Tax Tips for Businesses

CARES Act: Small Business Overview

This information is constantly changing. We will update it as we can. Please make sure to review the PPP loan under the SBA loan section below. It is something that most of our clients could and should take advantage of.

Employee Retention Credit

Qualifying employers can take a tax credit equal to 50% of employee’s wages if your business was entirely or partially shut down or closed due to COVID-19 related orders or if gross receipts declined by more than 50% when compared to the same quarter of the year before. More details are available on the IRS website here.

Delay in Payment of Employer Payroll Taxes

Although this provision is allowed we do not recommend it. Staying in the habit of paying payroll taxes is very important. Penalties for not paying payroll taxes at the deferred time can be very high.

This provision allows employers to defer payment their portion of Social Security (FICA) tax for wages from March 27, 2020 to December 31, 2020. Half of the taxes owed will be due by December 31, 2021 and the other half will be due on December 31, 2022.

In the example below the only portion that you would be able to defer would be the $6,200 of the employer’s portion of FICA or Social Security.

  • $100,000 gross wages from March 27 – December 31, 2020
  • $6,200 FICA, employee’s share
  • $1,450 Medicare, employee’s share
  • $6,200 FICA, employer’s share
  • $1,450 Medicare, employer’s share

Mandatory Paid Sick Leave and E-FMLA

See our post here describing the leave policy. Employers would receive a tax credit equal to the amount of paid sick leave and expanded family medical leave paid and the related taxes.

SBA Loans

Paycheck Protection Plan Loan (PPP Loan)

This loan is applied for through banks that are qualified to do SBA lending. Applications may begin to be sent beginning April 3, 2020. Please reach out to your banker or if you need a referral please let us know.

This loan allows you to receive up to 2.5x your average monthly payroll. If within the 8 week following the close of the loan you use the funds to pay payroll, rent, utilities or interest on loans, the amount you pay for those expenses may be forgiven and you won’t have to pay back that portion of the loan.

Most businesses will qualify including self-employed individuals (Sole Proprietors, Partnerships, etc.). There are many rules as to what is included in your average payroll and reductions in forgiveness if you have less employees than in the past. WCG Inc, another CPA firm, has a great post with many of those details.

Economic Injury Disaster Loan (EILD) and $10k Grant

This loan is applied for directly on the SBA website here. It is a basic application that is available right now.

In applying for this loan you can request that the SBA send you a one-time $10,000 grant that you do not need to pay back unless you also are participating in the PPP loan above. The $10k should arrive within a week of submitting your application.

This loan is essentially just a loan that is much easier to qualify for and the terms are favorable (3.75% interest rate, up to 30 year amortization). The entire country is in a disaster are due to COVID-19 so everyone should be eligible

Additional Resources

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SBA Loans Available for COVID-19 Affected Businesses

The following information is very new and constantly changing but we wanted to provide it to you as quickly as we could. Please note the date of the post and recognize that each business is different in how this will or will not apply to them. We may not have the answers to all of your questions but we will do our best to answer how this applies to you.

We do not have the expertise or knowledge to fill out loan applications on your behalf at this time. We are able to provide necessary documentation that you may need from us if you are unable to find them in your records. We also have bank contacts that would be able to assist. Please reach out and we can pass on their information to you.

Coronavirus Emergency Loans (passed 3/27/2020)

With the passing of the CARES Act on Friday, March 27, 2020, there are some options for loan forgiveness as well for qualifying expenses. Please review the US Chamber of Commerce’s Guide and Checklist for details. This loan program is much better than the remaining information in this post.

Other SBA Loans (passed 3/6/2020)

Under the Coronavirus Preparedness and Response Supplemental Appropriations Act (the Act), small businesses that have suffered substantial economic injury as a result of COVID-19 can apply for low-interest federal disaster loans through SBA. Small businesses and nonprofits can apply for working capital loans of up to $2 million.

We’ve highlighted the following key details of the Act for you here, but you can also learn more by visiting the COVID-19 disaster assistance page on SBA’s website.

