IDENTITY THEFT: What to do when your Social Security number is compromised

Cathy A. Robinson, CPA
Senior Manager
robinson@hwco.com
 

When you are a victim of identity theft, the issues can seem endless. Last week, we discussed the steps to take to recover from identity theft. This week, we discuss the issues that come with having your Social Security number compromised.  

If there is a breach and your Social Security number was obtained and used, there are several factors of which you should be aware of:

 

1.)    The Social Security Administration cannot help you with a resolution

2.)    You need to report the incident to the Federal Trade Commission.

3.)    Victims should contact the IRS.

4.)    File an online complaint with the Internet Crime Complaint Center (IC3) at www.ic3.gov.

a.       If you haven’t heard of this agency or know what they do, that’s okay. We’re here to help. The IC3 is a partnership between the FBI and the National White Collar Crime Center. The mission of this agency is to deal with cybercrime.

5.)    Accept free credit monitoring if it is offered by the company responsible for leaking your information.

6.)    Victims should consider placing a credit freeze.

7.)    Monitor your credit report if you do not freeze your accounts.

8.)    In the end, you may have to apply for a new Social Security number.  If you do, you will need to prove your identity, age, and citizenship status. There is no guarantee, however, that a new number will work.  

Being a victim of identity theft can be messy, and having your Social Security number compromised in the process can be challenging. Be sure you know who you need to contact and what steps to take to prevent any further damage. 

This update is published periodically by HW&Co. as an information service to our clients, business associates and friends. It is general information and professional advice should be obtained before acting on any comments contained in this document.

Identity Theft: Know the Steps if You are a Victim

Cathy A. Robinson, CPA
Senior Manager
robinson@hwco.com

 

Are you prepared to receive a notification informing you that the IRS has already received a tax return from you? With another individual tax filing deadline approaching knowing the risks of identity theft is important. It is also just as important to begin taking the steps to protect your identity.

But what happens when you find you’re a victim just before the deadline? 

 

          If you are a victim, there are several steps you will need to take. They are:

 

1.      File a police report.

2.      File a Federal Trade Commission complaint at www.identitytheft.gov.

3.      Contact one of the three credit bureaus:  Equifax, Experian, or TransUnion.

4.      Check to see if any accounts were opened with your financial institutions.

5.      Close any accounts that have been opened.

6.      Respond to any IRS notice immediately.  However, the IRS will not contact you by phone or email. 

7.    Complete the IRS Form 14039, Identity Theft Affidavit. 

8.     File your return by paper and pay the related taxes due.

9.    Contact the IRS Identity Protection Specialized Unit at 800-908-4490.

 

The IRS issues the Identity Protection Pin (IP Pin), which is a 6 digit number assigned to eligible taxpayers.  This number must be used to confirm your identity.

You will receive a new IP Pin each December via regular mail. 

 

Having your identity stolen can be a scary and frustrating ordeal. As with any tax issue, it’s important to remember you can contact your accounting professional with questions and concerns about the risks to your finances.





This update is published periodically by HW&Co. as an information service to our clients, business associates and friends. It is general information and professional advice should be obtained before acting on any comments contained in this document.
 

What You Really Need to Worry About When it Comes to Vacation Rentals



Cathy R. Robinson, CPA
Senior Manager
robinson@hwco.com

Owning a vacation property can be a great idea. You get the perks of vacationing somewhere else for as long as you like, while also being able to rent out the property when it’s not in use. It seems like the perfect scenario. However, there are also some drawbacks to owning a vacation property that you may not be aware of.

So what can you do as a vacation property owner to help make sure you’re compliant?   Begin with good recordkeeping.  Documentation is needed for the rental income and expenses.  The amount of rent that is charged should be the fair market value even if renting to relatives.   If your rental property has a loss for the year and you did not charge fair market value, the loss will be disallowed.  The IRS will need to review all records if you are audited. 

Many business owners also make an error when they assume that just because they have simply paid the federal income tax on their revenue they have nothing else to worry about when it comes to the world of taxes. Sadly, they are wrong.  

First, you need to determine the license requirements as well as the tax.  This can be confusing as these items can be highly localized with different names and requirements. The next step is to register with any state and local tax agencies.  Also, remember to renew your business license each year.  

As always, it is important to consult your accounting professional. They can help you to navigate the tricky waters of the various taxes involved and assist with developing a plan for your recordkeeping.

 

Renting your property can be an easy way to help offset the cost of ownership of the vacation home. It’s important to understand each aspect of ownership so you can avoid any surprises at the end of the year.  

 

 

What is a W-4?

Cathy A. Robinson, CPA
Senior Manager
robinson@hwco.com
 

So you are starting a new job.  You will have many forms to fill out the first day including a W-4.  Do you know why you complete a W-4? Not to worry, we are here to help.

What exactly is a W-4?

Simply, it is used by your employer to withhold the proper amount of Federal income tax from your pay.

Why fill out a W-4?

Completing a W-4 accurately can help save you money in two ways. The first way is it helps to prevent you from overpaying your taxes.  Doing this can mean putting more money in your pocket throughout the year. The second way is to ensure you do not owe anything at tax time.

 How do you fill one out?

If you are single, the W-4 is straight forward and easy to complete. For those who are married or have more than one job, the process becomes more complex.  The W-4 includes a series of worksheets to help guide you through this process.  There are also worksheets included for those who have a spouse working as well or for those who have additional employment. 

It is important to keep in mind as well the higher the exemption number claimed, the higher the amount of your net pay. The tradeoff, however,  there will be less withholding deducted from your pay, and you could owe on April 15^th.

 

Remember, ask your tax professional should you have any questions in regards to filling out the W-4 or the tax worksheets attached to it.