IRS Warns of Identity Thieves During Tax Season
Tax season is upon us and for some this means a substantial refund check may be due from the government. However, you may not be the only one seeking to cash in on your refund. Over the past five years, the IRS has seen a steadily increasing number of fraudulent returns being paid out. Identity thieves are obtaining Social Security numbers from unknowing individuals, filing their tax returns, and stealing their refunds.
If you are a victim of stolen identity and a fraudulent tax refund has been submitted, you can file a case with the IRS. However, it typically takes about four months for the IRS to review your claim, determine that the filing was fraudulent, and allow you to resubmit your taxes and receive a refund. For some, this may prove to be not only a hassle but also a strain on an individual’s finances.
Internally, the IRS indicates that it is taking a number of steps to prevent fraudulent tax returns prior to them being paid out. The IRS claims that it has stopped approximately 19 million suspicious returns since 2011 and has protected more than $63 billion in fraudulent returns. It also provides a number of safety measures individuals can take to ensured that their identities are not stolen and that they will not become victim to fraudulent tax return filings. While you cannot protect yourself entirely, you can ensure that you only provide your Social Security number when necessary and only on protected websites. The IRS also advised that individuals do not carry their Social Security card with them or keep in their wallet any documents containing the Social Security number or tax identification number for businesses. These steps will decrease the chances that your identity will be stolen and decreasing your chances of having to deal with the hassle of a fraudulently filed tax return.
Your Retirement Checklist: Hiring a Financial Advisor and Asking the Right Questions
One of the most important issues in preparing for retirement, and also ensuring the future viability of your finances, involves the determination of whether hiring a financial advisor is beneficial to your circumstances. Certainly engaging the services of a financial advisor is not a decision to take lightly and many individuals may be hesitant in paying for these services, especially considering the trust problems currently surrounding the financial industry.
Despite these trust issues, financial advisors could provide honest, competent and important advice in preparing for your future and the viability and sustainability of your finances. So, when hiring a financial advisor, you should treat it as if you were hiring a babysitter for your children. Ask the right questions and make sure that you are comfortable paying this individual with your hard earned money. But what questions should you ask?
There are a number of standard questions you should ask a financial advisor prior to retaining their services. What credentials do they have? You will want to know the educational background and experience of your financial advisor. What they know and how they know it matters, and their track record for securing retirement is important. Remember to check whether the advisor is considered a Certified Financial Planner (CFP) or a Chartered Financial Consultant (ChFc). Do some Internet research and determine if your planner is highly regarded. Do not hesitate to ask for a list of qualifications and resources from the advisor.
How much will you charge and how am I going to be billed? This is one of the most basic questions of hiring individuals for the provision of services. You will want to know whether your advisor will be billing you annually or quarterly and whether the advisor will be taking a commission based on a percentage of your investments, whether they will be charging an hourly or flat fee for their advice, or doing both. Make sure that your advisor is willing to provide a breakdown of the services provided and how much each item is costing you.
How will I know if your advice is working? Good advisors will make sure that their clients are advised at every step of the way, not just when certain investments give them high payouts. Check with your advisor regarding their policies of advising their clients of all of their investments and the status of their investments. You should always know where your investments are at and how the advisor is acting in the best interest of you and your assets.
The Top 1% of Your State: How Much Richer are They?
With income and minimum wage on the rise, many people are asking how much it takes to get into the top 1% in every state. According to a report issued by the Economic Policy Institute, which compared IRS data for the 2012 tax returns submitted in each state, the answer to this question may vary.
Interestingly, income data for all fifty states revealed that the five easiest states to get into the top 1% consisted of Arkansas, New Mexico, West Virginia, Kentucky, and Mississippi. For example, in Arkansas, you only need to meet a threshold of $228,298.00 in income to be in the top 1% of that State. Similarly, in New Mexico the threshold was $240,847.00 and in West Virginia the threshold was $242,774.00. Kentucky had a threshold of $262,653.00 and Mississippi had a threshold of $262,809.00. West Virginia was the only state to report an income decline between the years 2009 and 2012 with all other states declaring some sort of income growth.
What states are the hardest to get into the top 1%? Connecticut was listed as the number one most difficult state to be in the top 1% with a threshold of $677,608.00. Behind Connecticut with a threshold of $555,341.00 was the District of Columbia followed by New Jersey with a threshold of $538,666.00. Massachusetts came in fourth rank for the hardest to get into the top 1% with a threshold of $532,328.00 and New York State came in fifth with a threshold of $506,051.00.
This study provides a clear definition of the economic status of the states and the income received by its residents. The northeast generally reports the largest income base in the country and declares the largest gap between the top 1% and everyone else.
Bitcoin Expected to Explode as New, Efficient Currency
On Monday, February 2, 2015, the first U.S. bitcoin exchange is due to open and discussions about the success of bitcoin and the financial industry is on the rise.
But, what is bitcoin? Bitcoin is defined by Bitcoin.org as a “new payment system and completely digital money utilized in a peer-to-peer payment network” and “powered by users with no central authority or middlemen”. In essence, bitcoin is like cash for the Internet. Individuals are free to exchange bitcoin as currency for both goods and services via mobile apps or computer programs that provide a virtual “wallet”. These apps and programs issue each bitcoin user a ledger similar to that issued by a bank for a savings or checking account. This ledger will allow each user to track their transactions. Each user is responsible for their own bitcoin and has full control over the exchange of their bitcoins. And bitcoins are currently being used by a growing number of businesses and individuals worldwide. A number of large businesses reported to be using bitcoin includes restaurants, law firms, and popular online companies such as Namecheap, WordPress and Reddit. At the end of 2013, bitcoin.org reported a circulation exceeding 1.5 billion U.S. dollars worth of bitcoins exchanged daily.
This new bitcoin technology may seem like the key to virtual wallets and the hands free future of our finances. However, the introduction of bitcoins has not been without its security failures.
One of the largest bitcoin users, Mt. Gox, filed bankruptcy in 2014 after losing hundreds of millions of dollars in bitcoins due to an electronic attack. Bitstamp was forced to shut down and suspend services after losing nearly $5.2 million U.S. dollars worth of bitcoins. A number of companies do have security in place to fight these electronic attacks and despite these unknowns, bitcoin is expected to explode in worth exceeding that of companies like American Express, Visa and MasterCard.
Prepared by Leah Constanzo