5 2016 Security Precautions for Taxpayers

padlock on a rusty lockIf you’ve read our previous blog posts on phishing scams, malware, and IRS fraud, you know the importance of financial security, particularly during the tax season. Without fail, scams spike during tax season as criminals invent new and ingenious ways to take advantage of the insecurity and stress that often accompany the months before April 15.

According to the Better Business Bureau Scam Tracker, tax scams ranked at the top nationally, accounting for more than 2,000 reports of the 10,000 total scams. Additionally, the IRS says that consumers have lost more than $23 million over the past three years to impostors posing as federal agents tricking victims into making false tax payments.

Don’t let this happen to you. Here are a few of the security precautions that taxpayers and tax preparers can take before the April 15, 2016 filing deadline. Whether it’s a blatant scam or a technological invasion, it’s worth taking a few minutes in advance to save yourself hours (and dollars) worth of future headaches.

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How Does Use Tax Affect You?

nail polish in a salonUse tax is an important complement to sales tax that can be significant for many business owners and consumers. In the state of Nebraska, use tax is sometimes referred to as consumer’s use tax, or a tax paid by the consumer. In other words, Nebraska law requires that if sales tax is not collected by the seller on any taxable sale, the purchaser must remit that tax directly to the state.

Take, for example, a beautician with products available to sell to her customers. Her shop is filled with rows of shampoo, conditioner, makeup, nail polish, and other beauty products. However, the beautician needs to use some of those shampoos when giving a haircut to Mrs. Nelson, and regularly uses other products that she sells on the racks in the course of providing her services, an important caveat.

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What Is Nexus? Common Errors In Sales Tax Reporting

old cash register buttonsAs a business owner, sales tax reporting can be tricky. There are constant changes to sales tax laws, the penalties for failing to collect and remit proper sales tax are steep, and consequences can add up quickly. Especially if you’ve been acting according to improper information or an outdated law, it can seem insurmountable to determine which direction to move in.

Here are a just a few of the common issues we see in sales tax reporting. Many of these derive from failing to stay up-to-date on how laws change from state to state or from year to year. The latest information is essential when acting according to the law.

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How to Gather Your Documents for Tax Season

8265067727_7eda0e7457_bThe 2015 tax season is upon us, and it’s time to begin preparing your returns!


The real key to making your tax season go smoothly is preparation. Whether you’re working with a tax advisor or not, well-organized records are the key to success. Keeping your documentation organized will also reduce stress if your return is selected for an audit. Another aspect of preparedness is keeping an electronic set of records, because emergencies can happen any time, anywhere. Duplicate records kept in a different location from the other set, or scanning paper records into an electronic format will prevent the panic that could occur in the event of an emergency. You’ll know that your records are protected.

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File Your Returns On Time – IRS Delinquency Penalties 101

money into an envelopeIRS Delinquency Penalties

Simply filing your tax returns on time can go a long way toward keeping you out of trouble with the IRS.  The most common IRS penalties most people encounter are delinquency penalties. These penalties are usually the result of either not filing a return or not making a payment by the due date.

Not filing a tax return on time

For individuals and corporations, the heaviest penalty surfaces when a return is not filed on time. This penalty is based on 5% of the tax due for each month the return is late. The penalty maxes out after 5 months at 25% of the balance due.  That can greatly increase your tax bill.

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How Fantasy Sports Are Taxed

pittsburgh steelers and houston texans tacklingWin big with your Fantasy Sports team? Uncle Sam wants his share.

We’ve all seen the commercials. You could win thousands—or millions—of dollars. It’s easy! All you have to do is play fantasy sports.

With the rise in online fantasy sites, of which the two most popular are FanDuel and DraftKings, the online fantasy sports industry has exploded. Some estimates show that annual spending on fantasy sports in the U.S. and Canada exceeds $25 billion.

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Social Security – Two Important Changes in 2016
Social Security

Social SecurityPhase Out Coming for Two Common Social Security Claiming Strategies

Important news for social security recipients: with the Bipartisan Budget Act of 2015 recently signed into law, tougher rules are soon to be in effect for those claiming social security.

Two claiming strategies, “restricted application” and “file and suspend,” will soon be phased out.

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Nebraska Personal Property Tax Relief Act

PersonalPropertyTaxWhat is a Personal Property Tax Return?

In Nebraska all depreciable tangible personal property used in a trade or business and depreciated for tax purposes is subject to personal property taxes.  Taxpayers must report all taxable tangible personal property that is located in Nebraska as of January 1 of each year.  It is very important that personal property tax returns are filed on or before May 1 of each year with the county assessor in each county in which the personal property has situs.  If the property has situs in more than one county, a return must be filed in each county.

There are no extensions granted for personal property returns and there are penalties for failing to file on time. Personal property returns filed after May 1 and before June 30 are subject to a 10% penalty of the tax due on the value added.  Personal property returns filed on or after July 1 will be subject to a penalty of 25% of the tax due on the value added.

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How to Make the Most of Your Non-Cash Contributions

goodwill storeCome January, many people are ready for a fresh start. Especially after the holiday season, this often means clearing out the clutter to make room for the new: in other words, finally hauling those bags of old clothes sitting in the basement to the Salvation Army, Goodwill, or another charitable organization.

Once you’ve gathered up items you’d like to donate, Charity Navigator’s guide to donating Non-cash Items recommends finding a local charity in order to reduce transportation costs that could ultimately lower the value of your donation: “Look first in your local community to find a charity to support with your non-cash contribution. Call around and ask charities if the accept the kind of items you are looking to donate, and if they don’t, find out if they have any suggestions for a charity that does.”

It’s a good idea to itemize any deductions, both cash and non-cash. However, non-cash contributions require some additional steps in order to calculate the value of goods you’ve donated throughout the year. If the total value of the items you’ve donated is under $500, you simply enter that value on line 17 of the Schedule A form. If you donated more than $500 worth of items, however, you need to fill out the charitable contributions federal deduction tax form, the 8283 form with the title “Noncash Charitable Contributions.”

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Dealing With Identity Theft

16794969011_2f725f6553_hHOW TO DEAL WITH IDENTITY THEFT

Quite often, the first indication you are a victim of identity theft is when you file a tax return only to find out a return has already filed under your name. Another common scenario is when you hear of a business (or the government) being hacked. Of course, you were a customer of the business, and the company’s records held your personal information.

At this point, you are faced with the question: What should I do? This is where I found myself last spring, as a former federal employee, after the federal government was hacked.

Unfortunately, once a thief has your information, you have to assume that the risk of it being used will never go away. When you find yourself in this situation, you have several options:

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