  • State governors must first request access to the Economic Injury Disaster Loan program. Once the declaration is made, information on the application process for disaster loan assistance will be made available to affected small businesses within the given state.
  • Loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits.
  • Loans can be used to cover accounts payable, debts, payroll and other bills.
  • Loans can be offered with long-term repayments in order to keep payments affordable—up to a maximum of 30 years. Terms are determined on a case-by-case basis.
  • Businesses will apply for loans online and select “Economic Injury” as the reason for seeking assistance.
  • SBA offers disaster assistance via its customer service center. If you have questions or want to check if your state is eligible, contact U.S. Small Business Administration via phone at 800.659. 2955 (TTY: 800.877.8339) or e-mail  disastercustomerservice@sba.gov.

The coronavirus situation is changing rapidly, as are the updates to various relief efforts. We will continue to monitor news and keep you updated as clarification is provided.

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Tax Return and Payment Deadline Pushed to July 15, 2020

The IRS has changed the tax deadline to now be July 15, 2020. This means that tax returns do not need to be submitted and payments do not need to be made until July 15th. We encourage you to still file as soon as you can. If you owe you can still wait to pay but finalizing the information and getting it into the IRS early will be critical, especially as they have slowed down as well.

If you are expecting a refund we highly encourage you to get your return filed as soon as possible. As of this posting the IRS is still issuing refunds as normal but they will become busy sending stimulus checks in the coming weeks. Below is some additional information from the IRS.

Tax Deadline Extension

Below, you will find a list of frequently asked questions in reference to the Internal Revenue Service’s (IRS) Notice 2020-18 (PDF). In this Notice, the Treasury Department and the IRS announced special Federal income tax return filing and payment relief in response to the ongoing COVID-19 emergency.

You can review the IRS page for additional information here:
https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers.

Frequently Asked Questions

Question 1: Who is eligible for relief under the Notice?

Answer: Any person with a Federal income tax return or payment due on April 15, 2020 is eligible for relief under the Notice. “Person” includes any type of taxpayer such as an individual, a trust, an estate, a corporation or any type of unincorporated business entity. The payment due refers to both 2019 Federal income tax payments (including payments of tax on self-employment income) and 2020 estimated Federal income tax payments (including payments of tax on self-employment income)—regardless of the amount owed. The return or payment must be due on April 15, 2020—this relief does not apply to Federal income tax returns and payments due on any other date.

Question 2: Do I have to actually be sick, quarantined or have any other impact from COVID-19 to qualify for payment relief?

Answer: No, you do not have to be sick, quarantined or have any other impact from COVID-19 to qualify for relief. You only need to have a Federal income tax return or payment due on April 15, 2020 as described above.

Question 3: I am a fiscal year filer. My Federal income tax return for fiscal year 2019 is due on April 15, 2020. Am I an “Affected Taxpayer” eligible for relief under the Notice?

Answer 3: Yes, the relief provided in the Notice applies to Federal income tax returns and payments in respect of an Affected Taxpayer’s 2019 taxable year and postpones those 2019 return filings and payments due on April 15, 2020 until July 15, 2020. If your Federal income tax return for your fiscal year ending during 2019 is due on April 15, 2020, whether that is the original due date or the due date on extension, your due date is postponed to July 15, 2020.

Question 4: Does this relief apply to state tax liabilities?

Answer: No, this relief applies only to Federal income tax payments. State filing and payment deadlines vary and are not always the same as the Federal filing and payment deadline. We urge you to check with your state tax agencies for those details. More information is available at https://www.taxadmin.org/state-tax-agencies.

Question 5: I haven’t filed my 2019 income tax return yet (that would have been due on April 15), but I expect to file it by July 15. What do I need to do?

Answer: Nothing, except file and pay any tax due with your return by July 15. You don’t need to file any additional forms or call the IRS to qualify for this automatic Federal tax filing and payment relief. If you expect a refund, you are encouraged to file your return as soon as you can so that you can receive your refund. Filing electronically with direct deposit is the quickest way to get refunds. If you need more time beyond July 15 to file your return, request an automatic extension of time to file as described next.

Question 6: What if I am unable to file my 2019 income tax return (that would have been due on April 15) by July 15, 2020?

Answer: If you are an individual, you can request an automatic extension to file your Federal income tax return if you can’t file by the July 15, 2020 deadline. The easiest and fastest way to request a filing extension is to electronically file Form 4868 through your tax professional, tax software or using the Free File link on IRS.gov. Businesses, including trusts, must file Form 7004.

