Amazon tax-free shopping ends nationwide on April 1

When Amazon starts collecting sales tax from internet buyers in Hawaii, Idaho, Maine and New Mexico on April 1, it will mean the online retailer will be a tax collector for all 45 states and the District of Columbia that have the levies.

No, it's not a bad April Fools' joke targeting online shoppers. On this April 1, Amazon really will start collecting state sales taxes nationwide.

The Seattle-based internet retailer already was adding the tax line to invoices in most of the 45 states and District of Columbia that have sales (or similar) taxes.

Now, final deals have been struck between the online giant and Hawaii, Maine and New Mexico. There goes my plan to have my Amazon goods shipped to my cousin in Las Cruces!

From no way to OK: Back in 2008 when New York became the first state to demand Amazon collect and remit sales tax to Albany, the online retailer challenged the law. But a series of court battles went the Empire State's way.

Other state lawmakers and tax departments soon followed New York's remote sales tax collection lead.

Amazon at first resisted, ending its connection to affiliate sellers in some states.

But the revenue-hungry states held firm for the most part. Or they opted to provide Amazon with its own tax breaks to build distribution facilities within the states. Those structures provided the necessary physical nexus required by the 1992 U.S. Supreme Court ruling in Quill.

A more recent Supreme Court decision is seen as the catalyst of this latest rush by Amazon to strike tax collection deals with the few states where it didn't collect sales taxes. In December 2016, the justices refused to hear a challenge to Colorado's so-called tattletale sales tax collection law, letting the controversial statute stand.

Under the Colorado law, companies have the choice of sending buyer info to state tax officials so they can seek applicable sales taxes from resident buyers. Or the companies can collect the sales tax and remit to the state.

Amazon apparently decided the sales tax collection was easier.

Final few states added: Amazon also apparently decided just to run the sales tax collection table. Since the start of 2017, the online seller has agreed to collect sales tax in 10 states.

When April 1 arrives, the final three — OK, it's technically four, but I blogged about the imminent Idaho sales tax online collection last weekend — Amazon sales tax-free states will be part of the tax collection ranks.

Again, I've got to remind folks who are ticked off that this is not a new tax. States with sales taxes have use taxes. These levies, which typically are the same rate as your sales tax, mean you owe the tax on an item you bought elsewhere, either physically while traveling or from a catalog or online, and brought back to your home state to use.

But since consumers are not very compliant here, states have tried for years to get the out-of-state sellers to serve as their tax collectors. In a few days, that will be Amazon with its shipments to U.S. customers.

Here's the scoop on these final additions to the Amazon tax fold.

Hawaii: Technically, Hawaii doesn't have a sales tax. Instead, it collects a general excise tax (GET) from the Aloha State's businesses. Customers, however, will tell you that they pay as retailers pass along the GET in higher prices on products.

So what Amazon will be collecting in Hawaii from will be the state's use tax. This is the tax that all state tax departments levy on items bought out of state but brought within the borders to be used by the purchasers.

In Hawaii, notes the Department of Taxation, "The use tax equalizes the tax on a transaction by requiring those acquiring goods (for example, cars, clothes, jewelry, computers, equipment, etc.) from out-of-State sellers to pay a tax at the same rate that an in-State seller would have paid in general excise tax if the sale had occurred in Hawaii."

"The state will continue to seek ways to ensure that we collect taxes already owed. The revenue will help pay for vital services for the people of Hawaii," said Gov. David Ige said in a statement about the Amazon decision.

Beginning April 1, the money — estimated to be $60 million a year — will come from a 4.5 percent tax for purchases made by Amazon shoppers on Oahu and a 4 percent tax for purchases on the state's other islands.

Maine: Effective April 1, Down Easters will see their state's 5.5 percent sales tax tacked onto their Amazon invoices.

George Gervais, Commissioner of Maine's Department of Economic and Community Development, applauded the Amazon decision in a statement as "welcome news to Maine retailers and consumers." I know a few consumers who don't agree, but ….

