Identity thieves are becoming more creative in hitting people with realistic-looking emails and texts about their tax returns and refunds. These messages claim to be from the IRS.

The IRS will only send snail mail letters. They will never contact you via text, phone, or social media.

Scammers use these tactics to obtain your personal information, money, and more, leading to tax identity theft. This is when your Social Security number is stolen and used to file fraudulent tax returns. They then steal the funds your owed by depositing the tax refunds into their accounts.

There are signs that your tax identity has been stolen. One is if your tax return is rejected upon filing. This is due to your Social Security number being used by the scammers.

Another is if you receive a snail mail letter from the IRS notifying you of changes to your online account. If you receive a W-2 form from a company you haven't worked for more than a year, it means your tax identity has been compromised.

The IRS will always send you a letter to verify your identity when they suspect foul play.

To protect yourself from scammers, never give information over the phone, especially when an unrecognized number calls you and you don't know who is on the other end. It's also advisable to file your tax return early and electronically.

Philip L. Liberatore, CPA remains committed to providing you with important information that pertains to your success. Learn more here: https://www.liberatorecpa.com/

New investors may forget to consider taxes when dipping their toes into the crypto world. However, the IRS is cracking down on tax compliance. Be aware of how to handle your tax reporting when it comes to your digital assets.

Taxable events from crypto investments require tax reporting. A taxable event means a scenario that triggers or realizes income. When you buy Bitcoin at $1,000 and the value goes up to $1,500 and you sell it, it is a taxable event. Your realized gain is $500.

As stated in the IRS virtual currency guidance, taxable events for digital currency are trading crypto to a currency such as the US dollar, trading one cryptocurrency for another digital currency, spending cryptocurrency to purchase goods or services, and earning cryptocurrency as income.

If you have any questions, contact me at 877-6-SOLVER.

Philip L. Liberatore, CPA remains committed to providing you with important information that pertains to your success. Learn more here: https://www.liberatorecpa.com/

Are you unsure where to start with your tax planning? Do these simple tips that individuals like you can follow.

You should max out your retirement plan. Remember that withdrawing funds from a retirement account can trigger additional taxes of up to 40% or more. Ensure you have confirmed your withholdings.

Consider purchasing property. Also, take note that Sale of Property can initiate capital gains tax and must be communicated to your tax preparer before selling.

Donate money to charity. Don’t forget to track your out-of-pocket medical and dental expenses. If you’re someone with a child or a dependent, be aware that Child Tax credit reverts to $2,000 per child. Since 2021, dependent care expenses are no longer refundable.

Philip L. Liberatore, CPA remains committed to providing you with important information that pertains to your success. Learn more here: https://www.liberatorecpa.com/