News & Tech Tips

That email or text from the IRS: It’s a scam!

“Thousands of people have lost millions of dollars and their personal information to tax scams,” according to the IRS. The scams may come in through email, text messages, telephone calls, or regular mail. Criminals regularly target both individuals and businesses and often prey on the elderly.

Important: The IRS will never contact you by email, text, or social media channels about a tax bill or refund. Most IRS contacts are first made through regular mail. So if you get a text message saying it’s the IRS and asking for your Social Security number, it’s someone trying to steal your identity and rob you. Remember that the IRS already has your Social Security number.

“Scammers are coming up with new ways all the time to try to steal information from taxpayers,” said IRS Commissioner Danny Werfel. “People should be wary and avoid sharing sensitive personal data over the phone, email, or social media to avoid getting caught up in these scams.”

Here are some of the crimes the IRS has identified in recent months:

Email messages and texts that infect recipients’ computers and phones. In this scam, a phony email claims to come from the IRS. The subject line of the email often states that the message is a notice of underreported income or a refund. There may be an attachment or a link to a bogus web page with your “tax statement.” When you open the attachment or click on the link, a Trojan horse virus is downloaded to your computer.

The trojan horse is an example of malicious code (also known as malware) that can take over your computer’s hard drive, giving someone remote access to the computer. It may also look for passwords and other information. The scammer will then use whatever information is gathered to commit identity theft, gain access to bank accounts, and more.

Phishing and spear phishing messages. Emails or text messages that are designed to get users to provide personal information are called phishing. Spear phishing is a tailored phishing attempt sent to a specific organization or business department.

For example, one spear phishing scam targets employees who work in payroll departments. These employees might get an email that looks like it comes from an official source, such as the company CEO, requesting W-2 forms for all employees. The payroll employees might erroneously reply with these documents, which then provide criminals with personal information about the staff that can be used to commit fraud.

The IRS recommends using a two-person review process if you receive a request for W-2s. In addition, employers should require any requests for payroll to be submitted through an official process, like the employer’s human resources portal.

Scams keep evolving

These are only a few examples of the types of tax scams circulating. Be on guard for any suspicious messages. Don’t open attachments or click on links. Contact us if you get an email about a tax return we prepared. You can also report suspicious emails that claim to come from the IRS at phishing@irs.gov. Those who believe they may already be victims of identity theft should find out what to do by going to the Federal Trade Commission’s website, OnGuardOnLine.gov.

© 2023

Navigating Tax Compliance for Remote Workers

The rise of remote work has created new challenges for businesses when it comes to tax compliance. With employees working from all over the world, it can be difficult to keep track of where they are working and what taxes they owe.

In this article, we will discuss the nuances of tax compliance for remote workers and provide tips for ensuring your remote workforce stays tax compliant.

  1. Understand the tax implications of remote work

The first step to ensuring tax compliance for remote workers is to understand the tax implications of remote work. This includes understanding the different tax laws that apply to remote workers, as well as the different ways that remote workers can be taxed.

For example, in the United States, remote workers are typically taxed based on their state of residence. However, there are some exceptions to this rule, such as if the remote worker spends a certain amount of time working in another state.

  1. Establish clear policies and procedures

Once you understand the tax implications of remote work, you need to establish clear policies and procedures for your remote workforce. These policies and procedures should outline how you will track the location of your remote workers, how you will determine their tax liability, and how you will determine their tax liability and remittance.

  1. Stay up-to-date on tax laws

The tax laws that apply to remote workers are constantly changing. It is important to stay up-to-date on these changes so that you can ensure that your remote workforce is always tax compliant.

There are a number of resources that you can use to stay up-to-date on tax laws, such as the IRS website, the website of your state’s tax department, or by consulting your Whalen CPA advisor.

  1. Use a tax compliance software

There are a number of tax compliance software programs that can help you to manage the tax liability of your remote workforce. These software programs can help you to track the location of your remote workers, determine their tax liability, and collect and remit taxes.

Using a tax compliance software program can help to simplify the process of tax compliance for remote workers and help you to avoid costly mistakes.

  1. Work with a tax professional

If you are unsure about the tax implications of remote work or if you need help establishing clear policies and procedures, you should work with a Whalen tax professional. A tax professional from Whalen can help you to understand the tax laws that apply to remote workers and help you to develop a tax compliance plan for your remote workforce.

 

Navigating tax compliance for remote workers can be complex. However, by following the tips in this article, you can ensure that your remote workforce stays tax compliant.

By understanding the tax implications of remote work, establishing clear policies and procedures, staying up-to-date on tax laws, and working with a tax professional, you can simplify the process of tax compliance for remote workers and help avoid costly mistakes. Contact us to take the next step.

Strategies for Business Growth and Expansion

Growing your business is a challenging but rewarding endeavor. It takes hard work, dedication, and a clear plan. If you’re ready to take your business to the next level, here are some proven strategies for growth and expansion:

  1. Define your goals. What do you want to achieve with your business? Do you want to increase sales, expand into new markets, or launch new products or services? Once you know your goals, you can develop a plan to achieve them.
  2. Understand your target market. Who are your ideal customers? What are their needs and wants? Once you understand your target market, you can tailor your products or services to meet their needs.
  3. Market your business effectively. Get the word out about your business and your products or services. Use a variety of marketing channels, such as online marketing, social media, and traditional advertising.
  4. Provide excellent customer service. Make sure your customers are happy and satisfied with your products or services. This will help you build loyalty and encourage repeat business.
  5. Invest in your business. Invest in your business by upgrading your equipment, hiring new employees, or expanding into new markets. This will help you grow your business and reach new heights.

