, you'll feel it when you file your yearly income taxes. Consider also the upset that moving can cause. It's expensive. It will disrupt operations. In the long run It could cost you more than you think.

Spanish-speaking taxpayers have tons of resources available to them from the Internal Revenue Service. Many of the pages on the IRS website are translated into Spanish, including those linking to forms, publications, and instructions. Several pages about tax scams are also translated, and there are resources detailing tax credits too.

Taxpayers can also receive help in Spanish over the phone. The free TeleTax service is available in both Spanish and English, and the service offers help on over 150 tax topics. It can also be used to check on the status of your refund. TeleTax is available 24 hours a day, 7 days a week at 800-829-4477.

Spanish-speaking IRS representatives are also available in person by calling the IRS customer service line at 800-829-1040.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Tax Freedom Day falls on April 23 this year, according to the Tax Foundation. Each year the Tax Foundation calculates how many days Americans must work to pay all of their taxes, assuming all of your wages would go to pay taxes first. Then the remaining days of the year, all of your wages are assumed to be kept by you.

This is just one measure of the tax burden placed upon Americans, and it's based upon data released by the Congressional Budget Office. I don't know about you, but I do feel overburdened by taxes, especially when I have little say in how my tax money is spent.

And here's how the days are broken down: This year Americans must work 74 days to pay for all their federal taxes, and an additional 39 days to pay all state and local taxes. In comparison, Americans work 60 days to pay housing expenses and 35 days to pay clothing expenses. Fifty days are worked to pay for health care, and 29 days are worked to pay for transportation costs.

This post was written as part of a series on tax excuses that don't work.

One common argument against paying income taxes is that money received for providing labor or personal services isn't really income. They say that there really is no gain that can be taxed when physical labor is exchanged for money.

Tax protestors further say the tax laws only apply to profits, and there's really no profit in receiving money for services because the money was exactly equal to the effort put forth by the person. If the effort and the money are equal, there can't be profit. Or so they say.

A cute term used to avoid the use of the word "wages" is a "time reimbursement transaction." But no matter what you call it or how you dress it up, your wages are taxable income.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Tax protestors suggest filing a tax return that shows zero income, so that your resulting income tax will be zero. That's all fine and well, unless of course you have income. Then that nifty "zero return" is a lie, and you're opening yourself up to lots of problems.

It gets really fun when a taxpayer has had income tax withheld on their wages, and they file the "zero return" to try to get that money back. The taxpayer attaches a W-2 to the tax return, and the IRS quickly sees that they didn't have zero income. They had the income on the W-2 and the income tax return is immediately flagged as incorrect.

And you don't only have to pay taxes owed when you file this false "zero return." Now you may have to contend with penalties for filing a frivolous return and for failure to file (failing... because you didn't provide anything close to the right information). The IRS says you didn't make a reasonable attempt to comply with the law, so now you get penalties.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Wouldn't it be nice to get out of paying taxes just by not being a citizen of the United States? Well it's not quite that easy.

The scam goes like this... A tax protestor says that he is rejecting his U.S. citizenship and is instead a citizen of the state in which he lives. He says that only U.S. citizens are subject to tax laws, therefore he's exempt and doesn't have to pay any income taxes.

That all sounds lovely, but the U.S. Constitution says that doesn't work. You're a citizen of the U.S. and of the state you live in, and you can't just pretend you're not a U.S. citizen. And anyway, U.S. tax laws apply to all citizens and residents.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

Those opposed to paying federal income taxes often claim that the whole system is optional and they choose not to participate in it. They claim that there is no law requiring them to pay taxes and they demand that someone show them the law that requires them to pay income taxes.

Well, okay. Here's the law: Section 1 of the Internal Revenue Code. "There is hereby imposed on the taxable income of [insert status of taxpayer – single, married, etc] ..., a tax determined in accordance with the following table..."

Additional sections of the tax code elaborate on the requirement to file tax returns and pay taxes. Nowhere in the tax code is there anything about taxes being optional. And yes, the tax code is in fact the law of the land regarding taxes in the United States.

You should also note that you can't get out of paying taxes by saying that you don't understand what or how to do it. That doesn't wash with the IRS. Find a tax preparer.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

The Internal Revenue Code specifically says that a "taxpayer" is a person subject to the code, and that "person" includes individuals, trusts, estates, partnerships, and corporations. Tax protestors somehow interpret this to mean that they are not really a person, and therefore not a taxpayer.

I don't know about you, but in my world, people are people. A person is a person. And the tax code applies to a person, so quite simply, people must pay taxes. Was that confusing enough?

