Author Archives: Backup

AMERICANS 60 AND OLDER are the prime targets for fraud, especially by cybercriminals. Why do they view older people as easy marks? Seniors have savings to steal, and they may be more trusting and less familiar with technology than younger people.

In 2024, those 60 and older reported fraud totaling nearly $4.9 billion according to the FBI’s Internet Crime Complaint Center. 1 Actual losses, however, are likely much higher. Often, elder fraud goes unreported because seniors are embarrassed they fell for a scam, or they are afraid their financial independence will be taken away if they let a loved one know they’ve been swindled.

Whether you’re watching out for an older friend or relative or protecting your own finances, here’s what to know about today’s biggest risks and the steps you can take to fight back.

Cyber Scams Targeting Seniors

1. Tech support scams. A pop-up window alerts you that a virus has infected your computer or that your online accounts have been hacked. You may receive an official-looking email from your bank reporting unauthorized account activity. Scammers posing as tech support will direct you to call a number so they can “fix” the pressing problem. Their real expertise, however, is to separate you from your savings by convincing you to transfer money out of your accounts to “protect” it. They may also install software on your computer that captures account logins and other personal information.

2. Government imposter scams. Employing authentic-looking caller ID or logos, scammers pose as government officials via texts, calls, and emails. The IRS claims you owe back taxes; the Social Security Administration says your benefits are expiring; Medicare offers a free medical device if you verify your Medicare number. All are scammers, after money or sensitive personal information. A newer scam involves texts from your state’s Department of Motor Vehicles warning you to pay an overdue traffic ticket or unpaid toll or risk fines and the loss of your license. In another new one, criminals impersonating the local police claim you’ve missed jury duty and face arrest if you don’t pay a fine.

3. Romance scams. Scammers using fake identities target seniors on dating websites, social media platforms, messaging apps, and online forums. Con artists will court their targets slowly, never agreeing to meet in person, then ask for help with a financial crisis or other need, requesting money via cryptocurrency, wire transfer, gift cards, or peer-to-peer payment apps. Victims’ funds are nearly impossible to recover.

4. AI fakes. Messages generated by artificial intelligence can be tailored to appear specifically for you. A favorite scammer tactic is to ask, ‘Can you hear me?’ when you answer the phone. As soon as you say ‘Yes,’ the criminals can clone your voice and use that voice print to call your financial institution, impersonating you with the help of AI. Or scammers use cloned voices to impersonate a family member who urgently needs money to cover emergency medical care. AI-generated deepfake videos and photos can pass for a friend or celebrity.

5. Investment scams. After building a personal or romantic relationship, a scammer presents a failsafe opportunity to invest often in cryptocurrency. Seeing your investment grow (on a fake investment platform), you invest more, until the scammer steals it all. This scam costs seniors the most money; the FBI says losses to investment scams jumped from $990 million in 2022 to more than $1.8 billion in 2024, an 85% increase. “A scammer will tell you that your financial advisor can’t offer you this great investment deal,” says Hutchins. “That’s all the more reason to ask your advisor what he or she thinks about any opportunity.”

6. Door to door salespeople. Con artists go door to door, offering to make repairs. They ask for payment upfront, then pretend to do the work or disappear.

How to Protect Yourself

Develop these habits and best practices for steering clear of fraud and share them with friends and family.

Never click on a link in an unsolicited email, text, or pop-up box. Any email or text from a bank or legitimate company will ask you to log in to your account to receive a message. If you are concerned, contact the company directly using the phone number listed on its website or in a recent statement. Be equally suspicious of any call, text, or email that ostensibly comes from the government. A government agency will contact you by mail if there is a problem.

Hang up on anyone who insists you must urgently move money or share personal information. If that request appears to come from a child or grandchild in need of emergency funds, call a family member to verify the story. Come up with a code word or phrase that family members can use to prove that any call for help is real.

Never give remote access to your computer to someone who contacts you unsolicited. Close pop-up boxes and restart your computer if they don’t disappear. Block unwanted calls and report suspicious texts as junk. Consider installing reputable anti-virus software or programs that can detect AI-generated videos and block scam texts, calls, and websites.

No government agency or legitimate business will require payment in the form of cash, cryptocurrency, gift cards, or a wire transfer. Scammers use these methods because you have little chance of recovering your money.

