Tax Refund Scammers Are Starting Early This Season

As part of our ongoing efforts to help keep your personal information as safe as possible, we want to remind you to stay on the lookout for the many e-mail, text message, and voicemail scams making the rounds in cyberspace today.

Tax return scammers are starting their season early! Recent fraudulent activity has involved e-mails and phone calls claiming to come from the IRS regarding tax refunds. Some fraudsters have been asking for sensitive refund information over the phone or using e-mails stating that someone has filed for the recipient’s refund and that he or she needs to click a (malicious) link if he or she did not file for it. Common characteristics of the scams include:

· The criminal may use a fake or common name and make up taxpayer identification information.
· The scammer may know certain information about the recipient, such as the last four digits of the recipient’s social security number or personal e-mail address.
· The scammer may spoof his or her phone number so that appears to be the IRS’s toll-free number and mimics actual IRS calls—complete with phone conversations going on in the background.
· The criminal may follow up phone calls with e-mails to appear legitimate.
· The scammer may threaten the recipient and scare him or her into falling for the scheme. Such threats may include driver license revocation, pretending to be a police officer, and so on.

Any phone calls or e-mails regarding your tax refund or that contain the characteristics listed above should automatically raise a red flag. Do not provide any information to the caller, click on any links, or open any attachments.

What to do if you receive a suspicious e-mail or phone call
If you receive an e-mail or phone call asking for information regarding your tax refund, please delete it from your inbox immediately—or hang up on the caller—and don’t click on any links, open any attachments, provide any information, or reply to the sender. Links and attachments could potentially install malicious software onto your computer, and the sender or caller could use your personal sensitive information to steal your identity or actual tax refund.

Protect yourself
Keep in mind the following if you receive any suspicious phone calls or e-mails regarding your tax return:

1. As noted above, don’t click on any links or attachments within an e-mail.
2. Do not provide any information to the sender or caller if it is asked for. Immediately hang up or delete the e-mail.
3. Call the IRS at 866.562.5227 if you are unsure of the legitimacy of an e-mail or phone call.
4. Prepare and file your tax returns as early as possible. This will take away the scammer’s ability to file and steal your return. This will also help you in detecting whether a call or e-mail is fraudulent or not. If someone claims you need to provide him or her with information to file your return, and you have already filed your return, you will know that the request is fraudulent!
5. If you access a dangerous attachment or link, and believe a password-stealer is running on your computer, get in touch with a technology specialist.
6. All unsolicited e-mails concerning password or account changes to any of your online accounts—especially unsolicited e-mails that contain attachments—should be considered scams until verified. Open a new browser and log in directly to the account in question to check the situation.
7. Refer to the IRS’s “Dirty Dozen Tax Scams for 2013” to get the 12 most common scam types that have seen going around.


Rest assured that we are always concerned about information security. If you have any questions, please contact us at 949.333.6394

Healthcare- What You Need To Know

Presented By: Nick Bautista

It's that time of year. The time when you must select your health care plan for next year.



Being that the open enrollment period is upon us for employers it's good to review the basics of what Health insurance coverages mean. With all the recent changes in Health Care you may be thinking what happens to your health insurance as you go to choose a plan for 2014.

Well... Not much, as the employee based plans won't see much change. But maybe you are asking, what they heck do all the health coverages mean again, I don't know which one to choose?

Know the basics

Deductible - The amount you pay the insurer to start insurance coverage for whatever you need. For example if you have a $200 deductible and need a $10,000 surgery of which your insurance will cover 80% of the cost, then you would have to pay your deductible before the insurance company started paying their 80%.

Coinsurance amount - is the amount the insurance company splits the cost with you, which is usually 80/20, meaning your insurance company will pay 80% of the cost while you cover the 20% after the deductible is paid.

Maximum Out of Pocket - The maximum you will pay for any procedures (surgeries, the like) after the deductible. In the previous example if your maximum OOP was $1,000, after you pay the $200 deductible you would be responsible to pay 20% (co-insurance amount) but would only pay up to your maximum Out of Pocket, which would be in this case $1,000.

Premium - Cost of coverage, either you pay, your employer pays or you share. This is usually a monthly cost.

