Given that tomorrow is Tax Day, we figured you might want to know where all of those tax dollars really go. Almost 70% of all funds go to three programs:
Did you also know that the government spent about 25% more money than it collected in 2013?
Here is a great infographic from the Wall Street Journal:
You may have a problem. Microsoft ended support of Windows XP on Tuesday, leaving the many still clinging to the outdated software exposed to cyber attacks.
If you need help upgrading, please do not hesitate to call JMF Technologies.
Yesterday the Treasury Inspector General for Tax Administration issued a press release (below) concerning what they are calling the “Largest Ever” phone fraud scam targeting taxpayers. BEWARE of phone calls from individuals claiming to represent the Internal Revenue Service (IRS) in an effort to defraud you. These calls have hit taxpayers in nearly every state in the country.
IMPORTANT: The IRS usually first contacts people by mail about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The IRS won’t ask for a credit card number over the phone.
If someone calls, and especially if they are threatening, DO NOT PAY IMMIEDIATELY! Follow the steps in the press release or call us and we can assist you with contacting the IRS at known numbers.
Please also see my earlier post about phishing e-mails for additional resources.
Treasury Inspector General for Tax Administration
TIGTA-2014-03 Contact: David Barnes
Thursday, March 20, 2014 David.Barnes@tigta.treas.gov
TIGTA Warns of “Largest Ever” Phone Fraud Scam Targeting Taxpayers
WASHINGTON — The Treasury Inspector General for Taxpayer Administration (TIGTA) today issued a warning to taxpayers to beware of phone calls from individuals claiming to represent the Internal Revenue Service (IRS) in an effort to defraud them.
“This is the largest scam of its kind that we have ever seen,” said J. Russell George, the Treasury Inspector General for Tax Administration. George noted that TIGTA has received reports of over 20,000 contacts and has become aware of thousands of victims who have collectively paid over $1 million as a result of the scam, in which individuals make unsolicited calls to taxpayers fraudulently claiming to be IRS officials.
“The increasing number of people receiving these unsolicited calls from individuals who fraudulently claim to represent the IRS is alarming,” he said. “At all times, and particularly during the tax filing season, we want to make sure that innocent taxpayers are alert to this scam so they are not harmed by these criminals,” George said, adding, “Do not become a victim.”
Inspector General George urged taxpayers to heed warnings about the sophisticated phone scam targeting taxpayers, noting that the scam has hit taxpayers in nearly every State in the country. Callers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer. The scammers threaten those who refuse to pay with arrest, deportation or loss of a business or driver’s license.
The truth is the IRS usually first contacts people by mail – not by phone – about unpaid taxes. And the IRS won’t ask for payment using a pre-paid debit card or wire transfer. The IRS also won’t ask for a credit card number over the phone.
“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” he said.
The callers who commit this fraud often:
If you get a call from someone claiming to be with the IRS asking for a payment, here’s what to do:
TIGTA and the IRS encourage taxpayers to be alert for phone and e-mail scams that use the IRS name. The IRS will never request personal or financial information by e-mail, texting or any social media. You should forward scam e-mails to email@example.com. Don’t open any attachments or click on any links in those e-mails.
Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes winner) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.
Read more about tax scams on the genuine IRS website at www.irs.gov.
While we are a CPA firm and we complete and we welcome many individual tax returns, for some people it doesn’t make sense to pay a CPA to complete their tax return. If you have complex tax issues, it may well be in your best interest to consult a CPA because we specialize in tax planning and tax preparation all year long. As a veteran, I want my brothers and sisters in arms to know there is tax help available for you even if you can’t afford a CPA.
Free Tax Help for Military Families
The IRS provides free tax help to military members and their families through its Volunteer Income Tax Assistance program. VITA offers free tax preparation and e-filing at sites both on and off base. It also has sites to help our military overseas. Here are five things to know about free tax help for the military:
1. Armed Forces Tax Council. The Armed Forces Tax Council oversees the military tax programs offered worldwide. AFTC partners with the IRS to conduct outreach to military personnel and their families. This includes the Army, Air Force, Navy, Marine Corps and Coast Guard.
