Posted in general
The Equifax Data Breach: What to Do
September 8, 2017 -- by Seena Gressin, Attorney, Division of Consumer & Business Education, FTC
If you have a credit report, there’s a good chance that you’re one of the 143 million American consumers whose sensitive personal information was exposed in a data breach at Equifax, one of the nation’s three major credit reporting agencies.
Here are the facts, according to Equifax. The breach lasted from mid-May through July. The hackers accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people. And they grabbed personal information of people in the UK and Canada too.
There are steps to take to help protect your information from being misused. Visit Equifax’s website, www.equifaxsecurity2017.com. (This link takes you away from our site. Equifaxsecurity2017.com is not controlled by the FTC.)
Find out if your information was exposed. Click on the “Potential Impact” tab and enter your last name and the last six digits of your Social Security number. Your Social Security number is sensitive information, so make sure you’re on a secure computer and an encrypted network connection any time you enter it. The site will tell you if you’ve been affected by this breach.
Whether or not your information was exposed, U.S. consumers can get a year of free credit monitoring and other services. The site will give you a date when you can come back to enroll. Write down the date and come back to the site and click “Enroll” on that date. You have until November 21, 2017 to enroll.
You also can access frequently asked questions at the site.
Here are some other steps to take to help protect yourself after a data breach:
Check your credit reports from Equifax, Experian, and TransUnion — for free — by visiting annualcreditreport.com. Accounts or activity that you don’t recognize could indicate identity theft. Visit IdentityTheft.gov to find out what to do.
Consider placing a credit freeze on your files. A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts.
Monitor your existing credit card and bank accounts closely for charges you don’t recognize.
If you decide against a credit freeze, consider placing a fraud alert on your files. A fraud alert warns creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you.
File your taxes early — as soon as you have the tax information you need, before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job. Respond right away to letters from the IRS.
Visit Identitytheft.gov/databreach to learn more about protecting yourself after a data breach.
Last Updated by Admin on 2017-09-19 06:05:15 PM
Posted in general
Tax professionals often field questions from our clients, friends and family about things that may be or should be deductible. One we hear and see quite often relates to clothing one purchases specifically for work when the employer requires it. For example, a person working in construction may be required to wear boots that meet certain specifications. A restaurant employee might have to wear a black shirt every day. A pilot has to wear a uniform to work each day.
In these three examples, only the pilot’s uniform is tax deductible. The IRS states that if the clothing can be adapted and worn away from work, it is not deductible. The black shirt or work boots can be worn outside of work without causing any question. The pilot’s uniform, on the other hand, can’t be adapted to appear like street clothes. Further, the pilot’s uniform is a very specific uniform, required by the airline. The other examples are not likely as specific, meaning the work boots can be any brand, as long as they have steel toes. If the black shirt was embroidered with the employer’s logo and needed to be purchased directly from the employer, it would be deductible.
Deductible business expenses are limited to 2% of your AGI, Adjusted Gross Income. They are combined with other miscellaneous expenses such as investment expenses and tax preparation fees to help you reach this 2% threshold.
Last Updated by Admin on 2017-08-09 07:57:23 PM
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How long should I save my old tax returns? What about the supporting documents? These are questions we get asked all the time. Depending on the document, we might recommend you hold it for as little as one year or as many as forever!
Let’s begin with documents you can dispose of after one year. These include your bank or credit card statements and monthly statements from other creditors. If these statements are being used to specifically support an item on your tax return for which you have no other documentation, they should be held an additional three years as noted below.
Documents supporting your tax return should be kept for three years after the filing of your tax return. During this period of time, you may amend your original tax return, so the documents may become useful again. Further, any inquiries by the IRS during this time may necessitate these records.
Income tax returns should be kept for a period of seven years. This is the period the IRS has to audit tax returns.
If at any time you file a gift tax return, it should be retained permanently. The information from the gift tax return ultimately appears on your estate tax return, making it necessary to keep these records permanently.
Other documents should be kept as long as you might need them. For example, if you have documents that support the basis in your home, you need to keep those records as long as you own the home – plus three more years because you’ve used that basis to compute your tax liability in the year the home is sold. Other documents supporting basis in stocks or other assets should be held in the same manner.
As always, if there are any questions or unique situations, please do not hesitate to contact our office to inquire.