"Maine businesses can go toe-to-toe with the very best out-of-state companies, provided they are competing on an equal playing field. Amazon's decision to collect and remit sales tax to the state of Maine is an important first step in leveling the playing field," said Gervais in a statement about the tax collection.

Maybe the not-so-thrilled consumers will be happier if, as Gervais postulated, "The increased tax revenue could help lawmakers reduce the state's income tax burden."

New Mexico: Like Hawaii, New Mexico doesn't have a strict sales tax, but rather a gross receipts tax (GRT).

The Land of Enchantment's GRT rate varies throughout the state, ranging from 5.125 percent to 8.6875 percent. The differences are because the total rate is a combination of state, county and, if applicable, municipal levies where businesses are located.

New Mexico businesses pay the total GRT to the state, which then distributes the counties' and municipalities' portions to those jurisdictions.

The New Mexico Taxation and Revenue Department says Amazon's decision to start collecting the tax will likely bring in "tens of millions" of dollars to the state.

New Mexico lawmakers recently had been moving a couple of bills to require remote retailers to collect tax from customers. It's not clear whether that legislation was the catalyst for Amazon's decision.

Consideration of the tax bills will continue, though, as Amazon isn't the only online seller operating in New Mexico.

There's also speculation that Amazon's decision could be in advance of the company opening a distribution center or other facility in New Mexico.

"That’s what we're most excited about," Ben Cloutier told the Albuquerque Journal. "The potential is there for more growth and not just the immediate revenue impact."

Beyond Amazon: Amazon's nationwide sales tax collection is good news for revenue-hungry states, but they're always looking for more tax targets.

While Amazon is the largest online retailer in the world, it is not the only one. So look for states to continue their legislative efforts to force other remote sellers to join Amazon tax collection ways.

How long has Amazon been collecting sales tax in your state? Has it made a difference in your online shopping?

You also might find these items of interest:

• City and other local taxes add to overall sales tax takes
• Useless use taxes could lead to national online sales tax collection
• 5 sales-tax-free states are perfect places to enjoy National Ice Cream Day

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/1pJpxE2FFao/amazon-tax-free-shopping-ends-nationwide-on-april-1.html

Health Savings Accounts' medical and tax advantages

Health Savings Accounts, or HSAs, have increased in popularity since they were created in 2004.

More than 20 million people now have these particular medical savings plans, according to a Kaiser Family Foundation (KFF) survey last fall. KFF's analysis also found that the average account balance grew by more than a third last year to more than $1,800.

Growth of HSAs could speed up under a Republican replacement for the Affordable Care Act. Various GOP alternatives for Obamacare call for expansion of HSAs.

High deductibles required: HSAs not only offer a way for account owners to pay medical bills, they do so in a tax-friendly way.

But before you can open an HSA, you must have a high-deductible health insurance plan, or HDHP.

As the medical coverage's name — and the table below for the 2016 and 2017 tax years — indicate, you have to pay more of your health care costs because of the large deductible.

______________________________

High Deductible Health Plan Limits
Source: IRS HDHP inflation adjustments

	2016	2017
Minimum health plan deductible, single coverage	$1,300	$1,300
Minimum health plan deductible, family coverage	$2,600	$2,600
Maximum out-of-pocket expenditures, single coverage	$6,550	$6,550
Maximum out-of-pocket expenditures, family coverage	$13,100	$13,100

______________________________

 

HSA covers out-of-pocket costs: While HDHPs can be costly if you have a lot of medical costs, they usually have lower monthly premiums than do medical policies with lower deductibles.

This is where an HSA comes into the picture. The money you put into an HSA helps pay for your HDHP increased out-of-pocket medical costs.

As the KFF data shows, more companies are offering their workers HDHPs and the associated HSA option. However, if you buy your HDHP on your own, you set up your HSA yourself, usually at a bank or other financial institution although some investment options are available.

When your money goes into an HSA via a workplace plan, it's taken out of your paycheck before taxes are calculated. If you make your HSA contributions yourself, those amounts are tax-deductible. Either way, HSA earnings are tax-free, as are withdrawals for eligible medical expenses

Limits on contributions: There are, however, Internal Revenue Service limits on how much you can contribute to an HSA.