2. Volunteer tax sites. IRS-trained volunteers staff the military VITA sites. They receive training on military tax issues, such as combat zone tax benefits, extensions of time to file and pay and special rules for the Earned Income Tax Credit.
3. What to bring. To get free tax help, bring the following records to your military VITA site:
• Valid photo identification.
• Social Security cards for you, your spouse and dependents. If you don’t have a card you should get a letter from the Social Security Administration to verify your information.
• Birth dates for you, your spouse and dependents.
• Your wage and earning forms, such as Forms W-2, W-2G, and 1099-R.
• Interest and dividend statements (Forms 1099).
• A copy of your last year’s federal and state tax returns, if available.
• Routing and account numbers for direct deposit of your tax refund.
• Total amount you paid for day care and the day care provider’s identifying number. This is usually an Employer Identification Number or Social Security number.
• Other relevant information about your income and expenses.
4. Joint returns. If you are married and file a joint return, generally both you and your spouse need to sign the return. If you both can’t be present to sign, you should bring a valid power of attorney form. Use Form 2848, Power of Attorney and Declaration of Representative.
There is a special exception to this rule if your spouse is in a combat zone. The exception allows a spouse to file a joint return with a signed statement explaining that the other spouse is in a combat zone and unable to sign.
5. IRS Free File. Do your own taxes with IRS Free File. You can use free, brand-name software or online fillable forms. If your income was $58,000 or less, you qualify for Free File software. If you made more than $58,000, you can use Free File Fillable Forms. Learn more at IRS.gov/freefile.
See IRS Publication 3, Armed Forces’ Tax Guide, for more on this topic. You can get the booklet on IRS.gov or order it by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:
1) Set up a file (or box) for your 2013 taxes. Put a label on it and drop in your Form W-2 and 1099s as they come in the mail.
2) Open the envelope with your JMF organizer. Please use the organizer as a guide to make sure you have everything that you had last year. The JMF organizer is much shorter this year and it is easy to use. Using the organizer will help us help you save taxes. Please put the organizer in your tax file to give to JMF.
3) If you think you will be getting a refund and you would like your refund direct deposited be sure to note in your organizer if the bank account is the same as last year. If your bank account has changed or we do not have it on file include a void check or check photocopy for the account you would like the refund deposited.
4) Please write down your driver’s license number and the number for your spouse if you are married. The State of Alabama wants us to include your driver’s license numbers in the electronic file to help prevent identity theft.
5) Locate those charitable donation receipts for amounts of $250 or more and put them in that tax file.
6) Take a look in your checkbook to see if you paid the estimates we set up for you last year & make a note of how much & when you paid them.
7) Put March 28, 2014 on your calendar. Please mail or bring your tax documents to your JMF accountant before that date or let us know if you prefer to get an extension.
8) Now is a good time to also start a file for 2014 taxes (you can put those charitable donation receipts in there all year long).
“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Judge Learned Hand – 1934
It has come to our attention at JamisonMoneyFarmer PC that there is an e-mail scam currently circulating targeting international taxpayers. This scam is in the form of an e-mail purportedly from the Department of Treasury Internal Revenue Service. It suggests that you should complete a W-8 BEN form and fax it to a link in the e-mail to register with the IRS to have tax exempt interest on your savings. The e-mail contains warnings and is written in bold text to try to make it look very important.
Please note that the IRS will NEVER initiate contact with you by e-mail. This is a scam and you should not click on any links within the e-mail. The below chart is from the IRS website at www.irs.gov.
Please contact one of our experts at JamisonMoneyFarmer PC if we can be of assistance to you in your tax planning and filing process.
|You receive an email claiming to be from the IRS that contains a request for personal information …||
Note: Please forward the full original email to us at firstname.lastname@example.org. Do not forward scanned images of printed emails as that strips the email of valuable information only available in the electronic copy.
|You discover a website on the Internet that claims to be the IRS but you suspect it is bogus …||… send the URL of the suspicious site to email@example.com. Please add in the subject line of the email, ‘Suspicious website’.|
|You receive a phone call or paper letter via mail from an individual claiming to be the IRS but you suspect they are not an IRS employee …||
Letter or notice via paper mail:
If caller or party that sent the paper letter is not legitimate, contact the Treasury Inspector General for Tax Administration at 1.800.366.4484.
|You receive an unsolicited e-mail or fax, involving a stock or share purchase …||
… and you are a U.S. citizen located in the United States or its territories or a U.S. citizen living abroad.
