September 16
- Filing deadline for 2023 calendar-year S corporation and partnership tax returns on extension
- Due date for 3rd quarter installment of 2024 estimated income tax for individuals, calendar-year corporations, and calendar-year trusts & estates
Scammers are always scheming up new ways to steal your money. At the same time, the altruistic IRS is trying to protect you by staying one step ahead of the fraudsters. In this month’s newsletter, read about the latest scams flagged by the IRS that you should be on the lookout for this summer.
Also in this edition, find out how to avoid the back-to-school shopping trap, discover tips to increase the worth of your most valuable asset and find 5 little known IRA opportunities.
Beware of Scammers Targeting Your Tax Info, Warns IRS
Social media is an easy way for scammers and others to try encouraging people to pursue some really bad ideas, and that includes ways to magically increase your tax refund.
– IRS Commissioner Danny Werfel
Tax scammers continue to become more sophisticated, which means it’s more important than ever to pay attention to any person or message asking you to provide confidential information. Here are several of the more prevalent scams to be on the lookout for, according to the IRS.
- Phishing and smishing. Taxpayers continue to be bombarded with email and text scams from fraudsters attempting to lure you into providing valuable personal and financial information that can lead to identify theft. Phishing involves fraudsters sending emails claiming to come from the IRS, while smishing uses text messaging and alarming language such as Your account has now been put on hold!
- What you can do: Never respond to phishing and smishing messages, and never click on a link! Report all unsolicited emails, including the full email headers, claiming to be from the IRS to phishing@irs.gov.
- Online help to create an IRS account. A scammer may offer to help you set up an online account on www.irs.gov. While the IRS’s online account tool can provide convenient access to your tax information, it’s also a valuable source of information for identity thieves who use information from your account to submit fraudulent tax returns using your name in order to get a big refund.
- What you can do: Schedule an appointment with someone you trust if you need help creating an online IRS account.
- Fake charities asking for donations. Scammers masquerading as charitable organizations try to lure you into making a contribution after natural disasters and other publicized tragedies. Scammers also use fake charities to swipe personal and financial information from you, in addition to targeting certain groups such as senior citizens.
- What you can do: Visit www.irs.gov, then search for Tax-Exempt Organization Search Tool. Use this tool to confirm that a charity to whom you want to donate is a legitimate organization registered with the IRS.
- Fake tax advice and AI tools. Social media routinely circulates inaccurate and misleading tax information. These articles and videos share wildly inaccurate tax advice, including some that involve urging people to misuse common tax documents such as Form W-2 or Form1099. They will make is especially convincing by using AI as a buzz word.
- What you can do: Don’t turn to the internet for tax advice. Remember, AI-generated ideas can also pull in inaccurate information as well!
It’s easy to fall victim to tax scams. So stay vigilant and if you see a scam, let everyone know. It’s with increased awareness that we can decrease the number of scam victims.
Ideas to Lower Back-to-School Shopping Costs
With inflation hiking the prices of everything over the past 4 years, and schools asking families to fork over larger and larger sums of money every year to help with shared supplies, the cost of your back-to-school shopping trip can quickly spiral out of control.
Consider these ideas to lower your back-to-school shopping costs.
- Wait until fall to refresh school wardrobes. Most kids and teens go back to school during the heat of summer, thus any clothing you buy for back-to-school may not work for those winter months. With that in mind, it can help to wait until closer to fall to invest in a school wardrobe that will last. This way, you can spend your clothing budget on sweaters, pants, and cold-weather clothing that kids can wear through the following spring.
- Stick to your school’s shopping list for each grade. Wait until you have your school’s list for each grade in hand before starting your back-to-school shopping. It’s far too easy to overspend when you don’t have the list.
- Price shop online. With the school shopping list in hand, you can compare prices for back-to-school essentials online with prices advertised by local stores. If you can order some supplies cheaper online and buy the rest with local retailers, you’ll save money in the end.
- Wait until school starts to buy any extras. Many school shopping lists have a mix of essential items as well as required items your kid doesn’t really need. If you’re on the fence about whether your child will need or even use certain items, consider waiting until school starts to find out.