You must request the automatic extension by July 15, 2020. If you properly estimate your 2019 tax liability using the information available to you and file an extension form by July 15, 2020, your tax return will be due on October 15, 2020. To avoid interest and penalties when filing your tax return after July 15, 2020, pay the tax you estimate as due with your extension request.

Question 7: I already filed my 2019 income tax return (that would have been due on April 15) and I owe taxes, but I haven’t paid yet. What do I need to do to avoid interest and penalties?

Answer: To avoid interest and penalties, pay your taxes in full by July 15, 2020. If you filed Form 1040 or Form 1040-SR, the tax payment amount can be found on line 23. If you filed Form 1040-NR, the tax payment amount can be found on line 75. For a corporation filing Form 1120, the tax payment amount can be found on line 35.

Interest and penalties will begin to be charged after July 15 for any amount remaining unpaid by that date.

Question 8: I already filed my 2019 income tax return that would have been due on April 15 and scheduled a payment of taxes for April 15, 2020. Will this payment be automatically rescheduled to July 15, 2020?

Answer: No, the payment will not be automatically rescheduled to July 15, 2020. If you do nothing, the payment will be made on the date you chose. Here is information on how to cancel and reschedule your payment:

  • If you scheduled a payment through IRS Direct Pay, you can use your confirmation number from the payment to access the “Look Up a Payment” feature. You can modify or cancel a scheduled payment until two business days before the payment date. The email notification you received when you scheduled the payment will contain the confirmation number.
  • If you scheduled a payment through the Electronic Federal Tax Payment System (EFTPS), click on “Payments” from the EFTPS home page, login, click “Cancel a Tax Payment” from the left menu and follow the instructions. You must do so at least two business days before the scheduled payment date.
  • If you scheduled a payment as part of filing your tax return (authorizing an electronic funds withdrawal), you may revoke (cancel) your payment by contacting the U.S. Treasury Financial Agent at 888-353-4537. You must call to make a payment cancellation request no later than 11:59 p.m. ET two business days prior to the scheduled payment date.
  • If you scheduled a payment by credit card or debit card, contact the card processor to cancel the payment.

Question 9: The Notice postpones the deadline for first quarter 2020 estimated income tax payments due on April 15, 2020. What about second quarter estimated tax payments due on June 15? Have they been postponed as well?

Answer: No, second quarter 2020 estimated income tax payments are still due on June 15, 2020. First quarter 2020 estimated income tax payments are postponed from April 15 to July 15, 2020.

Question 10: Does this relief provide me more time to contribute money to my IRA for 2019?Answer: Yes. Contributions can be made to your IRA for a particular year at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, 2020, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020. For more details on IRA contributions, see Publication 590-A – Contributions to Individual Retirement Arrangements (IRAs).

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New Sick Pay and Medical Leave Requirements Due to COVID-19

The following information is very new and constantly changing but we wanted to provide it to you as quickly as we could. Please note the date of the post and recognize that each business is different in how this will or will not apply to them. We may not have the answers to all of your questions but we will do our best to answer how this applies to you.

Family and Medical Leave Act (FMLA) expanded to provide relief to those affected by COVID-19

“The Families First Coronavirus Response Act” (FFCRA), which goes into effect April 1, 2020 and expires December 31, 2020, responds to the coronavirus outbreak by providing additional assistance in the areas of COVID-19 testing, sick leave, food assistance, and more. We’ve compiled key details of FFCRA that we believe you need to know.

The following items are mandatory unless you believe it will “jeopardize the viability of the business is a growing concern”.  You may apply for an exemption, but the Department of Labor has yet to provide details of how this exemption process will work and who qualifies.

In summary, the Act:

  • Requires employers to provide emergency paid sick leave to workers affected by COVID-19
  • Expands family and medical leave (FMLA) for employees that are required to care for children out of school or daycare.
  • Offers increased funding for state unemployment insurance, food stamp and nutritional programs.

More specifically, here’s what The Families First Coronavirus Response Act means for both business owners and employees in the areas of sick leave and expanded family and medical leave.

