Tax

Avoid Scammers Getting Their Hands on Your Stimulus Check

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

With millions of Americans currently losing their jobs and income during these difficult times, receiving a stimulus check is necessary for many Americans to stay afloat. The IRS has already begun to distribute stimulus checks for up to $1,200 to individuals. Although the thought of receiving money can seem like a good thing, it can also mean that there are thieves looking to take your check before you can even receive it.

Here are a few ways to avoid becoming a victim of fraud:

  1. The IRS will never contact you. Scammers may try to contact you claiming that they are an IRS agent and they need further personal information in order to process your check. This tactic is called “spoofing” and taxpayers can expect an increase in receiving these types of fraudulent phone calls as stimulus checks are being distributed. 
  2. Avoid clicking on emails claiming to be from the IRS.  Another tactic that you may come across are emails that appear to be from the IRS requesting that you provide your social security number or banking information. Be wary of these emails and avoid clicking on any associated link that is attached to the email as it could lead to a virus on your computer and whatever personal information stored on your computer could be stolen.
  3. If you don’t have direct deposit, you’ll never need someone to assist you with setting it up. The IRS will be sending money to households via direct deposit, using the banking information that you placed on your tax return. 

If you don’t have direct deposit, the IRS provides you with two options. You can submit your banking information to the IRS portal or you can choose to receive a paper check. If someone attempts to contact you claiming that they’re going to assist you with receiving your stimulus check much quicker, avoid providing any personal information to this person. The IRS will never attempt to contact you about your stimulus check and provides tools on their website for taxpayers to fill out themselves.

If you need tax help, contact us for a free consultation.

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Where’s my Tax Refund?

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Most taxpayers will expect to receive their refunds in 21 days once their tax returns have been received by the IRS. 
  • If a tax return is amended it could take up to 16 weeks before a tax refund is received. 
  • If a refund check has not been received, a taxpayer can file a claim online to receive a replacement check. 

For most taxpayers, filing their taxes is not something they get excited about doing every year, but there is something that most look forward to receiving after filing their tax return. Receiving a tax refund means you have extra money in your pocket that you can either throw into your savings or perhaps put it towards that vacation you’ve been dreaming about all year. Whichever way you choose to spend your money, there are important details to know about your refund and how long it may take for you to receive it.

Here are a few questions taxpayers have when it comes to receiving their refund:

How quickly will I receive my refund?

Once your tax return has been filed and received by the IRS for processing, it typically takes less than 21
days.

It’s been over 21 days and I still haven’t received my refund. Is this normal?

It sometimes takes the IRS more than 21 days to process your tax return but, it could also mean that there was an issue with your return. Here are a few that may delay you receiving a
refund:

  • Errors on your tax return.
  • Your tax return was incomplete.
  • It was flagged for identity theft or fraud.
  • Your return included the Injured Spouse Allocation form – this could take up to 14 weeks to process.

When can I start tracking my refund status?

24 hours after you’ve e-filed your tax return, you can start checking your refund status. If you mailed in your return, it could take up to four weeks before you’re able to check your status. 

Will amending my tax return prolong me from receiving a refund?

If you’ve amended your return, you can expect to receive your refund in about 16 weeks. 

What if my refund was lost, stolen, or destroyed?

You can file a claim on the IRS website. A replacement check will be mailed out if it has been more than 28 days from that date your refund was mailed off. 

If you need tax help, contact us for a free consultation.

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Would You Cheat on Your Taxes?

Would you cheat on your taxes? If you said “no,” count yourself in the majority of people who wouldn’t commit tax fraud.

According to the Taxpayer Attitude Survey, about 87% of American Taxpayers say that it is not acceptible to cheat on taxes, while more than 95% agree that it is every American’s civic duty to pay their fair share of taxes. In addition, 91% of those surveyed agreed that everyone who cheats on their taxes should be held accountable.

Think that if you look honest, you can get away with fudging your taxes? Think again.

However, actual revenues collected by the Internal Revenue Service tell a somewhat different story. The so-called “tax gap” is defined as the difference between the total income tax liability and the amount of income tax payments that are made voluntarily and on a timely basis. This tax gap totaled $450 billion in 2008 but shrank to $385 billion after late payments were posted.

