Monthly Archives: March 2015

What to Do When You’re the Victim of Identity Theft

Identity Thief – Online Fraud

Anyone at anytime can become an identity theft victim.

In fact, the Federal Trade Commission (FTC) reports that identity theft is the top consumer complaint in the U.S., with 19 new victims every minute.

Still, it isn’t until you become a victim of identity theft that you can fully understand how much the experience impacts your life.

To help you deal with the situation when your identity has been compromised, we’ve provided a few steps you should take immediately, once you’ve discovered an incident has taken place:

  •      Get in touch with the financial institution where the suspicious activity occurred, and let them know the details of the incident.
  •      Contact the Federal Trade Commission to file a complaint or to report suspicious calls or emails. You can call toll-free (877) 438-4338 or visit www.identitytheft.gov.
  •      Call or visit your local police department to file a police report.
  •      Contact your credit card issuers and let them know about the incident and possible fraudulent activity.
  •      Request a fraud alert for your credit bureau reports from one of the three credit reporting agencies (TransUnion, Equifax, Experian). The agency you contact is required to notify the other two agencies.
  •      Submit an Identity Theft Affidavit to the Internal Revenue Service (IRS) if you think the suspicious activity may affect your federal tax records.

While not all of these steps may apply to your specific situation, they are helpful guidelines to use when you become a victim of stolen identity. Even a seemingly small infringement can spill over into other areas of your financial life, so it’s a good idea to follow up with any fiduciary or administrative agencies that hold your personal information.

Want to see how Guidant is helping to stem cybercrime in financial services? Read our post on updated security measures for our clients.

 

Married Filing Jointly vs. Married Filing Separately

Married Couple Filing Taxes – Jointly or Separate

Should you file jointly or separately if you are a married couple?

Tax time is here, and some married couples may be wondering if filing jointly or separately is the right financial decision. This is especially true for those who are looking to preserve income and the ability to pay for expenses further down the road.

How do you know if married filing jointly or married filing separately is the best path for you and your spouse? The truth is, it depends on your individual situations. Here’s what we mean:

  •      In most cases, file jointly. Couples who file jointly have a lower tax liability than couples who file separately. In fact, married filing separately carries the highest tax liability of all filing statuses. Most of the wedded population files jointly because it allows them to keep many of the tax benefits, including: earned income credit, tuition and fees deduction, student loan interest deduction, tax-free exclusion of US bond interest, tax-free exclusion of Social Security benefits, credit for the elderly and disabled, child and dependent care credit, and education credits. Filing jointly also equates to a higher phase-out range for IRA deductions.
  •      Some situations call for filing separate returns. If you and your spouse receive unequal amounts of income, then it may be a good idea to file separately. For example, if you make $50,000 and your spouse makes $250,000, and you have significant medical expenses or capital gains or unearned income, then you may want to file your returns separately because your tax rates may be lower than if you were to file your returns jointly.

Another reason married filing separately might make sense is if you don’t want to be responsible for the income or taxes of your spouse. Sometimes, couples who are getting a divorce may choose to file separately because it eliminates any tax obligations once the divorce is finalized. Other times, one spouse may want to file separately if they know the IRS is going to take the refund from the other spouse, because of overdue tax returns or previous tax payments that are owed. If they file jointly, then the IRS will take money from both parties instead of just one.

Lastly, perhaps you just feel more comfortable being responsible for reporting your own income and not worrying about your spouse’s taxes. Married filing separately allows you to be responsible for the accuracy and payment of taxes for your own return, so for some this is a more straightforward approach.

Married filing separately is not the common filing status for most people, however it does have its purposes. Again, most people who are married will file jointly because it allows them to take advantage of certain tax benefits and lowers the tax liability. Of course, this is different for everyone, and what you owe and are allowed to deduct will vary based on your income.

There are also specific requirements for both individuals when filing separately, such as taking standard and itemized deductions. If one takes a standard deduction, then the other must also take the standard deduction. You cannot do two different things. If you live in a community property state, then you also may be subject to special rules.

Whether you think married filing jointly or separately is the right financial decision for you and your spouse, it can be helpful to consult with a professional accountant or tax preparer before filing. The rules for each filing status can be complex, and the penalties for filing inaccurately can be costly.

Want to know how your filing status may affect your financial plan? Contact Guidant Wealth Advisors for answers to your tax, retirement and investment questions.