Tips for Avoiding Scams

Tips for Avoiding Scams

Unfortunately, scammers continue to get more creative in their attempts to trick the general public into relinquishing funds and personal information for nefarious purposes. Here are some important best practices from the Better Business Bureau (BBB) to help protect yourself next time you connect with an unknown caller, or come across a suspicious link online:

Try to only answer the phone when you know who is calling. Our curiosity is piqued by those unknown phone numbers, and many times, they look just familiar enough, but don’t answer your phone unless you know who it is, says the BBB. Today’s scammers are very convincing once you do pick up, pretending to be anyone from your grandchild to a bill collector from your utility company, but think about this: anyone who genuinely needs to reach you (like a family member or someone to whom you actually owe money!) will leave a message.

Don’t provide personal information without asking why. In today’s digital environment, we tend to give away our personal information online with ease. But always question if a site really needs your contact information, credit card information, or Social Security Number. In fact, before entering any information at all, make sure the site has ‘https’ in its URL, which signifies that it is secure.

Don’t send payments via wire transfer or prepaid gift cards. The bottom line is, no legitimate business only accepts these payment methods, so when this request is made, you can be pretty confident it’s a scam. Wire transfers and prepaid gift cards are the quickest and most untraceable ways to send money, according to the BBB. If you can’t pay by credit card, which has the most buyer security since you can dispute charges, something’s fishy.

Don’t click, download or open anything that comes from an anonymous sender. This is most definitely the work of a scammer attempting to gather mass quantities of personal information or install malware on your computer. Always be wary of such unsolicited messages that don’t contain your name or other personalizing information and simply delete.

If you’re afraid you’ll miss out on something by being too cautious, don’t be. Legitimate companies are well aware of the above scam tactics and more and, therefore, practice safe online and telecommunication practices. You won’t be asked to do any of the above or be contacted in suspicious ways by businesses seeking to do you no harm.

Standard or Itemized Deductions

Standard or Itemized Deductions

The Tax Cuts and Jobs Act of 2017 increased the standard deduction to $24,000 for married couples.  There will be some instances that homeowners may be better off taking the standard deduction than itemizing their deductions.  In the past, homeowners would most likely be better off itemizing but the $10,000 limit of state and local taxes (SALT) adds one more issue to consider.

Let’s look at a hypothetical homeowner to see how a strategy that has been around for years could benefit them now even though they haven’t used it in the past.  The strategy is called bunching; by timing the payments in a tax year so that they can be combined to make a larger deduction.

Let’s say that the married couple filing jointly has a $285,000 mortgage at 5% for 30 years that has about $14,000 in interest being paid.  The property taxes are $6,000 and they have $4,000 a year in charitable contributions for a total of $24,000 of allowable itemized deductions on Schedule A.

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Since that deduction amount is the same as the Standard Deduction, there is no monetary advantage one way or the other.  However, if the taxpayers were to pay their interest because they must make timely house payments but only pay $2,000 of the 2018 property taxes in December of 2018 and the balance of the $4,000 in January, they transfer part of the deduction into 2019.

Additionally, if they make their intended charitable contribution for 2018 in January of 2019, it makes that deductible on the 2019 return.

Since the total deductible amounts paid out in 2018 was $16,000, the taxpayers would have an $8,000 benefit that year from taking the Standard Deduction.

Assuming they made the same $4,000 charitable contribution in 2019 during the year and paid the house payment and property taxes on time, their total deductions for 2019 would be $32,000 which is $8,000 more than the Standard Deduction.

In this example, the taxpayers in 2018 and 2019, would benefit a total of $16,000 in tax deductions by bunching and electing to take the standard deduction one year and itemizing the next.

This is only an example but if your situation is similar, it might benefit you to consider an alternative when to take the standard deduction and when to itemize.  This is a conversation you need to have with your tax professional to see if it would work for you.