Taxpayers across the country under-reported their income by an estimated $376 billion the same year, while underpayments amounted to $46 billion, and $28 billion was owed by non-filers – people who did not complete tax returns at all. All told, the compliance rate in 2008 on the estimated $2.66 trillion tax obligation was about 83 percent.

Under-reporting Income to the IRS

Most taxpayers are diligent about paying taxes on income reported on W-2 forms. After all, the IRS receives the same information, so skipping out on paying what is owed is fairly difficult. Self-employed workers who receive 1099 forms have somewhat more latitude about how much total income they report due to legitimate business-related expenses. Nonetheless, earnings listed on 1099 forms are also reported to the IRS; therefore, most self-employed workers at least acknowledge those earnings.

On the other hand, a significant amount of cash income is never reported to the IRS. If you were paid $100 to fix someone’s computer, you will probably get by with not reporting that income. However, if you collect a cool $5,000 on the side through your online storefront, you shouldn’t expect to fly under the IRS radar if you don’t acknowledge the sum on the following year’s tax return.

Questionable Tax Deductions

There is nothing wrong with claiming every penny to which you are entitled through legitimate tax credits and deductions. This is not regarded as cheating on your taxes. If you are self-employed and you have established an authentic home office, you should absolutely claim the home office deduction. If you are a wage earner whose boss expects you to call on out-of-town clients on your own dime, go ahead and claim the deduction for work-related travel. As long as you can document your claim, you won’t be accused of tax fraud – even if you are audited by the IRS.

On the other hand, taking a vacation in Hawaii and claiming a deduction because you attended a seminar during the trip likely won’t pass muster with the IRS. Likewise, the cost of your daily commute from your home to your cubicle is also unlikely to be deductible. If you have doubts about whether a deduction or credit is legitimate, it’s best to check with a tax attorney or with a certified public accountant to avoid being accused of cheating on your taxes.

Discredited Tax Protests

A persistent movement exists among a small group of individuals who claim that federal income taxes are unconstitutional because the Sixteenth Amendment to the Constitution (which was ratified in 1913) was improperly ratified. These tax protesters insist that they are exempt from paying income taxes as a result. The IRS has repeatedly dismissed such claims, frequently charging delinquent taxpayers with filing frivolous returns.

One of the more prominent figures snagged for adhering to discredited tax protester claims is actor Wesley Snipes. Snipes was released from federal prison in 2013 after serving nearly three years for misdemeanor charges related to willfully failing to file tax returns. Snipes claimed that he was misled into believing that his actions were legal by his co-defendants, tax-protesters Eddie Kahn and Douglas Rosile. Federal prosecutors had also pursued felony charges against the three for tax fraud and conspiracy, alleging that Snipes had shipped more than $15 million overseas in an illegal bid to avoid paying taxes. Kahn and Rosile were convicted of those charges, but Snipes was acquitted.

Straight-Up Tax Scams

While the actions described above can be described as questionable claims and gray-area tax-related behavior by otherwise honest citizens, straight up tax evasion scams are also prevalent. Such tactics as strictly paying employees in cash and setting up questionable business and family trusts are among the more common tax evasion schemes attempted by both individuals and companies attempting to skirt paying income taxes.

While a case can sometimes be made for leniency concerning unwitting tax evasion, the IRS frequently takes a dim view of defendants that in its view have deliberately attempted to commit fraud. Outright scams, once uncovered by the IRS, are likely to result in criminal tax evasion charges and long prison sentences upon conviction. This contrasts with civil tax evasion, which can carry hefty fines but no jail time.

What is the Penalty for Cheating on Your Taxes?

Even if you get away with underpaying your taxes (or failing to file returns at all) for a short period, the odds are good that you will be caught eventually. The statute of limitations for federal tax audits is doubled from three to six years if you fail to report at least 25 percent of your income, or if you have income on undisclosed foreign assets that totals $5,000 or more. There is no statute of limitations on IRS audits for filing fraudulent returns or unlawfully failing to file tax returns, which means that you could be looking over your shoulder for years – or even the rest of your life.