The contribution caps are adjusted annually, if warranted, for inflation. The type of high deductible insurance policy you have also is a factor.

For 2016, the individual coverage HSA contribution limit is $3,350 and the family coverage limit is $6,750. For 2017, the amount for singles goes up slightly to $3,400 while the family coverage limit remains at $6,750. If you are age 55 or older, you can contribute an additional $1,000 to your HSA.

You have until the tax filing deadline to contribute to your HSA for the prior tax year. This April, that deadline is Tuesday the 18th.

GOP changes? House Speaker Paul Ryan's (R-Wisconsin) proposal would increase HSA contribution limits and allow more tax-free contributions.

An alternative offered by Sen. Rand Paul (R-Kentucky) would eliminate the upper limit on contributions and allow the accounts to be coupled with any type of insurance, not just high-deductible plans.

Regardless of what happens with Obamacare and any possible GOP replacement plan, a high deductible health plan and HSA might be worth exploring.

Today's Daily Tax Tip looks at the differences between HSAs and FSAs, another tax-favored medical acronym account (it stands for flexible spending account).

Check them both out and be sure to take advantage of whichever account works for your health care costs and tax situation.

You also might find these items of interest:

• High-deductible health care's high cost
• Obamacare tax filing tips as we wait for its repeal
• Comparing tax-favored HSA, HRA & FSA medical options

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/_xWQgoRk_T4/health-savings-accounts-medical-and-tax-advantages.html

12 often overlooked tax breaks

The April filing deadline (it's on the 18th this year) is less than a month away. So far, the tax season is running slow. The Internal Revenue Service says that fewer than half of the expected 153 million returns have arrived at its processing offices.

That indicates that there will be a mad rush to the tax filing finale.

That means that a lot of people will fall into the proverbial haste makes waste pit, being in such a hurry that they'll overlook some tax breaks.

If you're careful not to miss any tax breaks for which you qualify, you could save enough on your taxes to pay for a trip to Skyline Overlook on St. Thomas in the U.S. Virgin Islands.

Here are a dozen tax credits, deductions and income adjustments that are regularly neglected by filers. Granted, some can be claimed only if you itemize and most people don't. And, yes, some are pretty esoteric, applying to a relative handful of filers.

But some might fit your personal tax situation. So take a quick look and see if they apply to your taxes.

1. Charitable donations other than cash: It's always handy to write a check or use your credit card or even text a few dollars to a worthwhile charity. Then you jot those dollar amounts down on your Schedule A to deduct from your taxes. But your other donations count, too. This includes the value of the clothing and household goods you gave to your church's thrift shop, as well as your out-of-pocket expenses and even mileage in connection with your volunteer efforts. And don't forget about that jalopy you donated.

2. Moving expenses: Americans are a mobile society and when we move for work reasons, many of the costs can be written off on our taxes. Even better, you don't have to itemize. Your eligible relocation expenses are an above-the-line deduction on page 1 of Form 1040. 

3. Job-hunting costs: Costs associated with a job search in your current career field are deductible. This includes things like fees for preparing your resume and then sending it to prospective employers, as well as employment or outplacement agency fees. These are counted as itemized miscellaneous expenses on Schedule A. 

4. Costs of caring for others: Parents are well aware of the costs of child care. They also usually know they can claim a tax credit to cover some of those costs. But if you pay someone to care for another dependent while you go to work, those expenses count toward this tax break, too.

5. Interest on your RV or boat: Interest paid your main home's mortgage is one the most beloved tax deductions, at least for the real estate industry, homeowners and their members of Congress. But a home isn't limited to a typical house. As long as your place has sleeping, cooking and toilet facilities, the Internal Revenue Service says it counts for this deduction. This means a recreational vehicle or some boats qualify. And you also can the interest on your unconventional home even if you don't live in it year-round. Tax law allows you to deduct interest on mortgages for up to two dwellings, your primary residence and a second home. That includes second homes on wheels or in the water.

6. Property taxes paid on all your homes: Unlike the mortgage interest deduction that's limited to two residences, the property tax deduction is unlimited. If you own three, four or more homes, you can deduct the real estate taxes you pay on every single one of the properties.

