Life Insurance Myth

Tax-related fraud and identity theft have continued to grow, with millions of people becoming targets. Scammers need little more than your Social Security number and other general information to file a fraudulent tax return and hijack your tax refund. Taxpayers typically don’t discover the fraud until they attempt to file their own returns, which is why it's essential to file taxes as soon as possible. At the same time, you may want to confirm the appropriate timing with your tax professional. Although 1099s are due by the end of January, custodians may correct 1099s throughout February. If drastic changes happen to a 1099 after you file your taxes, the change can severely impact the amount you owe.

Here are some helpful ways to prevent your SSN from being compromised:

• If you have been a victim of identity theft, complete  IRS form 14039, identity theft affidavit.
• Respond immediately to any IRS issued notice once you verify the authenticity of the notice. You can do so by calling the IRS directly at 800-908-4490 or setting up your  online account.
• Get an Identity Protection PIN: a 6-digit number that prevents someone else from filing a tax return using your Social Security number or individual taxpayer identification number. Only you and the IRS know the IP PIN.

Giving to charitable causes can be a very emotional thing. You’re supporting something near to your heart, possibly with a deep personal connection. However, if you’re not mindful, it is possible to give at the expense of yourself. Be sure you don’t let your heartstrings control your purse strings.

Forethought and planning should extend over all your financial decisions, including charitable giving. For a variety of reasons, many don’t follow a plan. Some give whatever’s left in their budget, perhaps not as much as they’d like or tempting them to give more than they can afford. Others give at the end of the year for the tax break. Alternatively, perhaps charitable giving isn’t planned for at all, which allows one to be swayed by emotion when the right cause comes along. Suddenly, they can be committing based on what they feel rather than what’s best for their finances.

Once you decide to factor your charitable giving into your annual financial plan, you can start doing your research. Not only do you determine which causes you want to support, but you can also investigate various organizations that service that cause. There are many websites that evaluate charitable organizations to ensure that your financial contributions or going where you want. Additionally, having your charitable giving worked into your financial plan allows you to turn down other charitable requests graciously. Should you be approached, you can mention your annual giving plan and that you will consider them for the following year.

Being mindful about your charitable giving also gives you the opportunity to influence your children or loved ones on how to do the same. Your actions become the example to your values. While you needn’t share all the details, you can openly share how you formulated your plan and why. The more people who become aware of how to consciously create an annual giving plan, the more people are actively working towards their financial independence.

I don’t think it’s possible to take all emotion out of your connection to a charitable cause, and I don’t think you should. However, I will always be an advocate of folks proactively working towards their financial independence. The key to that is approaching your finances with reason and logic, relegating our emotions to the backseat and holding firm to your purse strings.