Optima Tax Relief offers a range of tax relief services to help you prepare your taxes. Schedule a tax consultation with one of our licensed professionals today to discover how we can help you.

How IRS Debt Can Ruin Your Travel Plans (and Jeopardize Your Passport)

The stress of owing the IRS can be overwhelming. The ever-present threat of having a lien placed on your assets, the fear every time you check your bank account to discover it has been levied dry, the strain of having the IRS garnish your monthly wages; these are just a few of the things that millions of Americans go through every day. Now, the IRS has made further changes to crack down on Americans who have not paid their taxes.

As of February 2018, Americans who owe the IRS more than $50,000 are at risk of having their passports revoked. If you have unpaid taxes owed to the IRS, it is important to either pay your balance in full or go on a monthly installment agreement in order to avoid having these travel restrictions placed on you. The State Department is now working alongside the IRS to not only revoke existing passports but to also deny any passport application for those with seriously delinquent tax debt.  (If you are overseas and your passport is denied, the State may issue a temporary passport that has limited validity to return to the United States.)  Essentially, until the tax debt is settled with the IRS, people will be placed on this new “No Passport” list.

There are a few exceptions to be aware of.  You won’t be at risk of being placed on the “No Passport” list if you are currently going through bankruptcy, if the IRS acknowledges you have been the victim of identity theft, or if there is a natural disaster declared on a federal level.  You may also be able to keep or renew your passport if you have a request pending for an installment agreement, have a pending offer in compromise with the IRS or if the IRS has accepted an adjustment that will satisfy your debt. And if you are placed on the “No Passport” list, the IRS will hold your application for 90 days to allow you to resolve your tax liability, pay your balance in full or enter into an installment agreement before revoking your passport.

This is yet another sign that the IRS is escalating their collection efforts against Americans who have unpaid taxes and another reasovn for you, as a taxpayer,  to stay current and compliant with their IRS filings.  If you are in the unfortunate situation of having delinquent IRS debt, it is wise to speak to a qualified tax professional who can help you evaluate your options sooner rather than later. Because when it comes to owing money to the IRS, delaying is almost always a losing strategy. For more information regarding on the IRS passport revocation and denial policy, click here!

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

Tax Tips for Uber Drivers and those Working in the Gig Economy

So you just joined Uber. Now you have a little extra cash, and you’re the one picking up the tab at dinner when you go out with friends and family. There couldn’t possibly be a downside to earning this additional income, right? Well, while there isn’t necessarily a drawback to having more money in your pocket, there are a few factors to being an Uber driver that you should consider from a tax standpoint. Here are some common questions and tax tips that first time Uber drivers should think about before getting started.

What is the difference between a 1099 earner versus a W2 earner?
If you have taxes being deducted out of every paycheck, you are most likely a W2 earner. At the end of the year, a W2 earner will receive a form that will state their annual wages along with a breakdown of the taxes that were withheld throughout the year.

A 1099 earner, however, does not have any taxes withheld from their income. The total amount of pay you received from Uber (or any other person or entity for whom you were a 1099 earner) during the year will be reported on a 1099 form. It is the responsibility of the 1099 earner to either make estimated tax payments (more on this below) or pay any balance in full at the end of the tax year.

What are estimated tax payments and can they help me avoid owing at the end of the year?
Estimated tax payments, or ETPs, are based on the amount of income that you expect to have earned in the current tax year. ETPs are usually made if a taxpayer believes that they will have a tax balance at the end of the year. A taxpayer may also wish to make ETPs if they are not withholding enough taxes from their paycheck, or if taxes are not being deducted from their income at all. A 1099 earner (or even a W2 earner who does not have enough withholdings listed) has the choice to pay their estimated tax payments bi-weekly, monthly or even quarterly. ETPs must be made in order to avoid owing at the end of the year, and it is even possible to receive a penalty if ETPs are not being made. The IRS allows you to make your estimated tax payments by either mailing a payment in, paying over the phone, or even paying online.