Copay- The amount you pay when you visit a Doctor.

HMO – think of a gatekeeper. You must visit your primary doctor to have access to other specialist, through a primary doctor referral

PPO – Go direct to the Doctor, no gatekeeper.

Knowing these basics give you a better idea on which insurance to choose. A rule of thumb is that if you are young and healthy a high deductible is likely best being that you won't have much need to see a Doctor as would a 60 year old. Keep in mind that if you do have a high deductible then you should have the cash in reserves, if you did have a health event, to pay for the high deductible cost.

One last thing to do is call your primary doctor before you switch coverages so that you know they will accept your new insurance. Don’t let health insurance and the new laws scare you, give us a call if you have questions.

Who’s Rich Anyway?

Presented By Nick Bautista

Think about this, in the US the top 20% households make $107,628 annually. If your networth is more than $415,700 you are also in the top 20%. Here is the total breakdown:

Household Income Annually
Top 1%	$521,411
Top 5%	$208,810
Top 10%	$148,688
Top 20%	$107,628

Household Net Worth
Top 1%	$6,816,200
Top 5%	$1,863,800
Top 10%	$952,200
Top 20%	$415,700

WSJ: 2012 data from Tax Policy Center
 

To put this into further perspective what is considered the poverty line for a two person household is $15,510. Meaning that a two person household making $46,530 makes 300% more than someone in poverty.  (http://aspe.hhs.gov/poverty/13poverty.cfm)

So who is rich anyway? This week I was reminded that the little things in life are what matter most. I read an interesting article about Brett Favre. When asked if he would return to the NFL with all the injuries to key quarterbacks, he simply said no. A man who made millions upon millions (top 1%). He thought he put his family on hold for 20 years and couldn’t stand the idea of putting them off any longer and he gets to fulfill being with them doing the things he loves, which actually isn’t football related. I found that refreshing, that someone who was defined by their work became something more, a father. No matter how much money he made he ultimately valued the things money and fame couldn’t buy.
 

What are you striving for today, this week, or in life? Do you have more than you need, or do you constantly need the next best thing? We all, including myself need to be reminded that what we have is enough. Don’t let money rule your life, for you might find out it’s not that satisfying.

 

Brett Farve article: http://espn.go.com/nfl/story/_/id/9872646/brett-favre-return-sources-saying-rams-reached-out

From A Six Figure Salary To Minimum Wage: A Story Of Bad Planning

Presented by Nick Bautista

Sometimes the stories we hear can mean more than words we read from any text book. Such is the case for Tom Palome. A man who was an executive earning a six figure salary most of his lifetime and now has to work two minimum wage jobs due to inadequate savings.  I define the unretired 77 year old as a failure to plan. He had a total of $90,000 saved for retirement. All I can think is, really? Of course, he can still enjoy life but how would you like to live to 77 and be flipping burgers instead of pursuing the dreams you have had your entire life?

To me it comes down to the most fundamental question of all. How much do you need in retirement to live the life you want to? As of 2011 the median retirement account had a value of $120,000. So tell me how that works for 30 years in retirement?

Maybe Tom Palome can help you get a better picture of what that looks like. Read the entire story here…

http://www.businessweek.com/articles/2013-09-26/former-executive-tom-palome-spends-his-retirement-flipping-burgers

Who Is Your Go-To Person For Financial Advice?

Presented by Nick Bautista 

Have you ever thought about the people in your life who you turn to for financial advice? Think about that for a minute. When you have a financial question, who do you call or text, and why? Is it because you perceive them to be smart, or wiser than you? Or is it simply because you believe they have the experience to handle your similar situation.

Whatever and whoever you listen to when making your financial decisions, there is one thing you should know. It goes back to the old saying you used to hear when you were a kid. “If Johnny were to jump off a bridge would you do jump too?” Although a ridiculous analogy for following what others do, the message is clear. Why do we blindly follow the advice from someone who doesn't necessarily know or understand our financial situation?

Okay maybe this doesn't hit too close to home or is just too simplistic. So instead, think of the first person you would ask if you had/needed medical attention, a gaping wound, would your parents or best friend know if you needed stitches and be able to do it right then if you did need them. Of course not, you would go see a doctor immediately. So why is it that in our financial need we turn to those who do not understand our situation?

