For the Month of March 2008 --- Vol. 3, Issue 3
IN THIS ISSUE...
WE'RE IN THE THICK OF IT NOW! That's right... we're smack dab in the middle of tax season. And while many of us may be overwhelmed and looking for help, you need to make sure you don't fall victim to "phishing" traps during this confusing time of year. The tax "phishing" article below explains how criminals who want your personal information use tax season to prey on unsuspecting individuals.
Speaking of taxes... you've probably heard a lot about the tax rebates in the new Economic Stimulus Plan. But you may not know how much to expect--or what you should do with the money once it comes in. The tax rebate article below can help you plan ahead to make a smart decision!
As always, please pass this information along to friends, family members, and coworkers. These are important issues and the tips below might make a huge impact and help out someone you know. So pass it along! And call or email me with any questions.
THE TAXMAN... AND SCAM ARTISTS... COMETH!
Along with the taxman comes an inevitable new breed of scam artists. That's why you need to be on guard--especially for unscrupulous scammers, who are sending emails that appear to be from the IRS. The content of the emails are often written to persuade you to link to a website that will allow you to update your data or receive important information.
Remember, these phony emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, to offer a larger refund, or sometimes, ironically, to protect you from identity theft or loss of privacy.
What Can You Do to Avoid Falling Prey To One Of These Scams?
Always Be Suspicious of Emails. Remember, the IRS does NOT initiate communication with taxpayers through email, but rather through the regular mail. If you receive an email that says it's from the IRS, you should immediately be suspicious and should forward it in its entirety to the IRS, so that they can take steps to shut down the fraudulent and bogus websites. The IRS requests that you forward all questionable emails to email@example.com.
Double Check the URL Address. Keep in mind that all IRS websites begin with the following web address: http://www.irs.gov/. So, if you ever click a link in an email or visit a website that you believe is related to the IRS, the first thing you should do is confirm the website begins with the correct URL address. Remember, sometimes it may "look" legitimate, but is actually an imposter site that is "phishing" for information. So always, always double check the actual URL address before you type any information in the site.
Exercise Extreme Caution with Attachments. When it comes to questionable emails, the best practice is to never open any attachments. That's because attachments are an extremely common method that hackers use to infect your computer with programs that may harm your computer or steal your personal information--often without you even knowing!
In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will rarely, if ever, ask you to divulge personal information via email.
If you receive any email asking for personal information of any kind, you should immediately be suspicious. When in doubt, call the customer service lines listed on your statements or documents and discuss the email that you received.
TAX REBATES: SHOULD YOU SAVE OR SPEND?
The government's Economic Stimulus Plan has been in the news a lot lately, and the $168 Billion package is intended to jumpstart the economy by distributing tax rebates that should be arriving in your mailbox as early as spring. The question is: what should you do with your rebate check? The info below can help you estimate how much you'll receive, consider your options, and start planning now so you're prepared.
HOW MUCH MONEY WILL YOU RECEIVE?
The amount you receive ultimately depends on how much you make. For instance, individuals with adjusted gross incomes up to $75,000 will receive a rebate check of $600. If you're married filing jointly and earn up to $150,000, you can expect to receive $1,200. Those who earn at least $3,000 but don't pay taxes will receive about half as much--$300 for individuals or $600 for married couples filing jointly.
If you make more than $75,000 as an individual or $150,000 as a married couple, your rebate check starts to shrink. That doesn't mean you're out of luck... most high-income taxpayers will still receive a check. But you can plan on receiving $50 LESS for every $1,000 you earn over those limits.
Finally, if you have children, you can expect to receive a $300 credit for each child.
SO...WHAT SHOULD YOU DO WITH YOUR REBATE?
Do Nothing...At Least for Now--Don't start mentally spending those dollars just yet. At the minimum, you should hold off until you file your 2007 tax return. That's because the gross income listed on your 2007 return will actually determine how much you'll receive. And unless you absolutely need to, try not to spend the money at all until you have it in hand. Too often, we make purchases on the credit card or with money from savings with the intention of paying it back...only to have some other expense come up in the meantime. To avoid falling into this trap, make a commitment to yourself to wait for the check to arrive before you spend it.
Don't Overspend--Regardless of how much you receive, make a budget and stick to it. We all know how easy it is to go to the store with a specific amount in mind, only to walk out over budget. In this case, not only could you end up spending your entire rebate check, but may actually come out negative by spending additional money that could be budgeted for your regular bills.
Consider NOT Spending At All--The government is issuing these tax rebates with the hope that Americans will help bolster the economy by spending it. However, "spending" isn't always the best plan. If you have high-interest credit cards or other loans, use the rebate to help pay down the debt...and get out from underneath those payments sooner! If your debt load isn't very high, consider saving the rebate check in an interest-bearing account, funding or starting a college savings plan, or even putting the money in a retirement account that will earn you more and more money as time goes on.
The Economic Stimulus Plan features a number of benefits you may not be aware of. In addition to rebate checks, it includes new conforming loan limits that may allow you to refinance and save money every month, or purchase a home more affordably. If you have any questions about your overall financial picture and how you can make the most of this opportunity, please call today. Remember... a little planning goes a long way!
The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today!
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