7. State and local sales taxes: This itemized tax deduction was added to even out the itemizing options for folks who live in one of the seven states — Alaska, Florida, Nevada, South Dakota, Washington, Wyoming and here in Texas — that don't have any kind of income tax. But even if you do pay an income tax, if your state rate is low or your income was minimal, you might find you do better claiming the sales taxes instead. This could be especially true if you bought an expensive and sales-taxable major item, like a new car. Be careful, though. You must make a choice: claim the state and local income tax you paid last year or the state and local sales taxes. You can't mix and match them.

8. Retirement tax savings: Most folks already know that in certain cases, contributions to traditional IRAs (which can be made up to the filing deadline; again, April 18 this year) are tax deductible. But some folks also qualify for the Retirement Savers' Credit. This could cut $1,000 off your tax bill if you put money into a traditional or Roth IRA or contributed to your workplace retirement account. This credit phases out if you make too much money, but if you've been saving for your post-work years, check it out to see if you qualify.

9. Educational expenses: Uncle Sam is generous when it comes to helping fund higher education. There are the above-the-like deductions for student loan interest and college tuition and fees you paid. On the tax credit side, there's the popular American Opportunity Tax Credit, which offers a dollar-for-dollar reduction of the tax you owe; that could be up to $2,500 and possibly even more for some filers as a tax refund. Folks who've long been out of the traditional classroom, however, tend to overlook the Lifetime Learning Credit. This tax break provide students of all ages, including those who are done with full-time schooling but are taking take courses to help them get ahead at their jobs, a tax credit up to $2,000.

10. Gambling losses: Lady Luck wasn't so good to you on your last visit to Vegas, baby. Sorry. But if you have other gambling winnings, say that big office pool during March Madness (yes, it's taxable income), you can offset your gambling winnings with your losses. You'll have to file Schedule A. And you'll need good records of your winning and losing bets. But it can be worth it when it zeros out your gambling income.

11. Hobby expenses: These costs are a cousin of the gambling expenses write-off. If your hobby is something other than gambling, you can deduct some ordinary expenses you incur in engaging in your favorite pastime when it also brings in a few dollars. Remember, this is something you do for fun, such as photography; not an activity engaged in for profit, aka a job. But when your friends and neighbors hand over a few bucks for those great shots of their kids' birthday parties or wedding receptions, you can offset those earnings (which you're supposed to report on Line 21 of Form 1040) with your hobby expenses, which you claim on Schedule A.

12. Health Savings Account: The ever-increasing cost of health insurance has prompted many folks to opt for a high-deductible health plan. And to cover those deductibles, they've set up Health Savings Accounts (HSAs). When your HSA is through work, you put money into the account before any taxes are taxes are taken out of your paycheck. If you set up an HSA on your own at a bank or other financial institution, you make the contributions directly, then claim a deduction for those after-tax dollars (without having to itemize!) when you file your taxes. You complete Form 8889 and claim an above-the-line deduction on Form 1040.

Again, some — OK, a lot — of these deductions, income adjustments and tax credits obviously apply to special filing situations. But that might be your personal tax circumstance.

So check them out. If even just one works for you, be sure to claim it. Every tax breaks helps to get your tax bill as low as possible.

You also might find these items of interest:

• Don't commit these 10 costly tax sins of omission
• Life changes that could affect your tax withholding
• 10 tax sins of commission that could be quite costly

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/i95qI9kRbGM/12-often-overlooked-tax-breaks.html

Springtime is energy tax break time

Bluebonnets, the state flower of Texas, are among the wildflowers that emerged early this year thanks to warmer than normal temperatures. (Photo of a Hill Country patch on March 18, 2017, by Kay Bell)

Hello, Spring! You used to be my favorite season, but for the last few years — OK, the last dozen that we've been back in Texas — you've arrived in late February or early March and only lasted about three days.

By the time you're official, which was when you clocked in at 6:29 a.m. Eastern Daylight Time (5:29 a.m. CDT; I was asleep) today, it generally feels quite summery in Central Texas. The high here on this first official day of Spring 2017 is supposed to hit 85 degrees.

