Protecting Your Finances From False IRS Scams

Right after tax season is a popular time for IRS scams. Scammers take advantage of the obligation citizens have to file taxes and pretend to be the IRS to garner your financial information. Here are the practices scammers use in 2018 and how to protect your finances from IRS scams.

Phone Calls

The most popular way IRS scams work is you get a call without warning from a person insisting you owe money to the IRS. Often, they will have a lot of your information on hand, which makes them seem credible. The people on the other end of these scam calls make it seem your repayment of the debt is urgent, which is how you can be assured that it is safe to hang up.

They also expect the debt owed to the IRS to be paid back in gift cards and want you to read the number over the phone. Sometimes they request you give them your social security number or bank account number. NEVER reveal sensitive financial information over the phone to someone who has called you. Be skeptical and hang up, even if the person on the other side uses threats.

Online

Another way IRS scams can get you is on the internet. Elderly often fall victim to online IRS scams because they are not as comfortable navigating the web. Scammers will often phish for your financial information through emails. NEVER click on a link in an email from someone you do not know. In fact, do not even open an email that looks a little suspicious.

If you feel the message might be legitimate, contact your financial institution using information from another source, not the contact information provided by the message. And, of course, avoid visiting suspicious websites. Look for the padlock next to the URL address bar to confirm the website you are on is secure and safe. Websites that are secured will also have “https” in their URL instead of just “http”.


Learn what to do if you do fall victim to an IRS scam here. With more knowledge, we can work together to stop IRS scams all together!

Getting Organized for Tax Season

With tax season fast approaching, it’s always a good idea to get your tax-related affairs in order.

Although everyone’s taxes are different, a well-organized tax filing can save you time, stress, and maybe even money.

South Metro Federal Credit Union wants to help you turn the chaos of tax season into a well-organized, accurate return.

Gather Your Documents

While a well-organized filing system is difficult for many of us to come by, spending the extra time to hunt down your tax documents will provide a good foundation for maximizing your returns or mitigating your payments. Below are examples of tax-deductible documents you may have overlooked:

• Certificate of rent paid
• Education tax credits 
• Receipts for job-related expenses
• Medical expenses in excess of 10% of income
• Casualty and theft losses in excess of 10% income 
• Mortgage and investment interest 
• State and local property and income or sales tax
• Documented charitable donations
• Mileage reports from qualified business, medical, or charitable purposes
• Small business expenses

Personal Information

The IRS requires every taxpayer to use their documented social security number. Make sure you have these numbers for everyone that you plan on including in your filing, or contact the IRS for missing social security numbers in advance. A Missing social security number can cause major delays in your filing, so follow this link to find one that’s missing. You’ll need a birth certificate and a state-issued ID, so make sure you have those handy when contacting your local social security office.

Reportable Income

Your employer is likely to send out a W2 via mail or deliver one in person at work. If you have a feeling that they have it ready and want to get a head start on filing, contact the person in charge of human resources and they should be able to get it to you easily. You should receive your W2 by January 31st.

Independent contractors and other self employed individuals will use a different form to report income. Here are the documents you’ll need to report based on your employment type:

• Reporting as an Independent Contractor
• Reporting as Self Employed

Assets to Report

Income taxes aren’t the only thing you’ll need to file with the IRS for taxes. Be sure to get your statements or official documents from the account holders of your assets. What qualifies as an asset for filing? Here are some common examples:

• Stocks or bonds 
• Loans with low or no interest
• Purchase of a business 
• Real property 
• Business assets 
• Intangible assets 

These can get confusing, but everything is organized and well-defined on the IRS website. See Publication 551 or Topic No. 703 for more information on assets.

Itemized Deductions

As mentioned previously, holding on to documents containing tax-deductible information is extremely important in getting the most out of your return, or minimizing your payment. For further information on itemized deductions, see a tax professional. In 2018, your itemized deductions will change with the new tax reform bill, so here’s a good resource to stay up to date with the changed policy.

Organize Your Paperwork

After you’ve gathered and assembled all of your documents, it’s time to get organized. Manila envelopes, paper clips, and sticky notes will be a helping hand with this step.

Sort your documents in piles labeled Shred, Scan, or Store.

Shred:

• Junk mail
• Receipts for unwarranted purchases or taxes 
• Monthly bank investment statements 
• Employer pay stubs 
• Paid off loan contracts 
• Records for unowned cars or previous homes 
• Membership documents within 6 months of ending the contract 
• Expired warranties 

Scan:

• Tax returns 
• Tax documents 
• Annual investment statements 
• Pension documents 
• Social security statements 

Store:

• Car title until it’s sold 
• Estate Documents 

Sit Back and Relax

Good things come to those who wait, but if you’ve filed your taxes early using all the necessary documents, you may not be waiting for long. We hope you’ve enjoyed these organization tips for tax season and have a well-organized place to store your paperwork for the next tax season.

For all this info and more, download our handy infographic:



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How to Regroup from Holiday Debt

Another holiday season has begun, and you have some bad news. As you look at your finances and think about how much you have been and will be spending in the next few weeks, you may be wondering, “How can I regroup from holiday debt?”

Review these top tips to regroup from holiday debt and prepare for the upcoming year.

1. Create a Yearly Budget and Stick to it

One of the top ways to regroup from debt is to make a budget. Review each of your accounts. Determine where to decrease monthly expenses and use that money towards paying off your holiday debt.

2. Find a Seasonal or Part-time Job

If you have the ability and time, find a seasonal job to work during the evenings and/or weekends. It won’t be fun to work the hours, but depending on the amount of debt, it may only be for a few months. Use that extra, hard-earned cash towards your debt.

3. Make Your Own Starbucks at Home

Although everyone loves a good Starbucks coffee, it can be quite draining on the wallet. Instead of purchasing your daily $5 Starbucks beverage, make your coffee at home and save that money. That $5 will quickly add up to be applied towards your holiday debt.

4. Use Your Tax Return and Holiday Bonus

Instead of taking that big vacation, use your tax return and holiday bonus to pay off your holiday debt. Once it’s paid off, you can then easily save your money to take a paid vacation in the future.

5. Look Into a Personal Loan

Most credit cards have a high-interest rate which means spending even more money due to that interest. Look into acquiring a personal loan with a lower interest rate through South Metro Federal Credit Union. You can then apply that money to pay off your high rate credit card(s) and save money in the long-term.

6. Transfer to a Low-rate Credit Card

Similar to a personal loan, you can also transfer your high interest rate balance to a low-rate credit card. Although not many banks may offer a low-rate credit card, South Metro Federal Credit Union does. If you go this route, ensure you budget paying off the low-rate card as soon as possible.


These tops tips can help you regroup from holiday debt. As part of the first tip, ensure you create a budget for upcoming holidays to help prevent seasonal debt in the future. Check out South Metro Financial Education Services and South Metro’s Budgeting Tools that provide services and education to achieve personal and financial goals and improve your quality of life.