With identity thieves continuing to target the tax community, the IRS is urging you to learn the new signs of identity theft so you can react quickly to limit any damage.
The common signs of ID theft
Here are some of the common signs of identity theft according to the IRS:
In early 2022, you receive a refund before filing your 2021 tax return.
You receive a tax transcript you didn’t request from the IRS.
A notice that someone created an IRS online account without your consent.
You find out that more than one tax return was filed using your Social Security Number.
You receive tax documents from an employer you do not know.
Other signs of identity theft include:
Unexplained withdrawals on bank statements.
Mysterious credit card charges.
Your credit report shows accounts you didn’t open.
You are billed for services you didn’t use or receive calls about phantom debts.
What you can do
If you discover that you’re a victim of identity theft, consider taking the following action:
Notify creditors and banks. Most credit card companies offer protections to cardholders affected by ID theft. Generally, you can avoid liability for unauthorized charges exceeding $50. But if your ATM or debit card is stolen, report the theft immediately to avoid dire consequences.
Place a fraud alert on your credit report. To avoid long-lasting impact, contact any one of the three major credit reporting agencies—Equifax, Experian or TransUnion—to request a fraud alert. This covers all three of your credit files.
Report the theft to the Federal Trade Commission (FTC). Visit identitytheft.gov or call 877-438-4338. The FTC will provide a recovery plan and offer updates if you set up an account on the website.
Please call if you suspect any tax-related identity theft. If any of the previously mentioned signs of tax-related identity theft have happened to you, please call to schedule an appointment to discuss next steps.
Your business has a story to tell. And one of the ways to hear your business’s story is by reading through comparative financial statements.
The importance of comparative financial statements
An up-to-date balance sheet, income statement and statement of cash flows are essential financial reports you should consistently analyze. But these financial statements by themselves don’t tell the whole story about your business. Consider the following:
Company XYZ: The most current balance sheet shows $1 million in liquid assets with zero liabilities.
Company ABC: The most current income statement has a net profit margin of 35%.
Company 123: The statement of cash flows shows that the company has consistently brought in more cash than it has spent over the past three years.
And here’s the rest of the story:
Company XYZ: Liquid assets decreased from $5 million to $1 million over the past 12 months.
Company ABC: Net profit margin is typically around 20% for this company. However, a recent round of layoffs temporarily pushed total salaries and wages lower, while pushing the net profit margin much higher.
Company 123: There has been a steady decline in positive cash flow over the past three years.
These examples show the importance of analyzing your financial statements in comparison with something else. Reading through the first list of bullet points only tells part of the story.
What you can do
Here are several types of comparative financial statements you can create for your business and some tips for getting the most out of these reports.
Current period vs. Prior period. Compare this month to the same month one year prior (October 2021 vs. October 2020) or compare by year (2021 Year-to-Date vs. 2020 Year-to-Date).
Current period vs. Current period forecast. This is known as a variance analysis. You compare what you think was going to occur during a particular period to what actually happened. This report can also be done either by month [October 2021 (actual) vs. October 2021 (forecast)] or by year [2021 Year-to-Date (actual) vs. 2021 Year-to-Date (forecast)]
Use both absolute figure and percentages. Percentages allow you to quickly see the degree of change between the two periods that are being compared. Here’s an example of what this could look like:
Ask for help! Please call if you would like help creating or analyzing comparative financial statements for your business.
Meetings, phone calls, emails, text messages, and water cooler conversations with your employees constantly bombard you as a business owner. Freeing up even just another 15 minutes a day could dramatically improve both your workflow and peace of mind.
Here are some suggestions for getting back 15 minutes every day:
Use your phone. Whenever possible, use your phone instead of an email. Oftentimes talking with someone directly is more efficient than spending the time to compose an email. Plus, email chains can fill your inbox and require precious minutes to read and decipher. Using the phone can also help avoid potential misunderstandings, as a person’s tone of voice conveys information that may be lost or misinterpreted when shared via a written message.
Be brief with emails. Tech entrepreneurs Mark Cuban and Jeff Bezos are known for their brief emails that consist of only a couple words. In situations where you do use email, consider crafting a response that is only several words in length. And remember the golden rule of emails: send fewer emails to receive fewer emails.
Plan your meetings. Face-to-face time with colleagues, vendors, and customers is often productive and essential for growing a business. On the other hand, meetings can be a huge waste of time if not properly planned. Establish clear goals for a meeting in advance so your team can focus on priorities and get back to work.
Minimize distractions. Business owners enjoy developing a rapport with their employees. These personal conversations, however, need to have boundaries so that both you and your employee can stay on task. Tell your team if there’s a day you don’t have time for small talk. Consider putting an old-fashioned Do Not Disturb sign on your door when you need to get things done.
Delegate when possible. If you’re a small business owner who built a company from scratch, you may be reluctant to relinquish control over day-to-day operations. But failure to delegate can sap time from more important tasks like planning, building relationships with key vendors, and growing your customer base. So develop a plan to train your employees to assume more responsibility over time.
Fifteen minutes may not seem like much, but a busy business owner can work wonders with just a little more time every day.