We are not alone. A new set of maps produced by the U.S. Geological Survey-USA National Phrenology Network shows just how unusually early spring is arriving across the United States.

So I've got lots of company when comes to dealing with warm weather. I've yet to turn on the air conditioning, but….

And it's still cold in some parts of the country. Are you drunk, Mother Nature?

Tax help dealing with weather: Regardless of which interior temperature control system you're using, you're probably trying to make it as energy efficient as possible.

Wasted heating or cooling is an expense that can be corrected.

It's also an expense that for a brief while still gets a bit of help via the Internal Revenue Code.

If you made certain home improvements last year to improve your home's energy efficiency, you might be able to claim up to $500 in tax credits for those upgrades on your 2016 return that's due by April 18.

The best thing about this tax break is that it's a credit. Unlike deductions that reduce your taxable income, tax credits help directly cut what you owe Uncle Sam dollar-for-dollar. 

There are three key factors for this tax break, which is officially known as the Residential Energy Efficient Property Credit and claimed on Form 5695.

First, the residential tweaks had to be eligible energy improvements, such as windows, doors, insulation, central air conditioning system, furnace, and roofing. Energy Star has the details on each qualifying home improvement made in 2016.

Second, you can't have used up your maximum of $500 in credits in prior tax years.

For example, you added new windows in 2014 and took the full $200 credit allowed for this upgrade on that year's return. In 2015 you put in extra attic insulation, giving you a $150 credit that tax year. Then last year you replaced your front door with a more energy-efficient one.

Based on your 2014 and 2015 claims that totaled $350, you've got a remaining energy-efficient home improvement tax credit for the 2016 tax year of $150.

Finally, the work was done by Dec. 31, 2016. As mentioned earlier, this tax credit expired at the end of last year.

So if you're home refurbishing ran into 2017, good for your making sure your home is in good shape, energy and otherwise, but you're likely out of tax luck. I don't see a lot of support right now for renewing this tax break this year, either as part of an extenders package or in the much hoped-for overall tax reform.

Solar power still gets tax relief: But there is an energy tax break that is still in the Internal Revenue Code through 2021 and is perfect for sunny locales like the Lone Star State.

It's the solar energy systems tax credit. It covers solar water heaters and solar (photovoltaic) panels used to provide a house's electricity.

As I noted back in January when we were shivering through a bit of a cold snap, this tax break covers up to 30 percent of the solar energy system's cost. It's available at this level through Dec. 31, 2019.

The next year, the credit drops to 26 percent and falls to 22 percent in 2021, the final year (for now) that the solar tax break is on the books.

While the phase-out is a bit of a bummer, there is some good news.

First, since solar energy units are expensive, there's no cap on the eligible solar components that can be counted under the credit.

Also, the tax break applies to upgrades made on existing homes, as well as those under construction.

Finally, you can claim it for systems installed in your primary residence and a second home.

Again, Energy Star has more on the federal solar energy tax credits.

Judging by the amount of sun we're getting and the heat that it's generating, it might just be time for the hubby and me to look into solar and the tax credits while they're still available.

How about you? If you're interested in solar power and the accompanying tax credit, the sooner you install a system, the quicker you'll get energy savings, along with a bigger federal tax credit.

Will you be taking the home energy tax break on your 2016 taxes? Have you claimed energy tax credits before? Would a tax break make a difference in whether you made such home improvements? 

You also might find these items of interest:

• Summer is here! Time to PACE your energy use
• Donald Trump supports wind industry tax incentives
• Spaniards hot under the collar after government taxes the sun

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/RS9zoqKkAbQ/spring-early-warming-energy-tax-breaks.html

Idaho to join Amazon sales tax collection ranks on April 1

On April 1, Idaho residents will join the almost nationwide list of places where Amazon collects sales tax. No kidding.

That day the Gem State will become the 42nd state — and 43rd taxing jurisdiction overall thanks to Washington, D.C., being part of the group — where buyers will have to pay sales tax on purchases delivered by the world's largest online retailer.

