Audit Red Flags and To Catch a Thief
by rwilczek on Mar 8, 2019
Thought you might find these articles of interest.
Regarding the latter, when Equifax was breached on top of multiple other breaches, we suggested you may want to freeze your credit report.
Mine is still frozen so if I wanted to open a new credit card, etc. I would need to unfreeze it.
To unfreeze you need the pin number they sent you when you requested the freeze and you can unfreeze for a couple of days or permanently.
We also encourage two-factor authentication. Many of you have used it, but for those that have not, when you need to access your bank accounts or credit card and try to log in, they will text you a code so you can complete your log in.
If a thief has your info, they must also have your phone or ipad to receive text messages.
It hopefully makes it a bit more difficult to steal from you.
Thanks and be well. Rita.
Audit Red Flags
What raises eyebrows at the Internal Revenue Service?
Provided by Rita Wilczek
Are you worried about being audited? The fear may be overblown, as only 0.6% of taxpayers had their federal returns examined in 2017 (the most recent information available). That same year, only 4.3% of taxpayers with gross income before deductions of over $1 million had their returns scrutinized. Some of this is down to low staffing at the Internal Revenue Service (I.R.S.). In 2016, the I.R.S. audited 0.7% of returns, part of an overall downward trend. Still, no one likes extra stress courtesy of the I.R.S. Let’s look at some red flags that might get you extra I.R.S. scrutiny. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.1,2
Filing a paper return. Why is filing an electronic return better than using the old-fashioned paper form? It turns out that paper returns get more attention as the information is transferred through the I.R.S. as your information is recorded. Because most electronic filing options check your math, a paper return has more chance of featuring errors. More I.R.S. scrutiny leaves the door open for more I.R.S. questions.1,2
Taxable income of $1 million or more. If you are reporting that sort of income, you may want to look into hiring a professional. Taxpayers who work with an accountant raise far fewer red flags than people going the do-it-yourself route.1
Huge deductions. Is your money-losing small business venture truthfully just a hobby? Did you really donate $6,000 worth of office supplies to a charity, and do you have the receipts to back that up? The I.R.S. routinely checks returns for deductions that seem outlandish.1
Living large. Does the I.R.S. peruse social media? Yes, it does, as we all do. The I.R.S. has done good detective work for years; its investigators know to check out DMV and employment records to get a better picture of an errant taxpayer. Today, photos and posts on Facebook and Twitter can telegraph potentially valuable nuggets of information, particularly about young taxpayers who have come into wealth that their returns don’t seem to show.
Keep it simple. File early and accurately. Keep your receipts and other pertinent papers on file. Spend a little time each month arranging your financial matters, so that taxes can remain a relatively painless process.
Rita Wilczek may be reached at (952) 542-8911 or rwilczek@hirep.net
www.ritawilczek.com
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Citations.
1 - investors.com/etfs-and-funds/personal-finance/tax-audit-avoid-irs/ [2/19/19]
2 - financial-planning.com/news/what-are-a-clients-chances-of-an-irs-audit [1/29/18]
To Catch a Thief
Having your identity stolen may be costly.
Provided by Rita Wilczek
Many Americans have taken steps in recent years to protect their personal information, but savvy cybercrooks have overcome some of those defenses. A 2018 Javelin Research report found identity theft hit an all-time high in 2017, affecting an estimated 16.7 million consumers. For the first time, Social Security numbers were compromised more frequently than credit card numbers.1
If you have not taken measures to protect yourself, it may be a good idea to consider your options.
Individuals can take four basic steps to help protect themselves against identity theft. These steps are represented by the acronym SCAM.
S. Be Stingy when giving out your personal information. Make sure the person requesting the information is on a “need-to-know” basis. For example, someone who claims to be calling from your bank does not need to know your mother’s maiden name if it is already on file with the bank.
C. Check your financial information periodically. If you get hard-copy credit card or bank statements mailed to you, consider keeping these documents in a safe, secure location. Be skeptical if it appears the financial institution missed a month. Identity thieves may try to change the address on your accounts to keep their actions hidden from you for as long as possible.
A. From time to time, ask for a copy of your credit report. This report shows bank and financial accounts in your name and may help provide evidence if someone has used your name to open another account. To obtain a report, contact any of the three major credit bureaus: Equifax, Experian, or TransUnion.
M. Maintain good records of your financial accounts and obligations. Retain your monthly bank and credit card statements, either in hard-copy or digital form. Easy access to this information may make it easier to dispute a transaction, especially if your signature has been forged.
Additionally, consider these steps. Think about guarding the information on your phone the way you protect the data on your computer: with security software, data encryption, and a password necessary for basic access. You could also choose two-factor authentication at the websites of the retailers you frequent most; this potentially gives you the same degree of protection you would get with a brokerage or bank account. You could also elect to freeze your credit report at the major credit bureaus, for a small fee.1
If your identity is stolen, you may face not only out-of-pocket financial loss, but the additional cost of trying to restore your good name. Help protect yourself by using caution when sharing your personal information and keeping an eye out for warning signs.
Rita Wilczek may be reached at (952) 542-8911 or rwilczek@hirep.net
www.ritawilczek.net
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Citations.
1 - https://www.cbsnews.com/news/identity-theft-hits-record-high/ [2/6/18]