This argument against paying taxes might be the most frivolous and ridiculous of all. And while it sounds silly to most of us, there are people trying to assert this argument against paying taxes. But I don't recommend it. You open yourself up to both civil and criminal penalties for trying to avoid taxes with these kinds of lies.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

The Fifth Amendment of the U.S. Constitution gives people the right to not incriminate themselves in criminal matters. This means they don't have to testify in criminal trials of themselves. They don't have to tell on themselves in regard to crimes that they've committed or been accused of committing.

The filing of tax returns is something completely different, however. Yes, it's possible that a tax return could later be used in a criminal tax trial against you, but that possibility is very remote. Especially if you're honest when you file and pay your taxes. So the filing of tax returns is not equivalent to self-incrimination.

It is merely the reporting of income which will be taxed by the government. You're required to report your income on tax returns, and the U.S. Constitution doesn't exempt you from that.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

This post was written as part of a series on tax excuses that don't work.

While we may all wish this one was true, it's not. Quite clearly, the Internal Revenue Service is a bona fide federal agency and has the authority to collect income taxes from us.

Tax protesters claim that in order for the Internal Revenue Service to be a real agency of the United States, it should have been created through an act of Congress. Because it was not created that way, it's just a private corporation and we don't have to cooperate with them. Or so they say.

Sorry... the Secretary of the Treasury has the authority to enforce tax laws and has the power to create an agency to help him. That agency just happens to be the IRS, and so long as the Secretary of the Treasury wants the IRS to exist, it can and will enforce income tax laws. So when IRS agents come knocking at your door, you better believe that they really are representatives of a Federal agency and they really do have the authority to collect taxes from you.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Whether someone can do their own taxes is an interesting question. The U.S. tax code gets more and more complicated with each passing year. Another year, another set of rules added to the previous set of rules.

If you have a very simple and straightforward tax situation, with a job, a house, and a family, it might be fairly easy for you to fill out your forms online with the help of TurboTax or one of the free filing programs offered by various companies. But once you add things like self-employment income, distributions from retirement funds, capital gains taxes, and any of a zillion of other items that must go on your tax returns, it's probably too complicated for the average person.

When in doubt, get some help. If you can't afford to hire a tax preparer, many cities have volunteer tax assistance programs offered through local colleges or non-profit organizations. See if there is one available near you.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Almost all married taxpayers will get the best results if they file their tax return jointly. There are very few situations in which filing separately makes sense, and it almost always costs the taxpayers more money to do so. The two most common situations in which it makes sense to file separately:

• You and your spouse are in the process of divorcing, and are legally separated. If you don't trust one another, it may make sense to file separately, limiting your tax liability to only the items for which each of you are legally responsible. If you can't seem to cooperate long enough to prepare and file a joint tax return, it probably also makes sense to file separately. If one party is completely non-compliant when it comes to filing tax returns, the other spouse is better off filing a separate return in order to meet her or his obligations regardless of what the other spouse does.
• It may make sense to file separately if both spouses are itemizing deductions and one has high medical expenses compared to her or his income. Medical deductions are only deductible if they exceed 7.5% of income, and a spouse with low income and high medical expense may therefore benefit from filing separately.
  

Couples who are married and file separately almost always pay more tax than if they would have filed jointly, so keep that in mind when deciding whether to file jointly or separately.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

A tax credit is one of the most valuable pieces of the tax calculation that a taxpayer could have. After you calculate the amount of taxes you are supposed to pay, a credit is subtracted from that amount. So the credit directly reduced what you pay to Uncle Sam.

A credit is better than a deduction, because a deduction just reduces the amount of your income which is taxed. In contrast, the credit reduces the amount of taxes you pay. The IRS has a number of credits available to taxpayers, including: the child tax credit, the child care credit, education credits, earned income credit, foreign tax credit, and retirement savings account credit.

Make sure you're taking advantage of all the credits you're entitled to.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

There's nothing more aggravating when preparing an income tax return than missing key pieces of information or having inaccurate information. Whether you're going to prepare your taxes yourself with the help of Turbo Tax, or you're having a professional do them, get organized before you start to make the process easier.

Gather the social security numbers of everyone who will be included on the tax return. This is especially important if you've had a new baby. Get together all the forms you've received in the mail like W-2 wage statements, 1099s for dividends and interest, 1098s for mortgage interest paid, receipts for property taxes paid and charitable contributions made.

If you're self-employed, you'll have lots more documentation to get together relative to your business, too. And don't forget to keep all the information you've gathered with your tax return when it's done! If you ever get audited, it will make things much easier.

If you are going to file electronically, have a blank check from your checking account ready. It will make it easier when it's time to enter your bank numbers to get your refund direct deposited.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

If you're one of the millions affected by the Alternative Minimum Tax (AMT) temporary fix approved by the House of Representatives last week, you may have to wait to get your refund.

The fix is good for taxpayers, but bad for the Internal Revenue Service. Any form affected by the change won't be ready until February. So for the 3 or 4 million people who usually file in January, they may not get their refunds so early.