  • Emergency paid sick leave:
    • Employees are eligible for up to two weeks of sick leave (full pay for self, 2/3 pay for family care) for illness, quarantine or school closures.
    • Applies to employers with fewer than 500 employees
    • All employees no matter the length of employment (some exclusions may apply)
  • FMLA expansion covers:
    • Employees are eligible for up to 12 weeks of FMLA leave for school closures (2 weeks unpaid and then up to 10 weeks at 2/3 pay).
    • Employers with fewer than 500 employees
    • Employees who have been employed for at least 30 calendar days (some exclusions may apply)
    • Employees who must care for children under the age of 18 in the event of school and place-of-care closures or if care provider is unavailable due to a public health emergency with respect to COVID-19.

Qualifying Reasons for Leave related to COVID-19

  1.  Is subject to Federal, State or local quarantine or isolation order related to COVID-19
  2. Has been advised by a health care provider to self-quarantine related to COVID-19
  3. Is experiencing COVID-19 Symptoms and is seeking medical diagnosis
  4. Is caring for an individual subject to an order described in number 1 or 2 above. (Does not have to be a family member.)
  5. Is caring for his or her child whose school or place of care is closed (or child care provider is unavailable due to COVID-19 related reasons

Is experiencing any other substantially similar condition specified by the US Department of Health and Human Services.

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IRS Tips for the Home Office Deduction

IRS Tips for the Home Office Deduction

Taxpayers who use their home for business may be able to deduct expenses for the business use of it. Qualified persons can claim the deduction whether they rent or own their home. Use the simplified method or the regular method to claim a deduction.

Here are six tips to keep in mind about the home office deduction:

  1. Regular and Exclusive Use. Generally, taxpayers must use a part of their home regularly and exclusively for business purposes. The part of a home used for business must also be:
  • A principal place of business, or
  • A place where taxpayers meet clients or customers in the normal course of business, or
  • A separate structure not attached to the home. Examples could include a garage or a studio.
  1. Simplified Option. To use the simplified option, multiply the allowable square footage of the office by a rate of $5. The maximum footage allowed is 300 square feet. This option will save time because it simplifies how to figure and claim the deduction. It will also make it easier to keep records. The rules for claiming a home office deduction remain the same.
  2. Regular Method. This method includes certain costs paid for a home. For example, part of the rent for rented homes may qualify. For homeowners, part of the mortgage interest, taxes and utilities paid may qualify. The amount deducted usually depends on the percentage of the home used for business.
  3. Deduction Limit. If the gross income from the business use of a home is less than expenses, the deduction for some expenses may be limited.
  4. Self-Employed. Taxpayers who are self-employed and choose the regular method should use Form 8829, Expenses for Business Use of Your Home, to figure the amount to deduct. Claim the deduction using either method on Schedule C, Profit or Loss from Business. See the Schedule C instructions for how to report the deduction.
  5. Employees. Employees must meet additional rules to claim the deduction. For example, business use must also be for the convenience of the employer. If qualified, claim the deduction on Schedule A, Itemized Deductions. This deduction is available on form 2106 for calendar year 2017. With the passing of the Tax Cuts and Jobs Act of 2017, this deduction is eliminated. It will not be available on your calendar year 2018 tax return.

 

Information from IRS Tax Tip 2017-41 was used in this blog post.

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Things to Know about Taxes and Starting a Business

Four Things to Know about Taxes and Starting a Business

New business owners have tax-related things to do before launching their companies. IRS.gov has resources to help. Here are some items to consider before scheduling a ribbon-cutting event.

Choose a business structure

When starting a business, an owner must decide what type of entity it will be. This type determines which tax forms a business needs to file. Owners can learn about business structures at IRS.gov. The most common forms of businesses are:

Determine business tax responsibilities 

The type of business someone operates determines what taxes they need to pay and how to pay them. There are the five general types of business taxes.

  • Income tax – All businesses except partnerships must file an annual income tax return. They must pay income tax as they earn or receive income during the year.
  • Estimated taxes – If the amount of income tax withheld from a taxpayer’s salary or pension is not enough, or if the taxpayer receives income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, they may have to make estimated tax payments.
  • Self-employment tax – This is a Social Security and Medicare tax. It applies primarily to individuals who work for themselves.
  • Employment taxes – These are taxes an employer pays or sends to the IRS for its employees. These include unemployment tax, income tax withholding, Social Security, and Medicare taxes.
  • Excise tax – These taxes apply to businesses that:
    • Manufacture or sell certain products
    • Operate certain kinds of businesses
    • Use various kinds of equipment, facilities, or products
    • Receive payment for services

Choose a tax year accounting period

Businesses typically figure their taxable income based on a tax year of 12 consecutive months. A tax year is an annual accounting period for keeping records and reporting income and expenses. The options are:

  • Calendar year: Jan. 1 to Dec. 31.
  • Fiscal year:12 consecutive months ending on the last day of any month except December.