- Consider buying refurbished electronics. If your school shopping list asks you to buy pricey calculators or tablets, looking for used items on auction websites or second-hand sites can help you save big.
- Crowdsource items you need. Ask people you know or who live near you if they have access to items you need in the short-term. You may find that your neighbors still have calculators or musical instruments from when their kids attended school, or that a teacher friend of yours has some extra supplies they can’t use.
- Consider crowd buying. If you have some extra money and have access to a warehouse shopping center, consider coordinating with other families to bulk buy common items and lower the cost for everyone!
Back-to-school shopping can be expensive. Use these tips to cost-effectively get your kids ready for the new school year.
Increasing the Worth of Your Most Valuable Asset
If someone asks what your most valuable asset is, your answer might be your house, vehicle, or investment portfolio. But there’s another answer to this question that’s worth considering – yourself.
As you seek out opportunities to increase the value you bring to the table both in your personal and professional life, here are some ideas.
- Meet one new person each week. Research shows that up to 85% of workers land a new job through networking. In other words, who you know may be more important than what you know. Consider expanding your network and potential job prospects by meeting someone new in your industry, or a related industry, each week.
- Learn a complimentary skill. This will help you create meaningful points of difference that you bring to the table every day. For instance, if you’re an engineer, learn how to be a better writer. If you’re a marketing executive, consider taking finance and accounting courses. Or consider becoming an expert in an area of interest to help you land a complimentary job or meet people with similar interests.
- Increase awareness about yourself. You may be the best in the world at what you do, but if companies don’t know you exist, you’ll never get better opportunities! Joining an online forum related to your industry and finding opportunities to volunteer and help other people is one way to increase awareness about yourself to prospective employers.
- Aim for a personal best in your favorite activity. Get in shape (and stay in shape!) by picking your favorite activity and aiming to achieve a personal best. If you’re a runner or a walker, for example, pick a time that would be a personal best for completing a set distance, then work toward achieving that goal. Taking care of your physical and mental health will help you accomplish more in every other area of your life.
- Improve your interpersonal communication. Think about the most important relationships in your life – whether it’s with your parents, spouse, children, best friends, or someone else – and find three ways you can improve your communication skills with those people. With the time, money, and education that many spend to improve their professional skills, consider a small investment to improve your interpersonal skills.
5 Little-Known IRA Opportunities You Should Know About
IRAs can be a powerful tool to lower your taxes while helping you save for retirement. Here are 5 little-known opportunities about IRAs that can help you and other family members save even more when contributing your IRAs.
- A nonworking spouse can have an IRA. If your spouse doesn’t work, you may still be able to open and contribute to an IRA for your spouse, assuming that you work and file a joint tax return. This can be a great way to help reduce your taxable income each year.
- Even children can have IRAs. If your child has earned income, you can open and contribute to an IRA. Just make sure you can document the earnings. While your child can contribute their own earnings, many parents will help keep track of things like babysitting money, then match those earnings in either a traditional or Roth IRA. Often the Roth IRA is preferred, because the future earnings could be tax free! Your child’s IRA is managed by an adult until the child is old enough for the account to be transferred into their name.
- You may still contribute to an IRA if you have a 401(k) or similar program at work. As long as you do not exceed the income limits, you can have both an IRA as well as other types of retirement savings plans.
- Non-deductible contributions may be made. If you exceed certain income levels, contributions to your IRA won’t be able to reduce your taxable income for the year. But you may still want to make after-tax contributions to a non-deductible IRA, as the earnings can still grow tax-deferred.
- It’s not just for retirement. With traditional IRAs, if you withdraw funds before the age of 59 1/2 you may be subject to income tax AND an early withdrawal penalty. But there are exceptions to this rule, including withdrawals for a first time home purchase, major medical bills, college costs, birth and adoption expenses, and others. However, it is important to know the rules BEFORE you withdraw the funds.
Tax rules surrounding IRAs are vast and complex. But within the rules are numerous situations that if you know they exist, can help you plan for a more tax-efficient future.