Monday, November 4, 2019

How to Protect Your Social Security Number


Very few things in life can create a higher degree of stress than having your Social Security Number (SSN) stolen. This is because, unlike other forms of ID, your SSN is virtually permanent. While most instances of SSN theft are outside your control, there are some things that you can do to minimize the risk of this ever happening to you.

  • Never carry your card. Place your SSN card in a safe place. That place is never your wallet or purse. Only take the card with you when you need it.
  • Know who needs it. As identity theft continues to evolve, there are fewer who really need to know your SSN. Here is that list:
    • The government. The federal and state governments use this number to keep track of your earnings for retirement benefits and to ensure you pay proper taxes.
    • Your employer. The SSN is used to keep track of your wages and withholdings. It also is used to prove citizenship and to contribute to your Social Security and Medicare accounts.
    • Certain financial institutions. Your SSN is used by various financial institutions to prove citizenship, open bank accounts, provide loans, establish other forms of credit, report your credit history or confirm your identity. In no case should you be required to confirm more than the last four digits of your number.
  • Challenge all other requests. Many other vendors may ask for your SSN but having it may not be essential. The most common requests come from health care providers and insurance companies, but requests can also come from subscription services when setting up a new account. When asked on a form for your number, leave it blank. If your supplier really needs it, they will ask you for it. This allows you to challenge their request.
  • Destroy and distort documents. Shred any documents that have your number listed. When providing copies of your tax return to anyone, distort or cover your SSN. Remember, your number is printed on the top of each page of Form 1040. If the government requests your SSN on a check payment, consider placing only the last four digits on the check, and replace the first five digits with Xs.
  • Keep your scammer alert on high. Never give out any part of the number over the phone or via email. Do not even confirm your SSN to someone who happens to read it back to you on the phone. If this happens to you, file a police report and report the theft to the IRS and Federal Trade Commission.
  • Proactively check for use. Periodically check your credit reports for potential use of your SSN. If suspicious activity is found, have the credit agencies place a fraud alert on your account. Remember, everyone is entitled to a free credit report once a year. You can obtain yours on the Annual Credit Report website.
Replacing a stolen SSN is not only hard to do, it can create many problems. Your best defense is to stop the theft before it happens.

If you have questions, call us at (219) 769-3616 or email them to tlynch@swartz-retson.com.

Monday, October 14, 2019

Indiana Department of Revenue's INTIME & INTax Systems


Indiana’s Department of Revenue has embarked on the creation of an online e-services portal – Indiana Taxpayer Information Management Engine, or INTIME.  The portal enables Hoosiers to file, pay, view and manage their state taxes in one convenient location 24/7.  Services available in the portal are:

·       View past payments and returns
·       Electronically file returns and make payments currently submitted by paper
·       Amend returns electronically
·       Submit an Electronic Power of Attorney (ePOA)
·       View Correspondence, Send Messages, Update Names and Addresses

The first segment was rolled out in September 2019 and allows access to INTIME for the following:
·       Corporations (C, S and Partnerships)
·       Utility Receipts
·       Financial Institutions
·       Not For Profit Organizations

The other rollouts are anticipated to be as follows:
September 2020:
·       Food and Beverage Taxes
·       Sales Taxes
·       Out of State Use Taxes
·       Withholding Taxes
·       Other taxes
September 2021:
·       Individuals
·       Various Wagering and Gaming Taxes
July 2022:
·       Alcohol Taxes
·       Various Cigarette and Tobacco Taxes
·       Various Fuel Taxes
As each of the segments above are rolled out, taxpayers needing those segments are to use INTIME.  For more information, go to https://projectnextdor.dor.in.gov/


Indiana’s Department of Revenue also has the existing system:  Indiana Tax or INtax.  This site provides services for those areas for which INTIME has not yet been rolled out and allows for management of various sales taxes, withholdings, fuel taxes, gaming taxes and other taxes.  The site allows for:
·       Payment of taxes
·       View payment history
·       Register and manage EFT accounts
·       Send secure messages to the Department of Revenue
Visit this website at https://intax.in.gov/  to view a tutorial and learn all that the site offers.

If you have questions, call us at (219) 769-3616 or email them to tlynch@swartz-retson.com.

Friday, September 27, 2019

Five Surprising Taxable Items


Wages and self-employment earnings are taxable, but what about the random cash or financial benefits you receive through other means? If something of value changes hands, you can bet the IRS considers a way to tax it. Here are five taxable items that might surprise you:

