SEPTEMBER 2017
Khaas Baat : A Publication for Indian Americans in Florida

ACCOUNTING

IRS Taxpayer guide to Identity Theft

By SURESH KUMAR, CPA

Identity theft has become one of the fastest-growing crimes in America. Identity thieves may misuse the social security number and credit information fraudulently to obtain refunds, loans, or other financial transactions.

Tax-related identity theft occurs when someone uses your stolen Social Security number (SSN) to file a tax return claiming a fraudulent refund. Generally, an identity thief will use the SSN to file a false return early in the year. Tax payer may be unaware that they are a victim until they try to file the tax returns and find that the returns already has been filed using their SSN.

Warning signs

Be alert to possible identity theft if you receive an IRS notice or letter that states that: more than one tax return was filed using your SSN; or you owe additional tax, refund offset or Have had collection actions taken against you for a year you did not file a tax return; or IRS Records indicate you received wages from an employer unknown to you.

Steps to take if you become a victim

How to reduce your risk

The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. Be very careful with any scam emails or telephone calls asking for tax payments.

2017 Tax tips:

Get organized: Start collecting and organizing all of the receipts, canceled checks and other documents that support the income, deductions, and credits you’ll be reporting or claiming on your return. The better your records, the more accurate your tax returns will be.

Taxable Income/Tax brackets: Check your taxable income and tax brackets for 2017. New rules may have kicked in phasing out exemptions at certain income levels and imposing new limits on deductions.

Verify W-2 tax withholdings: Many times the tax payers either withhold too much or too little tax deductions from their payroll/W-2 income. Review withholdings to make the taxes withheld from your pay closer to the taxes you’ll owe this year. This is especially true if you normally get a large refund and you would like more money in your paycheck. If you owed tax when you filed, you may need to increase the Federal income tax withheld from your wages.

Filings Deadlines:

Individual Extension - Form 1040 – Oct. 16, 2017

There are various limitations, thresholds, & procedures for many of the deduction and filings. Please consult your CPA/Tax attorney/or tax consultant for proper guidance with the above subject matter.

____________________________________________________________________________

Suresh Kumar, CPA, MBA is the Principal of Kumar Consulting, PA, a CPA & Consulting firm licensed in the states of FL, KS, & MO and maybe reached @ 813-421-5068 or info@kumarconsultingcpa.com/www.kumarconsultingcpa.com.

In accordance with IRS Circular 230, the above information is not intended or written to be used, and cannot be used as or considered a "covered opinion" or other written tax advice and should not be relied upon for the purpose of avoiding tax-related penalties under the Internal Revenue Code; promoting, marketing, or recommending to another party any transaction or tax-related matter(s) addressed herein; for IRS audit, tax dispute or other purposes.

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