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Money December 2016

Dollar Sense

Potpourri: Stuff You Should Know to Protect Your Assets

By Teresa Ambord

What should you do? The FTC says you can just hang up. I like to tell the caller, “Okay, but this sounds important so I want to record the call.” That results in an instant hang up on their end.

What should you not do? Absolutely do not press any buttons, on the phone or computer. Even if the call says you can opt out of future calls by pressing a button, don’t. Remember these are thieves and pressing any button may be giving them permission to bill you somehow.

Quick, Before the Year Ends, Check Your Tax Situation

The end of the year is rolling up fast. Time to think about tax moves you may need to make to protect your assets. While there’s time, talk to your financial advisor to see if any of these examples apply to you, and ask if there are others:

  • Do you need to take a required minimum distribution of your retirement accounts? Don’t wait too long. Financial professionals are busy at year end and may not be able to help you if you rush in too late.

  • Should you sell investments now to take the capital gains hit in 2016? The answer may depend on what you expect your tax situation to be in 2017. If you have looming capital gains, would it be wiser to take the hit now, or wait?

  • Should you increase your charitable contributions to get a tax break? Under a new administration, the rules regarding the deductibility of charitable contributions may ultimately change.

  • Were you planning to reduce your taxable estate by making monetary gifts? You probably know that you and your spouse can each make an annual gift of up to $14,000 to any number of recipients, without tax consequences. Suppose you have reason to reduce your taxable estate by more than that, in the next few weeks. Make your $14,000 gifts by December 31st. Then on January 1st, you can do it all again and still spread the amounts over 2016 and 2017.

  • Are there business purchases you could make now, to reduce your tax bite? New computers, equipment, business vehicles? Prices are generally good at year end. May as well minimize your net business profit with strategic purchasing. For 2016 you can purchase up to $500,000.

 

Social Security Raise is Disappointing, Again

By now you’ve gotten the non-news – your Social Security raise for 2017 will amount to about 1/3 of one percent. That means if your check is usually $2,000 it’ll rise meteorically to $2,006. As disconcerting as that is, last year the raise was zero. A year before that, it was 1.7%.

How do they come up with this stuff? It may seem like the random act of some greedy bureaucrats, but it’s based on inflation, and something akin to the Consumer Price Index. It’s called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), and it’s used to gauge how much prices go up on items seniors pay. When the CPI-W doesn’t increase, Social Security gets no COLA.

 

What else has changed?

  • If you’re still working, the wage on which you pay Social Security tax rises in 2017 from $118,500 to $127,200.

  • If you’re collecting Social Security and you’re still working, the amounts you can earn without losing benefits have changed.

  • For those under full retirement age, you can earn $16,920. After that, you lose one dollar for every two dollars in earnings above $16,920.

  • In the year you will reach full retirement age, you can earn $44,880. After that, you lose one dollar for every three dollars you earn.

  • As always, beginning the first day of the month you turn full retirement age, there is no limit to how much you can earn, and you won’t lose any benefits. So if your birthday is June 15 and on your next birthday you’ll turn your full retirement age, as of June 1, no matter how much you earn you will not lose a single dollar of Social Security benefits.

 

Tech Scams by Computer and Phone

Beware pop-ups! Have you ever been typing away on your computer when a pop-up message appears, telling you that your computer is at risk? It feels a lot like when your car’s check engine light comes on. If you don’t know what’s happening, it might cause you to panic. The Federal Trade Commission (FTC) wants you to know, a pop-up on your computer is probably a scam. The scam artists want you to panic, and click on the handy link they provide.

What do the fake messages say? They may tell you your computer is insecure, that it’s been hacked or infected, or is having performance problems that can be expensive. The warning may include a loud alarm, or a voice recording that starts when the pop-up appears.

What should you do? The FTC says, absolutely do not open the ad. It’s a scam. If you click the ad — even just to close it off your screen — your computer will be hijacked and someone else will have control.

The ad may tell you to call a phone number for help. The thieves on the other end will claim to be from somewhere like Microsoft or Apple, and they’ll say they need to “walk you through” giving them control of your computer so they can fix the problems. Actually what they will do is install harmful changes on your computer.

The FTC says, if this happens to you, don’t open the ad, don’t click “no,” or “cancel” or exit out of the site by clicking the right hand corner. Better to save your work (if you can) and turn off the computer. Or if you use Windows, press Ctrl + Alt + Delete to open your Task Manager, and click “End Task.” If you use a Mac, press Command + Option + Q + Esc to “Force Quit.”

Phone version: The same scam often originates with a phone call. I’ve gotten three such calls in recent weeks. My mother, who doesn’t own a computer, has also gotten them.

What do they say? A voice (usually) with a heavy foreign accent says he or she works for the company that made your computer, and they have received an alert that something is terribly wrong with your computer. But have no fear! The caller will fix it. But to fix it, he will have to walk you through the process of you giving him control of your computer.

What should you do? The FTC says you can just hang up. I like to tell the caller, “Okay, but this sounds important so I want to record the call.” That results in an instant hang up on their end.

What should you not do? Absolutely do not press any buttons, on the phone or computer. Even if the call says you can opt out of future calls by pressing a button, don’t. Remember these are thieves and pressing any button may be giving them permission to bill you somehow.

If you’re so inclined, you can log onto FTC.gov and register a complaint. Don’t expect to hear back from the FTC, as they are flooded with cases. But getting these reports helps them track how frequent these scams are.

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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