What are tax write-offs and how do I keep track of all my business expenses?
Being that you are a 1099 earner for Uber, it’s a little like running your own business. And just like if you were running your own business, you must document and report any income you have received and expenses you have made. Many of these expenses are tax write-offs. Some expenses that you may experience as an Uber driver include car maintenance, gas, and mileage. You will need to keep proof of your expenses throughout the tax year in order to write them off with the IRS. In order to do this accurately, you will need to keep track of how much of your mileage is used for business and how much is used for your personal life. There are multiple downloadable apps on the market designed to keep track of this for you. If you forgot to do this, don’t worry – you can request this information directly from Uber. Once you know what percentage of your mileage is used for business, you can calculate what percentage of your gas and maintenance can be listed as a tax write-off. Don’t forget to save those receipts; you will need them in case you are ever audited by the IRS!

Whether you’re using Uber to pay the bills or to give you a little extra income on the side, paying your taxes doesn’t have to be scary. Following the steps above and stashing away a little bit of your income can help ensure you don’t get blindsided come tax season. Now get out there and have some fun with your extra cash and remember, drive safe!

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

Medical Identity Fraud – A Risk to Your Health and Wealth

Imagine this scenario: you’re sitting in a doctor’s office with a long-lasting fever after your camping trip. Because it may be an infection from a tick bite, the doctor decides to give you an antibiotic shot. She glances at your records, swabs your arm with alcohol, picks up the syringe and says “this little dose of penicillin should help…” and you interrupt: “wait, I’m allergic to penicillin.” “But, that’s not what your records say… we gave you penicillin last time you were here.”

Frightening? Yes. Impossible? Not at all.

Medical identity theft is on the rise and it can not only have crippling effects on your finances but can seriously put your health in jeopardy.

The Medical Identity Fraud Alliance, a group of concerned corporate and non-profit partners,  speculate that over 2 million Americans were put at risk of medical identity theft in 2014, a figure that leaped 22% from previous research. This doesn’t even take into account the nearly 80 million individuals affected by the Anthem data breach in 2015 – the country’s largest healthcare breach.

Identity thieves steal personal health information (PHI) such as social security numbers and medical insurance identification numbers for two main reasons:

  • For financial gain by filing fraudulent claims to your health insurer (including Medicaid/Medicare) in order to receive a reimbursement check
  • Free medical care of high cost or elective procedures or to secure prescription medication – specifically narcotics that can be abused or sold on the black market

Financial fraud such as a stolen credit card can be frustrating, but can be quickly resolved since it’s easier to detect, and often doesn’t have significant long-term financial impacts. Medical identity fraud, on the other hand can cost a victim $13,500 on average and be notoriously difficult to resolve.

Because of advancement in electronic communication and collaboration in the healthcare industry, PHI is more exposed and accessible. At the same time, this doesn’t always mean that your health provider is on the same page with your insurer. PHI is rarely tracked across multiple networks and this gap can make stealing and using it feasible.

Here are a few things you can do to minimize your risk of medical identity fraud:

  • Carefully read all correspondence from your medical provider and Health Insurance Company. Treat each line item like you might for a bank statement and ensure that each charge or claim is valid.
  • Safeguard your Social Security number and healthcare data. Make sure that when you provide it, it’s absolutely necessary. It’s always okay to ask.
  • Avoid putting medical procedures and hospital stays on social media. You never know who’s looking and this piece of data could be the last one that the thief needs to commit their crime.

Our identity protection program provides comprehensive, proactive monitoring for several data points, including your medical information. To learn more about how we can help you minimize your risk of medical identity theft, visit https://optimatax.idprotectiononline.com/enrollment/.

 

Identity Safety And Staying Secure With Wearable Devices


The increasingly connected world brings new conveniences that greatly benefit our everyday lives. No new connected device seems more ubiquitous than wearable devices – nearly 33 million were in use in the U.S. in 2015 by an estimated 20 million people. Smartwatches like Pebble and Apple watch allow us to access the internet with a flick of a wrist. Wearable health tech like the Fitbit and the gadget-class favorite Jawbone help improve the livelihoods of millions.

As much as wearables bring value to our lives, they also create a new opportunity for criminals to extract personally identifiable information. Like many other new technologies, security vulnerabilities in wearables are being exposed and potentially exploited.

