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Tuesday, August 25, 2015

Steps to Take if You Suspect Identity Theft

Steps to Take if You Suspect Identity Theft

In May of this year, the IRS became the latest target of hackers, who accessed more than 100,000 taxpayer accounts.  How can you protect yourself if you suspect your identity is threatened?

The IRS recommends taking these steps:

1. File a police report.

2. Go to https://www.ftccomplaintassistant.gov and file a complaint with the Federal Trade Commission.

3. Contact one of the following credit bureaus to place a “Fraud Alert” on your credit report:
Equifax, www.Equifax.com, 1-800-525-6285
Experian, www.Experian.com, 1-888-397-3742
TransUnion, www.TransUnion.com, 1-800-680-7289

4. Contact your banks and credit card issuer and close any accounts that have been opened without your authorization.

5. Contact Social Security Administration at www.ssa.gov to create an account and check your earnings statement annually.

6. If you suspect you are a victim of tax-related identity theft, respond immediately to any IRS notice, calling the number provided.  (Note that the IRS will contact you via US mail, NOT phone or email!)

7. Complete IRS Form 14039, Identity Theft Affidavit. Access form and mailing instructions here: http://www.irs.gov/pub/irs-pdf/f14039.pdf

8. Continue filing and paying your taxes, even if you must file by paper.

By: Honorine M. Campisi, Senior Tax Manager

Wednesday, August 12, 2015

How to Avoid Investment Scams

How to Avoid Investment Scams

Does someone you know have the “next big thing” and want you to come on board and invest in their business or idea?  WAIT!!  Have you fully investigated all the facts?  Here are a few tips to help you avoid the wrong investment.

1. Make sure that you understand their business plan.  What are they going to do with your money?  Is there a market for what they are selling? When and how will you get to see the profits?

2. Don’t be forced into investing if you aren’t ready.  If they insist you need to invest “right now!” than you should be careful.  All investments take time to develop.  Ask questions and consult a lawyer.

3. Talk to others who have invested.  Find out if the company has met the goals they expected.  Why did they become investors?  If you cannot get this information from the business be careful.

4. Talk to the company’s lawyers.  Do they have an attorney and do they understand the business and its plan?  Do you feel better after speaking with him?  Does he put your mind at ease?

5. Ask questions!  Have they gone to a bank for a loan?  Why do they need your funds?  Who else has been approached for funds?  Why haven’t others invested?

6. Don’t be shamed into investing.  If they make you feel “silly” for asking so many questions they might have something to hide or might be hard to work with.  The lines of communication should be open and honest.

7. Don’t feel like you are missing out if you don’t invest now.  Don’t let the company tell you this is a once in a lifetime opportunity.  You do not want to be caught up in spending the money that you are going to make on company profits before they exist.  Step back and resist the fear and urgency.

8. Get to really know the person and business you are investing in.  Check them out and make sure that all you find out makes sense.

9. If you are investing a sizable amount, hire your own attorney.  Find one who can help you make sure the deal is legitimate and you are protected.  They should have experience in this field.

Follow these steps to avoid becoming a victim.  Make sure you do your due diligence and remember that if something seems too good to be true it probably is!

Happy Investing!

By Chris Murphy, Senior Accounting Manager

Monday, July 27, 2015

Tips for Renting Your Vacation Home This Summer

Tips for Renting Your Vacation Home This Summer

One of the ways to defray the costs of owning and maintaining a vacation home, is to rent it out when you are not using it.  Income earned from those rentals may be reportable on your income tax return. For income tax purposes, a vacation home may include a house, apartment, condo, mobile home, boat, or similar property.  In order to be considered a “home”, the vacation property must have basic living accommodations, such as sleeping space, a toilet, and cooking facilities.  Read on for some helpful tips.

  1. Income and expenses related to renting a vacation home are reported on Schedule E of your personal income tax return.
  2. As long as you (or your family) also use the home, your rental expenses cannot exceed the rent you receive (meaning you cannot claim a loss.)
  3. Special rules must be followed when you rent out a home that you also use personally.  Expenses must be allocated based on the number of days the unit is rented or available for rent, and the number of days it is used by you and your family.  Any expenses that cannot be deducted on Schedule E, may be deducted on Schedule A.
  4. If you you rent a vacation home for less than 15 days a year, you are not required to report the rental income on your tax return.  In this case, any mortgage interest or real estate taxes for the home would be deducted on Schedule A.

By: Honorine M. Campisi, Senior Tax Manager

Tuesday, July 14, 2015

Are You Feeling Lucky This Summer?

Are You Feeling Lucky This Summer?

Do your summer plans include testing your luck at the racetrack or casino?  Did you realize that gambling winnings are taxable income?  Don’t let that dampen your fun.  Read on for helpful tax tips and good luck!

1.       Winnings can include winnings from raffles, lottery, casinos or horse races. 

2.       You may or may not receive a Form W-2G from the payer.  Information on that form is also   reported  to the IRS.  If you do not receive this form, you are still  required to report your winnings, so you  must maintain good records of your winnings. 

3.       If you itemize your deductions, you can partially offset some of your winnings.  Gambling losses can be deducted up to the amount of gambling income   reported on your tax return.  Unfortunately, if you claim the standard deduction, you do not get to benefit from your losses!

4.       Make tax time easier by keeping a folder with win and loss receipts, statements or tickets.

 By: Honorine M. Campisi, Senior Tax Manager

Tuesday, June 30, 2015

The Dependent Care Credit and Summer Camp

The Dependent Care Credit and Summer Camp

Did you know that costs for summer camp may qualify for a tax break via the Child and Dependent Care Credit?!  This credit is available for parents who pay for child care so that they can work or look for work.  Read on for great tips!

1. Filing status counts – if you are married, you must file jointly to get the credit.  You are not eligible if you are married and file separately.  There are exceptions if you are legally separated or live apart from your spouse.

2. Camp costs must be for your dependent child / children, who are under age 13 at time of care.

3. Camp costs must be incurred so that you and your spouse can work or look for work.  One spouse can be treated as working for any month that they are a full time student.

4. You and your spouse must each have earned income from wages, salaries, tips or self-employment net earnings.

5. You will need the name, address and taxpayer identification number of the camp provider.  You should save your receipts and records to make it easier to claim the credit on your tax return.

6. The amount of the tax credit is between 20% - 35% of your allowable expenses.  Your applicable percentage is based on your income.

7. There is a limit on allowable expenses of $3,000 for one qualifying child and $6,000 for two or more qualifying children.

8. The following costs do not qualify for the credit: costs for overnight camps or summer school tutoring costs, care provided by a spouse or your child who is under age 19, or care given by a person you can claim as your dependent.

9. If you or your spouse receives dependent care benefits from an employer, the amount of your allowable expenses will be reduced.

By: Honorine M. Campisi, Senior Tax Manager