Hackers Strike IRS, Access 100,000 Taxpayers’ Information

Identity theft and tax scams have become a serious issue for innocent American taxpayers in recent years. A new hack that hit the IRS proves this point more than ever.

On Tuesday, May 26, the federal tax collection agency reported that online hackers targeted an IRS service in order to gain access to personal information for over 100,000 taxpayers.

The identity thieves hacked an online service called “Get Transcript,” a system that allows taxpayers to request tax documents and information for filing and recordkeeping purposes. They bypassed a security questionnaire that asked for a taxpayer’s date of birth, street address, tax-filing status, Social Security Number, and other personal information. The IRS became aware of the hack due to an unusually large number of taxpayers that were seemingly requesting transcripts from February through mid-May of this year.

“We’re confident that these are not amateurs, that these actually are organized crime syndicates,” said IRS Commissioner John Koskinen in a press conference.

According to the agency, it has launched a full criminal investigation into the breach and said its main computer system remains operational and secure.

“In all, about 200,000 attempts were made from questionable e-mail domains, with more than 100,000 of those attempts successfully clearing authentication hurdles,” the agency said in a statement.

The IRS is certain that tax refunds were stolen through the hack. It is currently investigating exactly how many fraudulent refunds were stolen. Koskinen estimates that under $50 million in tax refund money has been claimed by the fraudsters. He added that the agency will notify all taxpayers whose information was accessed by the hackers.

“This tax scheme is simply one more piece of the much larger puzzle of more and more tax scams rearing their ugly heads every year,” said Bert Seither, Vice President at 1-800Accountant. “We are dedicated to helping everyone with their tax and accounting needs, but we feel especially obligated to assist those who have become innocent victims of tax fraud.”

If you are one of the affected individuals whose personal information was compromised through this hack, 1-800Accountant is here to help you navigate through this situation. We will offer you a free one-on-one tax consultation to ensure your taxes are in order – and to make sure you receive your tax refund for 2015 and beyond. To claim this offer, call 1-800-222-6868 today. Visit www.1800accountant.com. To learn more about our services.

Speeding to Savings: Tax Tips for Race Car Drivers

It can be very expensive to win a checkered flag. But using these tax tips for race car drivers will help you keep more of your hard-earned money.

It can be very expensive to win a checkered flag. But using these tax tips for race car drivers will help you keep more of your hard-earned money.

Auto racing is an incredibly popular sport. From NASCAR to the IndyCar Series, fans across America attend and tune into auto racing events all the time. Plus, many individuals are involved in the amateur racing circuit in their free time.

With the Indianapolis 500 this weekend, check out these tax tips for race car drivers – no matter if you race for fun or drive as a full-time profession:

Determine if racing is your hobby or your business.

If you race on a track as more of a hobby than a formal business, you’ll likely be strapped to claim many tax breaks on auto racing expenses when filing taxes with the IRS. You cannot claim losses on Form 1040 designed to offset other income you earn. In addition, any deductions you claim on expenses cannot exceed any prize winnings you earn through this activity. If you report consistent financial losses as a race car driver, the IRS will probably assume that you are not partaking in this activity to make money. Therefore, you won’t be viewed as a for-profit business. On the flipside, you can show Uncle Sam that you are indeed operating as a business by having a business plan on paper and by showing your financial statements. In essence, you must provide ample evidence that you participate in auto racing on a full-time basis to qualify for business-related tax breaks.

Claim applicable tax deductions for race car drivers.

If you are taking home checkered flags and paychecks for your prowess behind the wheel of a race car, you are eligible to write off your auto racing expenses as a tax deduction.

Tax deductions for race car drivers may include:

  • Depreciation on a race car, computer for tracking speed, race track, etc.
  • Fuel
  • Car supplies, i.e. tires, replacement parts, etc.
  • Other supplies, i.e. pens, paper, notebooks, etc.
  • Transportation to racing events and promotional appearances (either mileage or actual expenses)
  • Meals, lodging, and entertainment related to racing events
  • Casualty losses from a crash in a race
  • Merchandise you sell to promote your brand, i.e. t-shirts, bumper stickers, hats, flags, etc.
  • Marketing expenses
  • Professional fees for accountants, attorneys, racing consultants, etc.

Document all of your expenses – and save receipts.

As a race car driver, you’ll likely be on the hook for numerous expenses since the field of racing is certainly no cheap endeavor. So make an effort to carefully document all of your expenses. Save receipts, and consider scanning them onto your computer for convenience when you need to access them in the future. Use a mileage log to track your transportation expenses. It’s especially important to document all of this financial information if you’re trying to show the IRS that your racing activities are a business rather than a hobby.

Consider establishing a formal business entity.

If you’ve pursued racing as a hobby, but you’re now focusing on it as your primary profession, it’s wise to consider creating an LLC or corporation for your trade. Establishing a legal business entity can increase your credibility as a reputable race car driver. In terms of IRS taxes, it can help you reduce your tax liability through tax strategies available to formal business owners rather than those who work as sole proprietors. From tax deductions to tax credits, you’ll be glad you decided to add “LLC” or “Inc.” to your business card.

To learn about more tax tips for race car drivers and those in any profession, turn to the accountants at 1-800Accountant. Call 1-800-222-6868 or click over to www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.