The more information that’s collected, the easier it is to identify account numbers and passwords as well as medical ID numbers and tax return data. Better understanding the individual’s routines and habits ensures that criminal activity will go unnoticed for longer periods of time.

But some wearable data can provide quicker wins for identity thieves:

Most wearable devices use an accelerometer and gyroscope to track forward motion and directional orientation. Some even contain an altimeter to measure altitude for hikers and climbers. All of this data is crunched into code that orients the user’s specific location and tracks their activity – sometimes down to a few inches. Shockingly, new research found that ATM PIN codes could be discerned from the data in wearables’ sensors with 80% accuracy on one try and 90% accuracy after three tries.

A flash survey conducted by corporate identity management firm Centrify exposed some worrying trends:

  • 69% of wearable device owners don’t utilize login credentials such as passwords, fingerprint scans, or voice recognition to access their device, and
  • 56% of wearable owners use their device to access corporate applications such as Outlook, Dropbox, and Salesforce.
  • While the sample size was small, the survey was conducted at the RSA Conference, one of the world’s largest gatherings of information security professionals. If those on the frontline of data security leave their personal and corporate data at risk, it’s easy to imagine that the population at large may be even less cautious – jeopardizing their identities and your corporate data security.

Staying Secure With Wearable Devices

While wearables (and all technology, for that matter) are never 100% secure, there are a number of tactics that can be undertaken to minimize the risk of data theft:

  • Opt-out of automatic data transmission that will continually upload information via Wi-Fi or other networks.
  • When using a Wi-Fi, stick to known and/or secure networks.
  • Enable passwords and change them regularly. If available, use two-step authentication.
  • Physically secure the device if it’s not in use. Particularly, when traveling, utilize hotel safes.
  • Take time to learn how to remotely erase data so that the device can be “cleaned” if it’s lost or stolen.
  • Make sure to regularly update the operating system in order to patch known security gaps.

Looking for ways to minimize your risk of identity theft? Maintain a peace of mind while using your wearable device by enrolling in Optima’s ID Protection Plan at optimatax.idprotectiononline.com.

Spring Cleaning For a Secure Identity

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Spring is in full swing with its longer and sunnier days, and for many people, it is time for the annual spring cleaning to disentangle their homes from the build-up of wintertime clutter. However, much of that “clutter” can be pure gold for an identity thief. Junk mail such as credit card offers and unsolicited loan pre-approvals are chock full of valuable information about finances and lifestyle. Virtual clutter is also a target – unsecured and unorganized computer and smart phone data can be mined.

Minimize identity theft risk this spring with these easy tips:

  • Paperwork. Decide which documents need to be saved and then file them in a secure location. Unwanted items that contain personal information should be shredded, including receipts, bank and credit card statements, credit card offers, medical records, and health insurance statements.
  • Computers. Organize personal information and documents into password-protected folders. When deleting old or unneeded files, make sure to regularly empty the computer’s recycle bin. Ensure that all anti-virus software is up-to-date and run a full scan to ensure that the computer is free of viruses and malicious software.
  • Smartphone. Enable the phone’s password-protection features and only use secure networks, especially when using online banking or other apps that transmit sensitive information. When upgrading to a new device, wipe the old phone’s memory and restore to factory settings.
  • Wallet and Purses. Shred old receipts and outdated credit cards. Remove everything that isn’t necessary on a day-to-day basis – especially a Social Security card.

This spring, you can make sure you’re keeping your identity as clean and secure as possible by enrolling in Optima’s ID Protection Plan at optimatax.idprotectiononline.com.

Tax Season Is Here…And So Are The Scammers

The start of each new year typically brings renewed resolve to get healthy, strengthened desires for personal improvement, and of course, tax season.

Tax season can mean different things to a lot of people. Some look forward to a large refund; for others, it’s one more thing to tack onto their to-do list. For the scammers out there, it means the annual opportunity to rake in fraudulent refunds has finally arrived. Tax scammers are ruthless. They’re unaffected by the thought of families and individuals dependent upon what is likely their biggest check of the year being denied this financial relief.