Set up recordkeeping processes

Being organized helps businesses owners be prepared for other tasks. Good recordkeeping helps a business monitor progress. It also helps prepare financial statements and tax returns. See IRS.gov for recordkeeping tips.

Information from IRS Tax Tip 2017-67 was used in this blog post. Please contact the professionals at Fox Peterson for a free, no obligation initial consultation regarding your new business.

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2016 Year-End Letter

2016 Year-End Letter

2016 is coming to an end and it will soon be time to file income taxes. We look forward to seeing you again as we assist you with your income tax preparation. We have compiled a list of planning tips and suggestions in our year-end letter and recommend that you take some time to read through it. Feel free to contact us with any questions you have. There is still time to set up an appointment for year-end tax planning.Fox Logo

For your copy of the 2016 Year End Letter, Click Here.

We appreciate your business and wish you all the best for the Holidays this year!

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Capital Gains and Losses – Helpful Facts

Capital Gains and Losses – Helpful Facts

When you sell a capital asset, the sale normally results in a capital gain or loss. A capital asset includes most property you own for personal use or own as an investment. Here are helpful facts that you should know about capital gains and losses:

1. Capital Assets.  Capital assets include property such as your home or car, investment-propertyas well as investment property, such as stocks and bonds.

2. Gains and Losses.  A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.

3. Net Investment Income Tax.  You must include all capital gains in your income and you may be subject to the Net Investment Income Tax if your income is above certain amounts. The rate of this tax is 3.8 percent.

4. Deductible Losses.  You can deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of property that you hold for personal use.

5. Limit on Losses.  If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

6. Carryover Losses.  If your total net capital loss is more than the limit gains-vs-lossesyou can deduct, you can carry it over to next year’s tax return.

7. Long and Short Term.  Capital gains and losses are treated as either long-term or short-term, depending on how long you held the property. If you held it for one year or less, the gain or loss is short-term.

8. Net Capital Gain.  If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain.

9. Tax Rate.  The tax rate on a net capital gain usually depends on your income. The maximum tax rate on a net capital gain is 20 percent. However, for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gain.

Contact the professionals at Fox Peterson for additional help regarding capital gains and losses.

Information from IRS tax tip 2016-33 was used in this post.

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June Tax Tips – Avoid an Audit

Tips to Help AVOID AN AUDIT

In 2014, the IRS audited less than 1% of individual income tax returns filed for the 2013 tax year. That’s fewer than in the past and may reflect lower agency funding and manpower. Still, it amounted to more than 1.2 million audited returns – about three out of four examined by mail and the rest involving personal interviews.

Although the prospect of an IRS audit may seem daunting, many queries can be resolved simply by providing additional information or clarification. Some audits result in no change or even a tax refund. Even so, most people would prefer not to receive a letter from the Internal Revenue Service. Here are some tips to keep in mind when filing your return.

Check your math and personal information. The IRS sent out more than 2 million math-error notices in 2014. Although a math error may not lead to an audit, it can call attention to your return. The same is true for entering incorrect personal information, such as the wrong Social Security number, or forgetting to sign your return.

File forms on time. Not surprisingly, missing a filing deadline often leads to a letter from the IRS (though not necessarily an audit). Remember that even if you file an extension, you must pay all tax due by the regular filing deadline or you will be charged interest.

Report all income. Other sources of income not reported on a W-2 form might include investment income, interest, royalties, rent, compensation as an independent contractor, forgiven debt, alimony, tips, gambling winnings, heath insurance reimbursements (for expenses deducted in a previous year), and proceeds from sales on online sites such as eBay. Many types of income are reported to the IRS by the payer (typically on a 1099 form), but even if income is not reported by the payer, you should include it on your tax return.