Idaho Gov. C.L. "Butch" Otter, in a statement issued to the Boise television station KTVB, called Amazon's tax collection decision "a matter of fairness."

In addition to helping the state collect more revenue, Otter said the Seattle-based company's collection of sales tax also "will help Idaho taxpayers comply with state law while creating a more level playing field for Idaho’s brick-and-mortar retailers."

Too many taxpayers have no use for use tax: That compliance issue is one that has bedeviled state tax departments across the United States for ages.

The 45 states and District of Columbia that collect sales tax also have a companion use tax. As the name indicates, the use tax applies to items that residents buy elsewhere, either in another state or in today's online age via the internet, and then bring into — or have delivered to — the state where the buyer will use it.

Many people are unaware of their states' use tax, although many fewer that before the remote sales tax debate became a big topic even beyond the tax world.

Others know about their state's use tax, but simply don't report their purchases or pay it.

Online state sales tax expansion efforts: States have been looking at various ways to force use tax compliance. Most, however, have decided it's easier to make remote sellers collect the tax money.

Amazon at first resisted such efforts to force it to become a de facto state tax collector.

However, as the company has located more physical facilities in states, which gives the legal nexus requiring the tax collecting, it has relented. It's even opted to collect sales tax even in states where it has no real-life operations.

The hope of state tax officials is that more companies will follow Amazon's lead and also tack tax onto the purchases they send across the country.

43 tax collection locales: So just where will Amazon be adding the "tax due" line to its invoices in a couple of weeks? The table below shows the April 1 tax collection states, plus the nation's capital city.

Alabama	Indiana	Nebraska	South Dakota
Arizona	Iowa	Nevada	Tennessee
Arkansas	Kansas	New Jersey	Texas
California	Kentucky	New York	Utah
Colorado	Louisiana	North Carolina	Vermont
Connecticut	Maryland	North Dakota	Virginia
District of Columbia	Massachusetts	Ohio	Washington
Florida	Michigan	Oklahoma	West Virginia
Georgia	Minnesota	Pennsylvania	Wisconsin
Idaho	Mississippi	Rhode Island	Wyoming
Illinois	Missouri	South Carolina	Who's Next?

Since 5 states don't collect a state-wide sales tax, that leaves just three where Amazon customers — and, in some cases, other cyber shoppers — won't see sales taxes added to their online invoices.

The still Amazon-tax-free states, for now, are Hawaii, Maine and New Mexico.

But for how long?

You also might find these items of interest:

• City and other local taxes add to overall sales tax takes
• Useless use taxes could lead to national online sales tax collection
• 5 sales-tax-free states are perfect places to enjoy National Ice Cream Day

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/GhI7OBI0pzs/idaho-to-join-amazon-sales-tax-collection-ranks-on-april-1.html

When it came to tax filing, the Devil made him not do it

A Pennsylvania man who said he didn't file 10 years' worth of federal tax returns because the forms required use of a Social Security number, which he considered analogous to the Biblical "mark of the beast."

James Kerr Schlosser's 666 tax protest, however, didn't convince the Internal Revenue Service or the legal system.

The 59-year-old Bird-in-Hand, Pennsylvania, resident was convicted on March 7 of failing to report $2.3 million he earned as a medical equipment salesman.

Foreign accounts, coins used in scheme: To evade the tax due on the millions, federal court papers show that Schlosser used foreign business trusts and corporations that he registered in Nevada to hide the money.

The original indictment handed up by a Pennsylvania grand jury in April 2016 alleged that Schlosser's money was deposited into non-interest earning investment accounts that the defendant established at two investment companies. This arrangement, according to court documents, was done in an effort to keep the firms from issuing 1099-INT forms, which the Internal Revenue Service could use to verify Schlosser's earnings.

To further conceal his receipt of income, federal investigators charged that Schlosser purchased gold coins from at least four coin dealers. He then reconverted the coins into cash through multiple purchases.

Ultimately, a Silver State-based mail forwarding service sent the money to Schlosser in Pennsylvania or to others who Schlosser had convinced to serve as trustees for one or more of the foreign business trusts, according the Department of Justice. 

