Robert J. Kratz & Co.

New Security Measures Help Protect Against Tax-Related Identity Theft: As part of the Security Summit eort, the Internal Revenue Service announced Wednesday, December 2, that starting in January the Identity Protection PIN Opt-In Program will be expanded to all taxpayers who can properly verify their identities. The Summit partners, including state tax agencies, the nation’s tax industry and the IRS, marked the third day of the National Tax Security Awareness Week by urging taxpayers who want the proactive protection against identity theft to opt into the Identity Protection PIN program in 2021. Learn more: https://robertjkratz.com/new-security-measures-help-protec/

As we wrap up 2020, year-end tax planning has never been more crucial. This year brought challenges and disruptions that significantly impacted your personal and financial situations COVID-19, economic relief measures, new tax laws and political shifts. Now is the time to take a closer look at your current tax strategies to make sure they are still meeting your needs and take any last-minute steps that could save you money. We’re here to help you take a fresh look at the he...alth of your tax and financial well-being. Please contact us at your earliest convenience to discuss your tax situation so we can develop a customized plan. In the meantime, here’s a look at some issues to consider as we approach year-end. Key tax considerations related to COVID-19 Many tax provisions were implemented under the Coronavirus Aid, Relief and Economic Security (CARES) Act aimed to help individuals and businesses deal with the COVID-19 pandemic and its ongoing economic disruption. Economic impact payment (EIP) Eligible individuals received a payment of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child, with payments phased out based on adjusted gross income. The payments are treated as advance refunds of a 2020 tax credit. If you received an EIP, you should have received IRS Notice 1444, Your Economic Impact Payment. Keep this for record-keeping purposes. Charitable deductions Unique to 2020, individuals who do not itemize their deductions can take an above-the-line charitable deduction of up to $300. Such contributions must be made in cash and made to qualified organizations. Retirement accounts You can take up to $100,000 in coronavirus-related distributions from retirement plans through the end of the year without being subject to the 10% additional tax for early distributions. Additionally, required minimum distributions (RMDs) are temporarily suspended for 2020. If your retirement assets have taken a hit, not having to take an RMD may allow those assets to recover some value before you liquidate them.

You may have started your business as a simple sole proprietorship that files its taxes as a Schedule C on your Form 1040. As your business grows, you may want to change the structure. Here are several scenarios where it may make sense to do just that.https://robertjkratz.com/should-you-incorporate-your-busin/

As an owner of a small business, you’ve proven that you’re a self-starter by operating a successful private enterprise. Of equal importance is applying your skills towards saving for your future. Here are some of the most popular tax-advantaged retirement vehicles for small business owners in 2020 and some tips on saving for retirement.https://robertjkratz.com/retirement-savings-tips-for-small/

The Social Security Administration recently announced its 2021 cost of living adjustments. More wages will be taxed and retirement checks will go up. Estimated average Social Security retirement benefits starting January 2021 All retired workers in 2020 $1,523/mo All retired workers in 2021 $1,543/mo

Helping People: IRS Taxpayer Relief Initiatives The IRS is highlighting reasonable cause assistance available through IRS procedures for failure to file, failure to pay and failure to deposit penalties. First time abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties. For individual taxpayers receiving notices (letters about a tax bill) with tax liabilities up to $250,000 for Tax Year 2019 only, the IRS can offer... one Installment Agreement opportunity with no lien filed. The IRS is extending the short-term payment plan timeframe to 180 days (normally 120 days). The IRS is easing paperwork requirements to allow individuals more flexibility to get non-streamlined Installment Agreements up to $250,000 without financial verification, if their case is not yet assigned to a revenue officer. Extend guidance to automatically include new tax year balances accrued in existing Installment Agreements. (Individuals and Out of Business entities only) The IRS will provide relief for taxpayers having difficulty meeting the terms of previously accepted offers.

Great Tips for Improving Your Credit Score: Rule 3 Build a long history of using credit responsibly (15%). Lenders want to see a track record that you can handle being entrusted with a credit limit. If you have old credit accounts that are still open and in good standing, that signals your trustworthiness, which is reflected in a higher credit score. Action: When you open a credit account, keep it active for as long as possible. If you stop using an account, consider leaving that account open, but only if it will help your score and not hurt you in obtaining new credit.

Great Tips for Improving Your Credit Score: Rule 2 Refrain from maxing out your credit (30%). Just because you have a $10,000 credit limit doesn’t mean you should use it all. Using close to or all of your credit limit signals to lenders that you may be a high-risk borrower. Insurance companies also love to use high-limit spending as a reason to increase your home and auto insurance, so be forewarned! Action: Don’t use more than 25% of your available revolving credit, and pay the outstanding credit card balance in full each month.

The IRS recently announced its 2020 edition of its annual Dirty Dozen list of tax scams with a special emphasis on aggressive and evolving schemes related to COVID-19 tax relief, including Economic Impact Payments. Here is one of the more common scams. Social media scams. A scammer will use social media platforms such as Facebook and Twitter to obtain personal information from you, then use that information to trick you into providing them with confidential information. For example, the scammer could impersonate a family member, friend or co-worker in an attempt to obtain financial information. What you can do. Be careful of publishing confidential information on social media. Verify the identity of any person or organization that asks you for confidential information. https://www.irs.gov//irs-wrapped-up-the-dirty-dozen-list-o

Great Tips to Improve Your Credit Score: Rule 1 Pay your bills on time (Comprises 35% of your credit score equation). Payment history is the most important component of your credit score and is pretty straightforward it’s a record of whether or not you’ve paid your bills on time. Action: Don't be late paying your bills! A one-time late payment may not affect your score, but multiple late payments will drag down your score. Even better, understand what vendors report your payment history and which ones do not.

Don’t be fooled by Coronavirus-related scams The email seemed to come from the Centers for Disease Control and Prevention (CDC), encouraging you to click a link to sign up for notices about coronavirus tests available in your community and make a credit card donation to support research to find a cure. It seemed like a real message from the CDC. https://www.360financialliteracy.org//Don-t-be-fooled-by-C

The COVID-19 pandemic, superstorms like Sandy, Irene and Katrina, and a seemingly endless onslaught of floods, wildfires and tornadoes have dramatized the destruction that can come upon us from unexpected events with little or no warning. You can’t predict the next disaster that will affect your life, but the right preparation can help you mitigate the impact and help you rebuild and move forward. Here are 5 key steps you can take now to protect your family and finances. https://www.360financialliteracy.org//Disaster-Action-Plan

Damage Control for Identity Theft Victims https://www.360financialliteracy.org//Damage-Control-for-I You receive a call from your credit card company inquiring about a large purchase in progress using your account that you know nothing about. Or perhaps you get a bill from a debt collector relating to an account that you didn’t open. These are some of the ways that people learn they have been the victims of identity theft. If it happens to you, it’s important to act quickly. Here are some of the steps you should take.

What's my net worth? Here is a calculator from AICPA https://www.360financialliteracy.org/Calculators/Net-Worth

The American Institute of CPAs and its business and technology arm, CPA.com, have begun an early-phase rollout of .cpa, a restricted Internet domain that allows CPAs to connect with clients and the general public with greater trust, security and verification. https://www.aicpa.org//aicpa-and-cpa-launch-exclusive-cpa-

The IRS suggests these points when selecting a cybersecurity expert to protect your company and client data: 1. Ask other business owners who they have hired for cybersecurity 2. Select someone you feel you can trust.3. Trust someone experienced in cybersecurity.