Tuesday, 12 March 2013

Avoiding ID theft during tax season

Come tax season, there is a heightened threat to financial safety due to identity theft. According to the IRS, identity thieves use a taxpayer's identity to fraudulently file a tax return and claim a refund. Legitimate taxpayers find out that something is wrong only when they go to file their return. Over the last decade, identity theft topped the annual list of consumer complaints received by the Federal Trade Commission.  This number is on the rise because an increasing number of people choose to e-file, but don't take steps necessary to protect their information. 
All of us have at some point or other received emails that talk about a "change in the tax laws" or an "IRS audit". Victims will either be directed to a fake website that will ask for personal and banking information or instructed to download a file (usually a .pdf document) that  will outline the latest changes. The document will contain malware, such as keyloggers, that infects your PC.

Be wary of phone calls from thieves posing as IRS representatives asking to verify information that includes citizenship status, personal data or banking information prior to a tax refund being sent. They may give a reason for verification that states the victim was sent a previous check that no one has cashed.There may also be emails promising refunds that may or may not be legally forthcoming. Once again, the victim will be directed to a fake website that will ask for personal and banking information.

Protecting yourself from tax season ID theft scams are similar to those methods that can protect you all year long. It should include protecting your computer, having the latest anti-spyware and anti-virus software installed and updated.  Files should also be password protected and the wireless connection must be secure.
When you engage the services of a tax preparer, know who you're hiring. There are many fake tax preparation companies that spring up during tax season with intent to steal tax refunds. Check out the credentials of a tax preparation service prior to giving them your personal data.

Forward suspicious IRS emails to phishing@irs.gov. For suspicious phone calls, call 1-800-829-1040 and inquire about the call that you just received.Once you receive a refund, the IRS will not need any additional information from you. Also, normal tax preparation forms ask for all the needed information to process a tax return. You are not required to fill out additional forms or provide additional information in order to release a refund.Use secure paper mail practices when communicating with the IRS. Never send out personal information through a regular public mailbox or from your home mailbox – use your local Post Office.
Remember to file early.The earlier you file your taxes, the less likely you are to be a victim of tax return identity theft. By waiting until the last minute, thieves could have weeks or months to get away with identity theft before you are even aware of it.
Tax season can be stressful enough without the added problems connected with identity theft. Be diligent and aware of potential risks and enjoy your refund when the tax season is over.To learn more, please email info@gkmtax.com.

How the Healthcare Act will shape up in 2013?


The Affordable Care Act is a far-reaching topic, changing the way healthcare is accessed and delivered in the US. While many aspects of the Affordable Care Act do not roll out until 2014, the tax component has gone into effect, and taxpayers need to be prepared for the tax bill that accompanies the act.
Medicare Payroll Tax - Thosewho make more than $200,000 annually or any married couple who makes more than $250,000 annually will pay a 2.35% Medicare payroll tax, up from 1.45%. This tax will largely affect taxpayers in high-income households.
Unearned Income Tax -. A surtax of 3.8% will be imposed on unearned income, such as taxable capital gains, dividends, rents, royalties and interest for single taxpayers who make more than $200,000 and married couples who make more than $250,000.
More Limitations on Flexible Spending Accounts - Flexible spending accounts are used to put money away on a pretax basis for eligible medical expenses. In 2013, there is a $2,500 limit to the amount of money you can put in a flexible spending account. The limit for dependent care remains at $5,000.
Cadillac Health Insurance Plan Tax – Asteep 40% penalty for being enrolled in a health insurance policy that costs $10,200 or more for a single member or $27,500 or more for a family will be imposed in 2018. This tax is causing many health insurance carriers to lower costs and many citizens to find a lower-cost health insurance policy.
On the other hand, some Medicare benefits are being cut, and some illnesses or surgeries previously considered appropriate for an overnight hospital stay are now considered outpatient, resulting in increased billings. If you typically claim unreimbursed medical expenses on your tax return: You may not get to do so now — they must be 10 percent of your income, up from 7.5 percent in the past.
The Affordable Care Act is long reaching and affects everyone regardless of what tax bracket you fall into. This legislation is all set to bring in sweeping changes to the US healthcare system, providing better care for patients and ensuring the long-term viability of the industry by embracing the reforms.