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Protecting Yourself from Tax Fraud

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We all know tax season is stressful, and January through April is the time to really buckle down, get tax forms in order, and try to get the best return possible. While help from tax preparers, online tax software, and the IRS is helpful during this time, there is the ever-looming threat of
identity theft while filing!

I discussed this topic briefly in my last blog post regarding data security, but I really want to make you aware of the different options that are readily available should you find out that someone has used your Social Security Number (SSN). With so much fraudulent activity happening during tax season—especially because many people turn to filing electronically—the
IRS itself is cracking down.

Tax fraud happens when someone uses a Social Security Number (SSN) that doesn’t belong to them, and they claim a refund. If this happens to you, and you realize you’re unable to file because a refund has been claimed using your SSN, the IRS is there to help.

First and foremost, if you choose to file electronically, you are required to submit a driver’s license number or an identification card number. This is required by the IRS in an effort to eliminate tax fraud.

Another way the IRS is clamping down on tax fraud is by encouraging tax preparers to encrypt data, so cybertheft is limited. The IRS even suggest that encryption should be made standard protocol for data security purposes. Data encryption, essentially, is translating data into a special format or code, so only people with access or a “key” are able to read the sensitive information.

“Protect Your Clients; Protect Yourself: Tax Security 101 is a awareness campaign spearheaded by the IRS. Tax tips and advice for individuals, businesses, and preparers is made easily accessible through this campaign. According to the IRS website, This campaign follows recommendations made by the Electronic Tax Administration Advisory (ETAAC), which noted
“Tax professionals ‘are at an increased risk’ of security vulnerability.

Full access to this campaign’s information, as well as a variety of other ways to avoid and take action against tax fraud, can be found at here.

—Jake

Client Data Security

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Keeping my clients’ personal information private is of the utmost importance to me. At JW Enterprises, I make sure each and every item of data is kept secure.

With everything being digitized these days, data security is a top priority. And recently, as I flipped through the pages of Tax Pro Monthly, I found an interesting and helpful article about ways tax accountants and professionals can protect our clients’ data.

I’ve decided to share with you a few different ways to safeguard sensitive client data. By following the information below, clients can trust tax professionals handling their personal and financial information with the most care possible.

Phishing:

Be aware of phishing scams. “Phishing” is when scammers send fraudulent information via digital communication platforms (i.e. email, text, etc.) in order to obtain sensitive information such as account passwords, credit card numbers, Social Security numbers, and the like. Never open an embedded link from an email, text, or website that you do not recognize.

Limit access:

The only person who should have access to client information is the tax professional handling the account.

Software:

Anti-virus, anti-spyware, firewall, drive encryption: this is all security software that helps keep information on computers protected. While PCs and Macs typically come with security software already installed, there is always the option to purchase further protection.

Be Aware:

Being aware of possible data theft is essential. A tax preparation professional or firm can potentially be a victim of theft if one of the following occur:

● Clients receive tax returns before they file
● Clients’ tax returns are rejected (this could mean their S.S.N has already been used to file)
● Clients receive tax information they did not request.

Should anything out of the ordinary happen while filing, it is essential to contact the IRS immediately.

EFIN/PTINs:

Tax professionals can receive weekly reports regarding the number of tax returns they’ve filed. To check, login to the IRS’s e-Service account and check your EFIN status. If the number of returns filed in the report does not match the real number you’ve filed, contact the IRS e-Help Desk.

While some of this may seem like common knowledge, it is essential to reiterate. Data safeguarding is also important should an individual or small business choose to file on their own using online tax software.

During tax season, a lot of data is being used to create the best return possible. Just remember: Be safe and protective of your valuable information.

—Jake

A Reason to Like Your Loans

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If you’re in the process of repaying student loans, trust that we feel your pain. They’re expensive, they’re tiresome, and they’re another bill in your pile of many.

Oftentimes, student loan debt is a heavy burden to bear. But, did you know that if you make less than $80,000 a year ($165,000 if filing jointly), you may qualify for a deduction on the interest you’ve paid toward student loans?

If you’re in the process of paying back student loans on a degree, certificate, or educational credential which you’ve received during your time taking credits at least part-time, you may qualify for this special tax deduction.

Again, not the entirety of your student loan repayment qualifies for a deduction. Rather, the portion of your payment that covers interest on your loans, if it is above $600, qualifies. This deduction can reduce your taxable income by up to $2,500.