Being informed and cautious can help you avoid falling victim to scams and keep your tax information secure. If you believe you have been scammed, report the crime. File a complaint at the FBI’s Internet Crime Complaint Center. Report suspicious calls or messages to the FTC (877-382-4357 or online) or local law enforcement. AARP’s Fraud Watch Network Helpline (877-908-3360) has specialists who can advise on next steps. Call our office at (631) 585-9698 to take extra steps to protect your personal information with the Internal Revenue Service.

#FraudAlert #IRShelp #IdentityTheft #ProtectSeniors

Considering the tax implications of key financial moves could save you money. Here’s what you need to know.
 
Buying or Selling Your Home
You may be eligible for a capital gains tax exclusion on the first $250,000 of profit — $500,000 if you’re married and file jointly — when selling your primary residence.
 
You, and your spouse if you’re married, must have lived in the house for at least two of the past five years before the date of the sale. With the maximum capital gains tax rate generally at 20%, this exclusion could save you up to $100,000 in federal income tax. The exclusion can’t be used if you excluded the gain from the sale of another home within the prior two years from the date of the sale.
 
Staying until the two-year threshold has been met, as the capital gains exclusion applies only to a home used as your primary residence for at least two years.
 
When calculating the amount of federal income tax owed on the sale, you can add the cost of certain qualifying home improvements you make before you sell to the cost basis of the home. The higher the basis of the home, the smaller your capital gain, which should result in a lower federal income tax liability.

Healthcare Costs
See if your employer offers a high-deductible health plan that enables you to make contributions to a qualifying health savings account (HSA). If you meet the eligibility requirements for an HSA, your contributions are tax-deductible or may be made by pre-tax salary deductions if allowed by your employer. Earnings and withdrawals for qualified medical expenses are federal income tax-free.
 
If your HSA allows you to invest the money you contribute, its potential growth could help you pay for healthcare costs as you age and even cover the cost of Medicare premiums.
 
Contributing money to an employer-sponsored flexible spending account (FSA) for healthcare expenses is another way to lower your federally taxable income. Participating in certain types of FSAs may have an impact on your eligibility for HSA contributions, so check with your Human Resources department to check your eligibility.

Selling Stocks & Bonds
Bond interest and dividends from real estate investment trusts (REITs) are generally taxed as ordinary income for federal income tax purposes, at rates as high as 37%. Qualified dividends and gains from the sale of investments held for more than a year are eligible for long-term capital gains rates, which are currently capped at 20%. In either case, an additional 3.8% net investment income tax may apply for taxpayers with incomes above a certain threshold.
 
Generally, consider holding non-income-producing investments, such as growth stocks, in your taxable accounts and keeping investments that generate income, like corporate bonds, in tax-deferred accounts.
 
It’s possible to offset capital gains by selling investments that have dropped in value. You can generally deduct up to $3,000 (or $1,500 if married and filing separately) of capital losses more than capital gains per year from your ordinary income. Any unused capital losses may be carried forward to the next taxable year.

Investing for Retirement
Traditional 401(k) contributions are made on a pre-tax basis, giving you immediate savings by reducing your federal taxable income. In addition, investment income in your traditional 401(k) account is not subject to federal income taxes until the money is taken out at retirement. Roth 401(k) contributions are made with after-tax income, but then qualified withdrawals starting at age 59½ are potentially federal income tax-free.
 
Splitting your contributions, putting in enough as traditional 401(k) contributions to limit your taxable income and keep from rising into a higher tax bracket, then putting the rest in as Roth 401(k) contributions.
 
Be sure to contribute enough to your 401(k) to earn the maximum matching contribution from your employer. Until recently, companies could allocate matching contributions only to a pre-tax account in your 401(k) plan, meaning any match of the employee’s Roth contributions would be made on a pre-tax basis. Since the enactment of the SECURE 2.0 Act of 2022, employers can now offer the option to match contributions on a Roth basis as well; it would then be up to the employee to elect the option.
 
This is just a sampling of the kinds of situations where you might benefit from being more tax aware. Tax laws change frequently, and anticipating future shifts in tax rates and rules could help to influence the financial decisions you make today.

If you would like to set up a tax strategy for your wealth management decisions, please call us at (631) 585-9698.

#NewYorkTaxes #NYTaxes #TaxHelp #BestTaxServices