If there’s one thing we can be sure of, it’s that there will be scams this tax season. Fortunately, there are safeguards you can take to stay protected this tax season.

  • Schedule time with your tax preparer now so you can get your taxes done as early as possible. This will help decrease the chances that a fraudster will get your refund before you do.
  • Sign up for Scam Alerts from the FTC to stay abreast of all the dirty tricks scammers are currently using.
  • Talk to someone in your HR department to see if you can get your W-2 before it’s mailed out. This will help ensure that you actually receive it so you don’t have to risk it being lost or stolen in the mail.
  • Never send emails with personally identifiable information (PII) attached. It’s best to never send them through email at all, but if you must, you should encrypt your message by making a change in your email’s security settings.
  • Beware of computer scams. These can come via email or as popups on your computer asking for your personal information. The IRS saw an approximate 400% surge in phishing and malware incidents in the 2016 tax season.
  • Always use a professional, trustworthy tax preparer. Sometimes, even national tax preparation chains can scam you out of your money or use less-than-secure procedures when it comes to handling your personal information. Make sure you use someone you trust.
  • Never provide any personal information over the phone to someone who says they are from the IRS. The IRS will never contact you via phone, email or social media.

Tax season is stress enough as it is; worrying about tax fraud shouldn’t have to be a part of it. Maintain a peace of mind by filing taxes as early as possible and by enrolling in an Optima Protection Plan at optimatax.idprotectiononline.com.

New Year, New You: Invest in Your Identity Wellness

The holiday season is now a thing of the past and now, New Year’s resolutions are the hot topic of conversation. The ultra-motivated will have a ten-part list covering everything from weight loss goals to finding a new hobby. And then there will of course be some outliers (16% of us according to a Neilson sruvey) that will admit that resolutions just aren’t for them. Wherever your ambitions lie on the spectrum, the one area of your life that can’t afford to be brushed off is your identity wellness.

Though often overlooked, your identity wellness deserves the kind of attention that people tend to put towards their health at the start of each new year. Your identity wellness encompasses everything from your financial security, credit profile, and credit score to digital privacy.

The New Year is the perfect time to make proactive identity protection a part of your everyday life. With these tips, you’ll be on your way to a smarter, safer, and more identity-secure you:

  • Check your bank and credit accounts frequently. It’s best to catch fraud as early as possible so that you can take action immediately; this minimizes damage and makes the resolution process easier.
  • Check your credit report regularly. Federal law requires the three major credit bureaus (Equifax, Experian, and TransUnion) to provide you with a free credit report once a year. You can stagger these free reports every four months from each bureau so that you’re seeing your report pretty often. This is why credit monitoring services are so valuable: alerts are sent at the first sign of suspicious activity on your credit profile.
  • Stop connecting to public Wi-Fi. It’s convenient, of course, but frequently it’s unsecure. This means that any information you input while connected could be accessible by someone else. So if you must, just be sure to never access your financial accounts or any other sites that require a password when using public Wi-Fi.
  • Don’t click the “Remember Me” box on your digital accounts. If your computer, laptop, or smartphone ever got into the wrong hands, the perpetrator could have a field day accessing your accounts and gathering important personal information. Even worse, they could log into your bank or credit accounts.
  • Keep your firewall and anti-malware up to date. Firewalls block unauthorized access to your computer’s information, while anti-malware prevents malicious software from being downloaded to it. You must be sure to keep them up to date though, as hackers are constantly creating new ways to infiltrate your computer.
  • Update your passwords or look into a password manager. We all know by now that we should change our passwords often with strong, secure ones. Let’s face it though: most of us don’t. An easier solution might be to keep all of them together in a password manager so that you can use complex ones – without forgetting!
  • Shred your documents before tossing them. This includes your credit card/bank statements, pre-approved credit card offers, utility bills, and anything else that contains your personal information.

Of course nothing beats having a comprehensive identity protection provider that is there 24/7 for when the unexpected happens. Services like credit and identity monitoring send alerts if any suspicious activity is found so that you can take action immediately. To find out how you can protect your identity with Optima’s Protection Plans, visit optimatax.idprotectiononline.com.