Last Updated by Admin on 2016-12-03 10:06:03 PM
Posted in general
When To Call Your Accountant
What is your relationship with your accountant like? Is it like an old acquaintance you only talk to once a year? Always an uncomfortable conversation, but kind of necessary? Is it like a good friend who knows all your deepest secrets (let’s face it, we do!)? Like a spouse, who you trust to support you through those tough times, helping you to make difficult decisions and see things clearly?
The truth is, our relationship with our clients can be like any of these at different points in our client’s lives. Sometimes it’s necessary to reach out to your accountant regularly to check in, ask questions and make sure they understand what you’re doing. Other times, your financial life is very straightforward and predictable, and it’s very easy for you and your accountant to go with the flow.
As accountants, we like to see ourselves as the trusted advisor for all of our clients. We know frequent communication is not always necessary or reasonable, but all too often we find ourselves picking up the pieces of a transaction that took place without our knowledge or advice. Sometimes that lack of knowledge results in a very painful result for the client. Do you ever wonder if you should be calling your tax professional before you do something? Here are several examples of times when we recommend you call us:
You’re getting married or divorced
You are moving to a new state
You’re considering buying or selling a business
Your financial planner (stock broker) recommends you sell a significant amount of your investment portfolio (even if it is only to invest the proceeds elsewhere)
You’re buying or selling your home
Your kids are graduating from college
You’re taking on a new job and the pay is different
Your employer is paying you a large bonus
You have deferred compensation and will be receiving it soon
You’re planning to retire in the next 12-24 months
You recently received a large sum of money from an inheritance
In most of these situations, it is best if you call your accountant before the transaction occurs. In some cases, we might help you structure the operation in a way that can help save tax dollars currently or in the future. If for any reason you weren’t able to contact your accountant before the event happens, please call immediately after. If there is a tax consequence, you want to have as much time as possible to save for the tax bill, and you may be required to pay estimated taxes as a result of the change in income.
If you find yourself in any of the scenarios listed above, or if you have any questions about your specific situation please give our office a call to discuss so we can help you plan for the event before it takes place.
Last Updated by Admin on 2016-10-26 06:27:17 PM
Posted in general
Steps to Take When a Loved One Dies
When a loved one passes away, the survivors are often left with an overwhelming number of issues that need to be settled. If you are a personal representative for the estate, you need to make sure you understand your duties and enlist help where needed. Those duties include identifying estate assets, protecting those assets, paying claims and debts of the estate, filing income tax returns and distributing assets in accordance with the prevailing Will or Trust document.
We realize the work involved can be stressful and time consuming. The Family and Friends section of AARP's website offers tools to help you through this difficult time. In addition, we compiled the following checklist as a general guide of items to take care of in the weeks after the funeral.
From a tax perspective, there are certain general responsibilities an estate administrator must fulfill. First, a final Form 1040 generally must be filed for the year of death. The return is typically due on April 15 of the year following the date of death. Second, fiduciary income tax returns (Form 1041) might also be required for the estate. And third, the estate may be required to file an estate Form 706 return if the total value of assets transferred from the decedent to beneficiaries exceeds a certain level. Certain states may also have a separate estate tax filing requirement. A tax preparer can help you with the timing of the returns and offer suggestions on how to minimize the tax due.
Last Updated by Admin on 2016-10-11 02:26:30 PM
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Big changes are on the horizon for the Free Application for Federal Student Aid (FAFSA) process. These changes will make the process more efficient and easier for those with college-age students in their household.
First, beginning with the 2017-18 school year, you’ll be able to complete the FAFSA earlier. You can file the form as early as October 1, 2016, a full three months sooner than in the past. This new, earlier date is a permanent change from this point forward.
Second, because you can access the application so much earlier, you now can use your tax return from the prior year to complete the form. This means that for the 2017-18 FAFSA, you’ll be able to use your 2015 tax return to complete the form.
Historically, FAFSA filers have needed to complete their tax returns early in the season in order to complete the form in time for the deadlines set by their schools (often on or around March 1). In some cases, filers are unable to complete their tax returns soon enough to use it to complete the FAFSA. This change removes the pressure to have tax returns completed early in the calendar year.
For additional information about these changes and important upcoming due dates, please click here.
Last Updated by Admin on 2016-09-08 02:52:27 AM