  • Scholarships and financial aid. Applying for scholarships and financial aid are top priorities for parents of college-bound children. But be careful - if any part of the award your child receives goes toward anything except tuition, it might be taxable. This could include room, board, books, travel expenses or aid received in exchange for work (e.g., tutoring or research). Tip: When receiving an award, review the details to determine if any part of it is taxable. Don't forget to review state rules as well. While most scholarships and aid are tax-free, no one needs a tax surprise.
  • Gambling winnings. Hooray! You hit the trifecta for the Kentucky Derby. But guess what? Technically, all gambling winnings are taxable, including casino games, lottery tickets and sports betting. Thankfully, the IRS allows you to deduct your gambling losses (to the extent of winnings) as an itemized deduction, so keep good records. Tip: Know when the gambling establishment is required to report your winnings. It varies by type of betting. For instance, the filing threshold for winnings from fantasy sports betting and horse racing is $600, while slot machines and bingo are typically $1,200. But beware, the gambling facility and state requirements may lower the limit.
  • Unemployment compensation. Unfortunately the IRS doesn't give you a break on the taxes for unemployment income. Unemployment benefits you receive are taxable. Tip: If you are collecting unemployment, you can either have taxes withheld and receive the net amount or make estimated payments to cover the tax liability.
  • Crowdfunding. A popular method to raise money for new ventures or to support a special cause is crowdfunding through websites. Whether or not the funds are taxable depends on two things: your intent for the funds and what the giver receives in return. Generally, funds used for a business purpose are taxable and funds raised to cover a life event (e.g., special causes or medical assistance) are considered a gift and not taxable to the recipient. Tip: Prior to using these online tools to raise money, review the terms and conditions and ask for a tax review of what you are doing. If you need to account for taxes, reserve some of what you raise for this purpose.
  • Cryptocurrency. Cryptocurrencies like Bitcoin are considered property by the IRS. So if you use cryptocurrency, you must keep track of the original cost of the coin and its value when you use it. This information is needed so the tax on your gain or loss can be properly calculated. Remember, the tax rate on property can vary if you own the cryptocurrency more than a year, so record all dates. Tip: For those considering replacing cash with things like Bitcoin, you need to understand the gain or loss complications. For this reason, many people using cryptocurrency do so for speculative investment purposes.
When in doubt, it's a good idea to keep accurate records so your tax liability can be correctly calculated and you don't get stuck paying more than what's required. Please call if you have any questions regarding your unique situation.

If you have questions, call us at (219) 769-3616 or email them to tlynch@swartz-retson.com.

Friday, September 13, 2019

Ideas to Improve Your Financial Health


No one likes to be blindsided by financial hardship. Listed here are 10 ideas to help ensure your financial situation stays healthy.
  • Create a safety net. Plan to have a minimum savings balance to cover at least three months' of expenses (ideally, this should be six to 12 months). If your reserves are light, start saving now. Even if it is a little amount, it can get you on the right track.
  • Develop a budget. At least once a year develop a basic budget. Set goals and try to hit them. If this seems overwhelming, start simple. What is coming in and what goes out each month? Becoming aware is the first step to improving your financial health.
  • Make your spouse a financial partner. If you die, does your significant other know where everything is? Can he/she pay the bills? Does he know where account numbers are? Does your spouse know who you use to help with things? If not, it is time to start talking.
  • Review your beneficiaries. Once a year review beneficiaries on all accounts. This includes retirement accounts as well as names on wills and estate plans. The legal hassle created without this review can be devastating to your surviving family. This is especially important if you had a recent life event (marriage, divorce, birth or death).
  • Maximize your benefits. Make sure you review your retirement plans to maximize any employer match in your account. Also review your plan's administrative expenses. If they are too high they can cost you thousands of dollars over your lifetime.
  • Create a disaster plan. If your home burned down or was flooded, are your important records easily accessible and protected? If not, consider creating a disaster plan. This may include placing important documents in a safe deposit box in another location than your home.
  • Review your credit report. With the recent increase in identity fraud, plan to check your credit with the major credit agencies once a year. The agencies are legally required to make their report available to you annually without charge.
  • Review your insurance plans. Periodically look at your health, life, home and liability insurance. With the legal nature of our society, you might consider the need for an umbrella policy to cover against potential litigation. But also consider flood insurance and a replacement value homeowner's policy.
  • Manage your debt. Review your use of credit cards, loans, etc. Understand your net worth (assets minus liabilities). Make progress in reducing your debt load starting with the highest interest obligations first. Is your debt lower than it was last year?
  • Plan for fun. Just because you are taking steps to improve your financial situation doesn't mean that you can't have fun. Be smart about your entertainment spending. If you are planning a vacation, research money-conscience options and have a budget that fits in with your other financial goals.
This list is by no means complete, but if you focus on the areas mentioned, your financial life will become more planned and less likely to be struck by an unforeseen surprise.
If you have questions, call us at (219) 769-3616 or email them to gward@swartz-retson.com.

IRS Email Scam


IRS Warns of New Impersonation Scam

The Internal Revenue Service (IRS) and its Security Summit have recently issued warnings about a new email impersonation scam that is spreading rapidly across the country.  Taxpayers began notifying the IRS earlier this week about unsolicited emails from imposters, including emails claiming to be sending tax filing reminders. 