Use good judgment when taking deductions. Take all deductions allowed by law, but keep in mind that certain deductions tend to raise a red flag. Among the most common are home-office deductions, vehicle expense deductions, and high value charitable contributions. Follow all legal requirements and keep necessary records. If you claim self-employment business expenses, be sure you understand IRS regulations distinguishing a business from a hobby. And remember that there are more rigorous record-keeping requirements for higher-value charitable deductions

Find a good tax preparer. It’s generally wise to consult with a tax professional before taking specific action related to your taxes. The professionals at Fox Peterson are fully qualified to assist you with all your personal and business income tax and accounting needs.

Tax Penalty Relief. If you miss the April 18 tax return filing deadline this year and face penalties for late filing and late payment, see whether you quality for this one-time waiver before paying the fines. Under the IRS’s “first time abate” program, the IRS will waive the penalties for those who pay the tax due (or arrange to pay via installments) and who have complied with filing and payment obligations for the previous three years. The forgiveness isn’t automatic. You have to ask for it, either with a written note when you file your return or a written or telephone appeal after you receive a penalty notice.

Taking extra care when preparing your return may reduce your chances of an audit or other query from the IRS. The professionals at Fox Peterson are prepared to help you every step of the way.

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Protect Your Computer Online

Protect Your Computer Online

The Internal Revenue Service, the states and the tax industry urge you to be safe online and remind you to take important steps to help protect yourself against identity theft.

Scammers, hackers and identity thieves are looking to steal your personal information – and your money. But there are simple steps you can take to help protect yourself, like keeping your computer software up-to-date and giving out your personal information only when you have a good reason.

We all have a role to play to protect your tax account. There are just a few easy and practical steps you can take to protect yourself as you conduct your personal business online.

Here are some best practices you can follow to protect your tax and financial information:

  1. Understand and Use Security Software.  Security software helps protect your computer against the digital threats which are prevalent online. Generally, your operating system will include security software or you can access free security software from well-known companies or Internet providers. Other options may have an annual licensing fee and offer more features. Essential tools include a firewall, virus/malware protection and file encryption if you keep sensitive financial/tax documents on your computer. Security suites often come with firewall, anti-virus and anti-spam, parental controls and privacy protection. File encryption to protect your saved documents may have to be purchased separately. Do not buy security software offered as an unexpected pop-up ad on your computer or email! It’s likely from a scammer.Security Lock
  2. Allow Security Software to Update Automatically. Set your security software to update automatically. Malware – malicious software – evolves constantly and your security software suite is updated routinely to keep pace.
  3. Look for the “S” for encrypted “https” websites. When shopping or banking online, always look to see that the site uses encryption to protect your information. Look for https at the beginning of the web address. The “s” is for secure. Unencrypted sites begin with an http address. Additionally, make sure the https carries through on all pages, not just the sign-on page.
  4. Use Strong Passwords. Use passwords of at least 10 to 12 characters, mixing letters, numbers and special characters. Don’t use your name, birthdate or common words. Don’t use the same password for several accounts. Keep your password list in a secure place or use a password manager. Don’t share your password with anyone. Calls, texts or emails pretending to be from legitimate companies or the IRS asking you to update your accounts or seeking personal financial information are generally scams.
  5. Secure your wireless network.  A wireless network sends a signal through the air that allows you to connect to the Internet. If your home or business wi-fi is unsecured it also allows any computer within range to access your wireless and steal information from your computer. Criminals also can use your wireless to send spam or commit crimes that would be traced back to your account. Always encrypt your wireless. Generally, you must turn on this feature and create a password.
  6. Be cautious when using public wireless networks. Public wi-fi hotspots are convenient but often not secure. Tax or financial Information you send though websites or mobile apps may be accessed by someone else. If a public Wi-Fi hotspot does not require a password, it probably is not secure. If you are transmitting sensitive information, look for the “s” in https in the website address to ensure that the information will be secure.
  7. Avoid phishing attempts. Never reply to emails, texts or pop-up messages asking for your personal, tax or financial information. One common trick by criminals is to impersonate a business such as your financial institution, tax software provider or the IRS, asking you to update your account and providing a link. Never click on links even if they seem to be from organizations you trust. Go directly to the organization’s website. Legitimate businesses don’t ask you to send sensitive information through unsecured channels.

Information from IRS Security Awareness Tax Tips was used in this blog post

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