Anyone that has paid more than $600 in interest in 2018 should receive a Form 1098-E (student loan interest tax form) from each of their lenders. If you think you have paid over $600 to interest on your loans and have not received a 1098-E by the end of January, contact your lender.

In order to claim this deduction, you must be legally obligated to pay the loan. If a parent claims you as a dependent and you both are obligated to pay back the loan, the deduction is allowable to whomever actually makes the payments monthly. Consult your parents if you are unsure about whether or not they claim you on their taxes.

If you are unsure whether or not you qualify for this student loan tax deduction overall, the IRS has a helpful tool for you: Click here, take the survey, and see if you qualify.

—Jake

Do You Run Your Own Small Business? Read This!

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The rise of e-commerce has created a rise in the amount of people looking for self-employment—and why not? Running an online store, marketplace, or business is an excellent way to make money, and in most cases, also do something you love.

Do you enjoy painting in your free time? Graphic design? Sewing? Writing? There are a ton of different platforms nowadays that allow you to monetize these things. Etsy, Amazon Stores, Ebay, blogs, or even social media platforms in one way or another are spaces to create, build, and earn some money!

So, you’ve started an online shop and you’re actually earning an income! What now? Well, that’s where I come in. As a financial advisor for small businesses, I am a firm believer in working for yourself while using your passions to build a strong financial future. With tax season in full-swing, I’d like to take time to inform you about your obligation as someone self-employed.

To determine whether or not you need to file self-employment tax (SE tax), you need to figure out net profit or net loss from your business (business income, less your business expenses). If you have self-employment income of $400 or above, you are required to file taxes!

Filing taxes on income earned from self-employment might be something that slips your mind, especially if you receive a W2 from a full-time employer, too. However, turning to a tax accountant for help while filing independently-earned income is very beneficial. As I’ve stated in previous blog posts, free, online tax software is very convenient. Unfortunately, this software is cookie-cutter, impersonal, and does not ask all underlying questions about what goes into the work you do. This is why turning to a tax accountant or tax professional is beneficial when it comes to filing for your small business.

If you run your own small business or online marketplace, I will gladly help go through all options for filing your 2018 taxes. Call 702-515-4025 today for your free consultation.

— Jake

Being in the Know About Tax Changes

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The new year is in full-swing, and I hope everyone had a great time ringing in 2019!

I’m sure many of you already have new year’s resolutions, but I’m giving you another that will be easy to accomplish with my help: Filing your 2018 taxes correctly and getting the biggest return possible! I’m here to make sure you’re aware of important tax changes for 2018!

While I’m sure everyone has their own way of filing taxes, 2018 has brought a lot of changes to things like standard deductions, filing requirements, and more. Free, online tax software might be convenient, but when it comes to constant, ever-changing tax laws and information—no one’s got you covered like a tax accountant.

As a member of many tax accounting associations, organizations, and societies, I stay up to date on how to get you the most money back on your return. If you have questions, concerns, or think you’re not getting the most money back, call 702-515-4025 for a free consultation.

Click here to see filing requirements, here to see standard deductions, and here for 2018 tax rates (brackets).

—Jake

The Future of Your Finances Starts Today

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A solid financial future begins today, so much of my work is teaching others tools of the trade. The trade? Saving.

Your future is built on contributions you make today, and something I can’t emphasize enough is that it’s never too early to plan for later. That’s why I aim to teach millennials the different options when it comes to planning, saving, and being smart with their money.

Of course, it’s unlikely that a company would offer a premium savings plan to temporary, seasonal, or even part-time employees; this is where some young adults assume they’re out of luck. They’re wrong! Tons of options are out there for young, low-income employees (even if they’re working solely to supplement their summertime shenanigans). There’s an array of ways to contribute the money you make as a young adult into a savings account.

Young adults don’t always understand the necessity of a strong financial foundation at their age, and I’m here to tell them a rainy day fund won’t necessarily cut it for retirement. Although a summertime retail job might not be part the of long-term career goal, all income earned is an opportunity for the future. Whether that opportunity comes in the form of a little extra cash from a tax return, an IRA, or an investment—I want to teach millennials all of their options.

As a financial advisor, my job is simple: I help get more money into my clients’ pockets. No matter how old you are or what your current financial situation is, I want to help you gain better control of your finances. Call 702-515-4025 for a free consultation.

—Jake