The scam emails will contain links to websites that are similar in appearance to the IRS.gov website and that require the taxpayers to login to an account, using a password created by the scammers.  The account claims to have details about the taxpayer’s refund, tax return, and tax account history.  However, the account is actually a link that will infect the user’s computer with malware.  The imposters will use the malware to attempt to gain control of the taxpayer’s computer or secretly download software to track keystrokes.  This tracking can provide the scammer with sensitive information, such as passwords to websites that the taxpayer frequents. 

It is important to remember that the IRS will never contact taxpayers via email, especially regarding tax sensitive information such as refund statuses.  Likewise, the IRS will never initiate contact through text messages or social media channels.  If taxpayers receive a message from the IRS via any of these channels, they should forward the message immediately to the IRS at phishing@irs.gov.  Also, if taxpayers feel they are the recipient of a potential scam, they can call the IRS during business hours to confirm the information they received.    

These scams are similar to others in which imposters will contact taxpayers over the phone and demand immediate payment of taxes using methods such as prepaid debit cards, gift cards, or wire transfers.  Never submit payment via these methods – the IRS will first send taxpayers a bill through the mail before using other methods to collect tax due.    

If you have questions, call us at (219) 769-3616 or email them to tlynch@swartz-retson.com.

Saturday, August 24, 2019

Time to Lower Your Tax Bill


It's easy to push tax planning to the sidelines when tax laws are ever-changing and hard to understand. Here are some common (but often unfounded) reasons for avoiding tax situations, plus tips to help get past them and start paying less tax this year:
  • It doesn't make a difference. This point of view is especially problematic in years with unique situations.  Even in uneventful years, external forces like new tax laws can be managed if planned for in advance.
    • Selling a house? You can avoid taxes if primary residence requirements are met.
    • Starting a business? Choosing the correct entity can save you a bunch of taxes.
    • Getting ready to retire? Properly balancing the different revenue streams (part-time wages, Social Security benefits, IRA distributions and more) has a huge impact on your tax liability.
  • It's out of your control. Timing is important when it comes to minimizing taxes, and the timing is often in your control. Bundling multiple years of donations into one to get a deduction, holding investments over one year to get a lower tax rate, and making efficient retirement withdrawals are just some examples of prudent tax strategies that you control.
  • There's not enough money. There are tax strategies to be implemented at all income levels, not just those at the top of the tax bracket. Tax deductions are available for student loan interest, IRA contributions and others even if you claim the standard deduction. Certain tax credits (called refundable credits) will increase your refund even if you don't owe taxes. Missing any of these tax breaks can unnecessarily increase your taxes.
  • I only need help at tax time. When the standard deduction doubled in 2018, many people assumed they could kick their feet up and wait for a big refund. That assumption proved to be false for a large number of taxpayers when their refunds came in lower than expected or turned into a tax bill. Don't let this happen to you! Every year has its own set of changes and challenges that you should plan for well before tax time rolls around.
  • It's too overwhelming. Tax planning is often as simple as looking for ways to reduce taxable income, delay a tax bill, increase tax deductions, and take advantage of all available tax credits. The best place to start is to bolster your level of tax knowledge by picking up the phone and asking for assistance.
Thankfully, it's not too late to get on track for 2019. If you haven't scheduled a tax-planning meeting, now is a great time to do so.

If you have questions, call us at (219) 769-3616 or email them to tlynch@swartz-retson.com.

Insurance Tips to Protect Your Assets and Your Bank Account


Have you conducted a business insurance review lately? Changes in your business equipment, real estate holdings, the amount of inventory, and the number of employees are all good reasons to review your insurance. Here are a few policy review tips to consider:
  • Keep in regular contact with your insurance company. Keep your insurance agent apprised of what you are doing in your business. Try to meet with your agent throughout the year, and conduct a detailed annual review of your insurance needs.
  • Understand how business changes affect your policy. Figure out how your policy covers common changes, as well as other changes you know are happening soon. This involves understanding the limits and terms of your policy. You can start by asking if you're properly insured for property damage, liability coverage, health and disability, and life insurance.
  • Conduct a competitive review. Periodically conduct a competitive review of your insurance needs. Bring in at least two other insurance providers, as well as your current provider. The frequency of the review will be driven by changes in your business, the stability of your current insurance provider, and the need to understand the evolving landscape of business liabilities. A review will keep your premiums competitive, as well as help you learn about coverage holes in your current policy.
  • Identify evolving coverage risks. As the business climate evolves, so should your insurance coverage. Think about what's on the horizon. Who would have anticipated the need to cover cyber attacks and identity theft 10 years ago?
  • Review safety plans and company policies. This goes hand-in-hand with a business insurance review. Make sure your team is adhering to established employment and operations policies. Getting an insurance claim approved and maintaining reasonable premiums often depend on specific factors you can reinforce through these policies.
Finding the right level of coverage for the right price is possible, but it takes some preparation and planning. Invest some time now to review your insurance policies to save a lot of potential pain and money down the road.

If you have questions, call us at (219) 769-3616 or email them to gward@swartz-retson.com.