6 Things Every New Startup Needs to Succeed

Opening the doors to a shiny new startup venture requires a great deal of resources. You can’t just go to your favorite department store and buy a business off the shelf. It takes time, money, and support to achieve startup success. Fortunately, by knowing what you need to surround yourself with, the startup puzzle can be much less stressful to figure out where to fit all the pieces. Consider these things that every new startup needs to enjoy a prosperous future:

1. An in-depth business plan

In order for an entrepreneur to discover long-term startup success, he or she must have a solid, in-depth business plan on paper. This written plan of action should consist of the following sections

  • Basic company profile
  • Detailed description of company
  • Overview of industry, competition, & market
  • Detailed description of products/services
  • Marketing plan
  • Financial plan
  • References/appendix

2. An accountant

Startups often fail because they are not built on solid financial ground. To help you ensure your finances are in order and you’re fulfilling your additional IRS business tax requirements, it’s critical to work with an accountant. Ideally, your accountant should specialize in business taxes – and should have experience working with other small business owners in your specific industry. With the 70,000-page federal tax code, additional business filing requirements at play, and the availability of numerous tax breaks exclusively for startups, you don’t want to jeopardize your business by trying to handle your own small business accounting.

3. Legal support

In addition to accounting support for your IRS business taxes, you should have legal council on your side as well. Consider contacting an attorney to review all of your business paperwork and important documents. There are many laws at the local, state, and federal levels that apply to startups. Don’t get caught red-handed. Consult with an attorney to ensure you follow the rules of small business ownership. Plus, if you get sued for any reason, you’ll need legal support to get through such a case.

4. Adaptable and flexible owner(s)

The term startup is used to describe a variety of businesses. But the cornerstone of a startup is that it typically tries innovative strategies and can change on a dime. This flexibility is something owners of startups should possess. You may lay out a detailed business plan, but a good portion of this roadmap will likely change over time. So don’t be stuck on certain ideas if they aren’t providing results. Be adaptable so that you can manage to get over the hurdles.

5. Funding already in hand

Making money with a new startup takes time. You have to be patient in order to establish your business as an authority. With that said, it’s a must to have startup funding already in your bank account. This means having capital you can use to get off the ground – and to help maintain your enterprise in the initial stages before you start generating revenue. Consider using personal funding, a loan, or even crowdfunding.

6. Technology, including a cloud platform

Technology has advanced nearly every industry under the sun. These days, successful startups take full advantage of technology, including convenient cloud computing. Small business owners who use cloud systems to store files that they can access anywhere from any device have a big edge over others. From documents to spreadsheets to presentations, it’s so easy to put files in the cloud so you have them whenever you need them. (Learn more about how the cloud works here.) In addition, startups should have a website, pages on social media, and listings in online business directories. Security should be accounted for here as well, so invest in reliable servers, antivirus and antispyware software, and other solutions to keep your startup safe from the many unscrupulous individuals out there.

Learn what else your startup needs by checking out this SingleHop article. For all of your small business and startup accounting needs, turn to 1-800Accountant by calling 1-800-222-6868 or by visiting www.1800accountant.com.

It’s Time for Spring Cleaning…of Your Finances

dollar signsMost people think spring cleaning is all about getting your house clean, tidy, and in order during the springtime when the weather is starting to feel a little more comfortable outside. However, you certainly shouldn’t overlook your finances.

Check out these spring cleaning tips for your finances:

– Update your budget.

If you don’t have a personal budget that you use to make sure you’re spending money wisely, it is time to create one. If you have one, it’s time to update it. Make a list – or spreadsheet – of all regular expenses you have. Then make a note of any money you spend on dinners, movies, new clothes, or other things that aren’t exactly necessary. Determine if you can cut out any of these costs. Or, you might be able to spend money on less expensive goods and services that are just as beneficial as their pricey counterparts. It’s all about examining the reality of your finances and seeing how you can improve on them.

– Organize your paper files – and shred unnecessary records.

Take some time this spring to organize your paper documents. These could be receipts, invoices, tax returns, bank statements, and any other relevant documents you’ve been saving. Put them in appropriate file folders for easy access. Shred any paperwork you no longer need as well. It’s tough to part ways with certain documents. But if you know for sure that you don’t need to keep something, get rid of it.

– Digitize financial records.

A great way to maintain records without letting them pile up in the corner of your home office is to digitize important records. Scan them into your computer. You could even use a backup solution or cloud service to make them accessible anywhere on your smartphone or tablet. Just remember to keep them organized on your computer so you can find them easily when you need them.

– Review and consolidate bank or retirement accounts.

Some people will set up multiple bank accounts and even retirement accounts like IRAs. In certain situations, this may be necessary. But if you have several accounts with varying amounts tucked away in them, why not consolidate them all into one or two accounts? It’ll make your life a lot easier, and it’ll reduce your paperwork. Plus, having just a single account will mean only one password to remember for online access. In addition, consider looking into accounts that will make you more money over time via interest.

– Review your tax situation and look for new tax-saving opportunities.

Taxes play a big role in how much money we keep and, unfortunately, how much we must fork out to Uncle Sam each year. But if you have a good handle on your taxes, you can reduce your tax bill. Explore new potential tax deductions or tax credits. Consider any recent life changes that may qualify you for such tax-saving measures. You could save thousands of dollars through completely legitimate tax breaks. It’s all about understanding and navigating the complex federal tax code, which is much easier to do with the help of an accountant.

For more finance and tax tips on how to stay organized and keep as much of your money as you can, turn to the accounting professionals at 1-800Accountant today. Call 1-800-222-6868 or check out www.1800accountant.com.

Image credit: The image included in this blog post is used with permission via the Flickr Creative Commons license.