Federal law enforcement officials said that Schlosser also had tried to revoke his American citizenship and Social Security identification, as well as declared himself a sovereign citizen not subject to federal income taxation.

666 defense dismissed: Schlosser testified in his own defense during this month's tax evasion trial. He cited the passage in the New Testament chapter of Revelations as his religious objection to the use of a Social Security number.

It didn't work.

Schlosser's sentencing is scheduled for June 10. He could be sent to prison for up to five years and face $450,000 in fines, plus court costs.

Those are substantial punishment amounts, but for this week's By the Numbers honor, I'm sticking with 666.

You also might find these items of interest:

• See you in Hell, or at least at the party
• 'Devil's' tax form prompts man to quit his job
• Religious freedom is not a valid tax evasion defense

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/7grzAuMGe48/man-refused-to-file-taxes-666-social-security-number-beast-mark.html

Tax phishing scheme hooks victims in Texas town famous for its water features

W-2 formsAquarena Springs in San Marcos, Texas, was famous in its heyday, part of which just happened to coincide with my youth, as a wonderful water park. No visit to relatives in nearby San Antonio was complete until we headed to Aquarena to ride in a glass-bottom boat, marvel at the mermaids and cheer Ralph the swimming pig as he made his famous swine dive.

Click fish image for full video view of Aquarena Springs from a glass-bottom boat.

The park is gone, replaced by a water research program under the auspices of Texas State University, or Southwest Texas State as it was known when I was a kid. I'm delighted that the school was able to integrate the boats that let you peer down at the fishy inhabitants of the clear spring-fed lake into its scientific mission.

So it's perversely fitting that 803 San Marcos residents -- the human, not gill-breathing ones -- were caught in a tax phishing scam.

W-2 tax scam nets new victims: The confidential personal and financial information of current and former City of San Marcos employees was compromised on March 13 when a municipal payroll employee sent the data in response to what appeared to be request from the mayor.

In this scam, which has been around for a year or so, tax identity thieves pose as company, or in this case local government, big wigs and send official looking fake messages under that guise. The message from the purported boss asks that the human resources or payroll staffer send back all the firm's (city's) employee data, including the latest W-2 forms.

These tax documents, which contain the workers' addresses and, most importantly, their Social Security numbers, is then used by the cyber crooks to file fake federal returns seeking fraudulent tax refunds.

The San Marcos scam was discovered after some of the unknowingly victimized city employees reported that their efforts to file their taxes was rejected by the Internal Revenue Service. The reason? The IRS told them they had already filed their 1040s.

Filing season resurgence: The IRS issued a warning just as the 2017 tax filing season began about the resurgence of this fake CEO phishing scheme. In that alert, the agency noted that the W-2 seeking scam, which was initially aimed at the corporate sector, had spread to other large institutional targets, such as school districts, tribal organizations and nonprofits.

Last May, the National Basketball Association's Milwaukee Bucks team fell victim to the tax document scam. Yes, the tax data of professional basketball players was stolen.

More recently and closer to San Marcos, crooks posing as the superintendent of the Belton, Texas, school district obtained W-2 forms for around 1,700 of the system's employee.

And in November 2016, the El Paso Times reported that officials of that Texas-Mexico border city sent $3.2 million intended for a city project contractor to fraudulent bank accounts after being duped in a phishing scam.

Given that the W-2 phishing scheme is still out there and apparently still succeeding, be extra careful this filing season. If you get what appears to be a questionable or unusual email from your boss, don't do anything until you check with her or him in person.

The extra scam prevention care — not just during tax filing season, but year round — could save you, your boss and your coworkers a lot of identity theft and tax fraud grief.

You also might find these items of interest:

• Watch out for the Dirty Dozen tax scams of 2017
• March arrives not as lion or lamb, but as a fish phish
• Phishing criminals pose as potential tax clients to infiltrate tax preparers' systems and steal data

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/m6lvPY1ZaWs/tax-phishing-scheme-hooks-victims-in-texas-town-famous-for-its-water-features.html