Everyone agrees that finances are extremely important yet we automatically assume those around us with little or no experience can help us with our questions. No one financial situation is the same. Let me repeat that so it sinks in, no one financial situation is the same. Just ask any doctor and they will tell you how no one patient is exactly the same.  

So again I ask who do you ask for financial advice? How much experience do they really have and is it the exact same or similar situation you are in? If the answer is yes, then think one step further. Does your financial friend know if you should do a Roth Conversion or how much you should defer in 401k contributions to save on taxes now? Do they know how much you can contribute to your retirement in a given year based on your retirement plan? Do they understand the history of the stock market or the correlation between asset classes in a given time period, knowing what your allocation should be based on your age and amount saved already? Do they know your goals, and what the money is needed for in order to invest it in a suitable place? Do they know the effect on your retirement plan for buying that car or house you are thinking about?

If your answer is no to any of the above you are getting poor advice and ultimately the wrong answer. While your wound may be okay without stitches you don’t want to find out 30 years later you really needed them, or more importantly you were given the wrong financial advice and your retirement plan is now underfunded to meet your goals.   

10 Facts About Obamacare & How It Will Affect You

Presented by Nick Bautista

August has ended and we have four months until Obamacare goes into effect. So what is Obamacare?

The overall goal is to provide affordable health insurance for all U.S. citizens and reduce the growth of health care spending. Obamacare does not replace private insurance, Medicare , Medicaid or employer sponsored plans. Instead look to see small changes in the insurance landscape via these 10 facts:

      1. Starting January 1^st 2014, insurance will be sold on health insurance exchanges, although you can still purchase an individual plan through health insurance companies (through a broker)
2.    With the new exchange each state will now be responsible for its own health insurance marketplace
3.    Summary of benefits and coverage- will make it easier to compare cost for common items such as having a surgery, having a baby, etc.
4.   Already in effect but, kids under 26 are able to be on their parents health plan (whether they are married, living with them or not, full time student)
5.   No-cost preventive care coverage- get screenings, physicals, vaccinations at no cost (this may not be available on grandfathered policies)
6.   Already starting in August is the women’s preventive care services, which gives care to women for birth control, STI screenings and breast feeding. Also insurers can’t discriminate based on gender.
7.    No pre-existing condition limits in 2014. You cannot be turned down from individual plans for having a pre-existing condition. Note this doesn’t apply to group plans as group plans cancel out any pre-existing conditions you have.
8.   Medicare is working to close the gap on Medicare part D coverage. The program is meant to help you pay less for brand name prescriptions in the coming years.
9.    In 2014 you must have health insurance or you will be penalized, $95 per adult, $47.50 per child, up to $285 per family or 1% of your taxable income. (whichever is greater)
10.  Can’t afford insurance, there will be credits or subsidies for buying health insurance based on your income, based on these provisions: You're an individual making $14,856 to $44,680 or a family of four making $30,656 to $92,200, and You don't get coverage at work or have access to affordable coverage (meaning your plan costs more than 9.5% of your income).

Feel free to look at the Anthem Insurance website for more information, or contact me at nick@phillipswealthmanagement.com with any additional questions, comments or concerns.

Aim To Retire Comfortably, No Matter How Much You Make

Presented by Nick Bautista

When thinking about saving for retirement it is often forgotten that even if you don’t make a lot of money, you can still retire comfortably. Building saving habits and spending less than you make are some of the keys to success.

Too often I see young people not save any money when they get out of College, and this is usually the slippery slope to bad savings habits. The temptation to spend every penny made is so high that a majority of them don’t start saving until it’s too late. This unfortunately continues into adulthood as the thought of savings gets pushed to the side for a variety of reasons, (house, car, kids, kids’ college, etc.)

The principles for pursuing a comfortable retirement boil down to two simple rules.

         1.  Spend less than you make

         2.   Set aside money every paycheck no matter how much it is.

Doing both these things can help create good saving habits and help you get better aligned with your financial dreams.

So, think about how much are you saving in retirement; are you spending less than you make?