There are few things I can think of that have grown in popularity as quickly as Cyber Monday. Well, there was the rise of internet culture … hmm, maybe there’s a connection there or something. It may be no coincidence then that this week is also National Tax Security Week and Thursday, November 30 is Computer Security Day.
Contrary to how this may sound, I am not coming in this week with tales of doom and gloom as I try to push you away from joining the virtual world or shopping online. After all, it takes zero argument to convince me that taking advantage of Cyber Monday deals makes much more sense, and is much less maddening, than waiting in lines before the sun rises on Black Friday. I’m clearly not alone in this, as this past Monday set a record mark for online shopping.
I do, however, think that there are certain easy, common-sense acts that we can all take to help ensure that we stay safe while enjoying the conveniences this new technological world has brought us. This is an arena where we can talk about one of those things that the IRS does well, and that is stay on top of security issues and pass along good advice when it comes to the subject. They do, after all, handle a rather large amount of critical information.
So if this is something that interests you, visit their tax tips web page this week as they, er, celebrate Tax Security Week.
For those who don’t care that much, or remain too weighed down by Thanksgiving leftovers to put that much effort into extra clicks, I wanted to highlight a few of the tips that are on the simpler side, but that some may not know, and everyone could benefit from a reminder.
So when it comes to online shopping, pay attention to where you are shopping. Use retailers that you trust, or do a quick Google search to research one if using it for the first time. And even when using a retailer that you do trust, give an extra look at your browser. Many sites exist to look like the popular sites you enjoy, but exist solely to gather information from you. An extra peek at the URL bar ensures that the website address is the site that you believe you are on. Also give an extra look to the beginning of the address. Sites that start with an “https” are usually secure. Any sites that do not carry that “s” at the end are ones you want to avoid when it comes to transactions.
And finally, be careful about info into a site if you are using an unprotected Wi-Fi network. If you can access a public hotspot, that means anyone else can also use that hotspot and that makes it much easier for those who want to track what is happening through those connections. Chances are waiting until you get somewhere more secure is going to be easier to deal with than what you will have to do if someone nabs your personal info.
So don’t so fearful as to keep yourself from enjoying what technology brings us, but a little vigilance is always worth the effort.
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A Note of Thanks
First off, I hope that you will forgive me if this week’s blog is a little shorter than usual. I know that no one wants to work this week, but I can only provide so much for you to read while making it look like you are diligently attending to your tasks.
(Or maybe my urge to not work that much is showing.)
During this week when we take time to be mindful of what we are thankful for, though, I wanted to take the opportunity to thank my clients for the trust they show in letting us handle some sensitive pats of their lives. And during this larger time when so much feels in flux, especially when it comes to the tax world, I am even more reminded of how thankful I am for that.
I mean, this is a time when so many are wondering, both optimistically and pessimistically, about what their future financial picture will look like. And like everyone else in the world, I am not able to give anyone concrete answers. We can make some good guesses, but even those vary widely.
So to continue to maintain that high level of trust in times of uncertainty is heartening.
We will eventually have answers, and when we do, we will continue to do what we do together, and in many cases have been doing together for a number of years.
When one is lucky enough to have such relationships, it is impossible to not be thankful. And I also thank you for the opportunity to have given me the chance to express that here.
And if you still need to kill more time – Thanksgiving humor from Reader’s Digest.
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Last week, I wrote about how one may want to think about how much you have already paid in taxes this year while there was still some time to make things matter before filing season. This week, I wanted to mention a couple deductions that one could still take advantage of, and they even come with positive benefits before it comes time to fill out those tax forms.
So as always, be aware of the benefit of making a charitable donation.
I wrote much in recent months about how natural disasters laid waste to multiple areas. The visions of the destruction may now have faded from the minds of many, but the struggle for those most severely affected continues. We are also entering the time of year when giving becomes a bigger theme, opening up more avenues for us to share with others. One can complain about the fact that you are already hearing Christmas music in the grocery store, but this time of year does come with positives, as well, such as the beauty of a giving spirit.
Beyond the tax benefit, there is the good feeling that we all get by helping. Studies show that even those who can barely afford to give feel better about donating their money than spending it in other ways. There is power in knowing that we have the ability to make a positive difference in the lives of others.
Also for those of more limited means is the retirement savings contributions credit for low- to mid-income workers. This can come with up to a 50 percent credit for the first $2,000 one contributes to a retirement plan, such as a traditional or Roth IRA, 401(k), 403 (b), or similar workplace retirement programs.
In fact, with an IRA, one even gets until the filing date (April 17, 2018) to make contributions to the plan and still have it count.
Overall, this isn’t a deduction that is simple, as it varies depending on the taxpayer, and can’t be claimed by everyone. The basic rule, however, states that it can be claimed in 2017 by married couples filing jointly with incomes up to $62,000; heads of households with incomes up to $46,500; and single or married individuals filing separately with incomes up to $31,000. In addition, one needs to be 18 or older, not a full-time student, and not claimed as a dependent on another person’s return.
So sure, it’s not an easy checkbox, and one must even fill out another form (8880) to properly qualify for the credit. But if you can lower your tax bill, and improve your future financial picture, this can’t possibly be a bad thing, right?
And the IRS reported that in tax year 2015, saver’s credits totaled nearly $1.4 billion for that season. When enough people make those seemingly smaller moves, it starts to add up. Just like if you start to make the moves that you can now before it comes time to file your taxes, it will start to add up and really make a difference.
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As the Year Winds Down ...
There are moments when I still cannot quite believe it is already November. We are rapidly moving toward the holiday season, and soon thereafter we can start to celebrate the tax season.
Granted, no one else really celebrates that, and I don’t fault anyone who completely hides from it. Heck, even those who expect a refund enjoy the endpoint, but are not huge fans of the paperwork and reporting before that money hits the bank. And clearly, those who will have to pay to satisfy their tax obligation look toward it even less.
The fact that no one looks forward to it means that many do not think about taxes until they have to. Unfortunately, this avoidance of the subject could mean that the eventual tax hit is worse than it needs to be. A little more mindfulness, and a little more planning, helps one keep a tax bill as low as possible. At this point, though, there are less than two months left in the year, meaning one’s options are getting more limited, but it’s not too late to still make a difference.
So to start, if you are worried about how things may look come next year, please don’t hesitate to contact us and make an appointment for planning purposes. We can look at some numbers, make some estimates, and do what we can to prepare you for filing season.
For those who aren’t worried, though, and just want to start putting the picture together, the IRS has some tools you can use to do that. A good place to start for all is Form 1040-ES, which you can use to figure out what you should be making in estimated tax payments, and then carry through and pay some, as well. This could be an especially important piece for self-employed individuals, who not only have to pay their income tax, but the self-employment tax.
For those who receive a regular paycheck, though, you may want to visit the IRS’s withholding calculator There you can find out if you’re withholding enough from your paychecks to have your tax bill taken care of. And if it’s not (or if you find out you’re getting much more taken out of your check than you need), you can fill out a new Form W-4, submit it to the appropriate payroll people at your job and have the proper adjustments made.
Such actions may be (or I suppose, should be) more prevalent than in past years, for as more people start to participate in the sharing economy, there will be more people receiving income that is not being taxed. It could serve you well to start addressing that before actually filling out a tax return.
Overall, if you were happy with how things turned out when you filed taxes last year and nothing significant has happened to change your personal or financial pictures, you can let these things go and all should remain pretty similar when the calendar turns and it is time to file again. I know there are some of you, however, who were not happy, absorbed the blow, and then forgot about it. So why not make things a little easier on yourself this time while you still can?
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