… and you are not a U.S. citizen and reside outside the United States.
|You receive an unsolicited fax (such as Form W8-BEN) claiming to be from the IRS, requesting personal information …||Contact the IRS to determine if the fax is from the IRS.
|You receive a text message or Short Message Service (SMS) message claiming to be from the IRS …||
You have a tax-related question …
Note: Do not submit tax-related questions to firstname.lastname@example.org.
|If you have a tax-related question, unrelated to phishing or identity theft, please contact the IRS.|
In a recent article in the Globe and Mail by Jennifer Warawa, nine reasons to work with an accountant were discussed. While this may seem self serving coming from an accountant, I see so many start up problems that could have been prevented with a short visit that I find this worth sharing. Here is the excerpt of those reasons:
“1. Focus on why you started your business. Entrepreneurs are passionate, and the more than half of small Canadian business owners surveyed went from business idea to opening in less than six months. With such rapid growth, business owners can’t afford to get bogged down with tasks that don’t help you continue to grow. Accountants can take on the heavy lifting of many different aspects of your business.
2. Find work-life balance. Regardless of how new or established a business is, owners across the board struggle with finding the right balance between work and having a life. In fact, maintaining a balance was the top challenge for startups. Accountants can take on the tasks you are less than thrilled about handling, and free you up to sell, market and grow during the day, and maybe even take your son to soccer practice at night.
3. A professional reputation. A good accountant will represent you and your company in the best possible way. This is particularly important as new businesses strive to build strong relationships with key players in their success, such as the bank.
4. It’s vital to a company’s success. As reported by the Sage survey, more established business owners report working with an accountant, agreeing that working with an accountant is a critical element in success.
5. A new perspective. Oftentimes entrepreneurs are so involved running the day-to-day operations of their business that they may not be able to see the whole picture. Someone who is removed from the business can provide a different perspective that may otherwise be missed. Meeting with an accountant can be like taking a step back, looking at the bigger picture and gaining a fresh, new perspective. Sometimes that’s all it takes to come up with the next big idea.
6. They have reach. Don’t underestimate how valuable it is to receive guidance from someone who has insight and knowledge across hundreds of businesses and industries. Accountants not only get to see the financial information of many businesses across a variety of industries, but they also have visibility into best practices that are working for other businesses as well as the mistakes others have made that have led to failure. Being able to have this insight and share information on what has or hasn’t worked for others is invaluable – why reinvent the wheel if you don’t have to?
7. Businesses need a plan. One reason thousands of businesses fail every year is because they didn’t have a plan. When asked why, they said, “I just didn’t know where to start.” This is where an accountant comes in. A good accountant will partner with a business to look at all the data and help build a road map to success. Poor planning isn’t necessary, and bringing a professional on board can help small businesses plan for success.
8. They understand tax. This may seem obvious, but keep in mind that rules and regulations change frequently, and it’s tough if not impossible for any business owner to keep up with it all. Twenty-nine per cent of Canadian small business owners admitted that accounting and bookkeeping is one of their biggest challenges. An accounting professional can take away your uncertainty and ensure your business stays compliant.
9. Analyze data for growth and profitability opportunities. If all of your data is just sitting in a database and you’re not interpreting, analyzing or using it to help drive your business direction and decisions, you’re missing out on a great opportunity. Have an accountant help you dive into the numbers and use them to propel greater business growth and profitability in the future. A great way to do this is through online collaboration in a small business accounting solution where accountants have visibility into clients’ financial data in real time.
Can your startup survive without the assistance of an outside accountant? Possibly, but the extra insight, guidance, and expertise an accountant offers can be the catalyst that makes your business thrive.”
At JamisonMoneyFarmer PC we have the expertise to get your start-up running smoothly and ensure that you are following the requirements related to sales taxes, payroll taxes, business licensing, and business registration.