In addition to these general strategies, there are a number of specific business development strategies that you can use. Here are a few examples:

  • Market penetration: This strategy involves increasing your market share in your existing market. You can do this by increasing your marketing efforts, expanding your distribution channels, or offering new products or services.
  • Market development: This strategy involves expanding into new markets. You can do this by entering new geographic areas, targeting new customer segments, or selling your products or services online.
  • Product development: This strategy involves developing new products or services. You can do this by expanding your product line, offering new features or benefits, or creating new products or services that meet the needs of new customer segments.
  • Diversification: This strategy involves expanding into new lines of business. You can do this by acquiring new businesses, starting new businesses, or entering into joint ventures.

The best growth and expansion strategy for your business will depend on your specific situation. However, by following the strategies outlined above, you can increase your chances of success.

Regardless of the strategies you deploy, we highly encourage you to:

  • Be patient. Growing your business takes time and effort. Don’t get discouraged if you don’t see results immediately.
  • Be flexible. Things change, so be prepared to adapt your plans as needed.
  • Be persistent. Don’t give up on your dreams. Keep working hard, and you will eventually achieve your goals

Accounting Best Practices for Startups

Starting a business is an exciting adventure, but it’s also a lot of work. One of the most important things you can do to set your startup up for success is to establish sound financial management practices. This will help you track your income and expenses, make informed financial decisions, and grow your business sustainably.

Here are some accounting best practices for startups:
  1. Use accounting software. This will make it easy to track your finances from anywhere, and it will also help you to stay organized. Many different accounting software options are available, including cloud-based ones, so you can choose one that fits your needs and budget. Need a recommendation? We recommend looking into our favorite one, QuickBooks.
  2. Set up a separate bank account for your business. This will help you to keep your personal and business finances separate, which is important for tax purposes. It will also make it easier to track your business expenses.
  3. Track your income and expenses. This is essential for understanding your financial health and making informed financial decisions. You should track your income and expenses on a regular basis, and you should keep all of your receipts.
  4. Create a budget. A budget will help you to track your spending and make sure that you are not overspending. There are many different budgeting methods available, so you can choose one that works for you.
  5. Get regular financial advice. Connect with your Whalen advisor; they can help you stay compliant and provide you with essential business planning.
  6. Pay attention to cash flow. This is the lifeblood of your business, so it’s important to make sure that you have enough cash on hand to cover your expenses.
  7. Don’t be afraid to ask for help. There are many resources available to help startups with financial management.

Following these accounting best practices will help you to establish sound financial management practices for your startup. This will give you the foundation you need to grow your business sustainably and achieve your financial goals. Don’t be afraid to reach out for help if you need it. Contact Us!

Are you married and not earning compensation? You may be able to put money in an IRA

When one spouse in a married couple not earning compensation, the couple may not be able to save as much as they need for a comfortable retirement. In general, an IRA contribution is allowed only if a taxpayer earns compensation. However, there’s an exception involving a “spousal” IRA. It allows contributions to be made for a spouse who is out of work or who stays home to care for children, elderly parents, or for other reasons, as long as the couple files a joint tax return.
For 2023, the amount that an eligible married couple can contribute to an IRA for a nonworking spouse is $6,500, which is the same limit that applies for the working spouse.

Benefits of an IRA

As you may know, IRAs offer two advantages for taxpayers who make contributions to them:

  • Contributions of up to $6,500 a year to a traditional IRA may be tax deductible, and
  • The earnings on funds within the IRA aren’t taxed until withdrawn. (Alternatively, you may make contributions to a Roth IRA. There’s no deduction for Roth IRA contributions, but, if certain requirements are met, future distributions are tax-free.)

As long as a married couple has a combined earned income of at least $13,000, $6,500 can be contributed to an IRA for each spouse, for a total of $13,000. (The contributions for both spouses can be made to either a regular IRA or a Roth IRA, or split between them, as long as the combined contributions don’t exceed the $13,000 limit.)

Higher contribution if 50 or older

In addition, individuals who are age 50 or older can make “catch-up” contributions to an IRA or Roth IRA in the amount of $1,000. Therefore, for 2023, a taxpayer and his or her spouse, who have both reached age 50 by the end of the year can each make a deductible contribution to an IRA of up to $7,500, for a combined deductible limit of $15,000.

However, there are some limitations. If, in 2023, the working spouse is an active participant in one of several types of retirement plans, a deductible contribution of up to $6,500 (or $7,500 for a spouse who will be 50 by the end of the year) can be made to the IRA of the nonparticipant spouse only if the couple’s AGI doesn’t exceed a certain threshold. This limit is phased out for AGI between $218,000 and $228,000.

If you’d like more information about IRAs or want to discuss retirement planning, contact us.

© 2023