Tips for Charitable Deductions

Fall is a season when many people are cleaning out garages, basements and closets. If you are not having a garage sale and some items look too good for the dump or if you do have a garage sale, but have some items left over, consider donating them to charity. You can get a tax deduction for whatever the item is worth.

When you contribute non-cash items to charity, be sure to retain your receipts. Also keep a list of items donated and an estimate of their value. Some of the charities, such as Salvation Army, have a listing of clothing items with a range of suggested values you can use to determine the worth of your donated goods.  There are also computer programs available online for little or no cost that will help you value your contributions. The IRS has become stricter on charitable donations including non-cash contributions. Therefore, including more detail or better yet- taking photos of the items contributed is a good idea especially if it is a substantial amount.

If you are considering a large cash contribution, a better option may be a gift of appreciated stock to a charity. You will be able to deduct the fair market value of the securities, without having to recognize the increase in value as a gain on your tax return. If you take the cash you intended to contribute and move those funds to your investment account, you’ll be left with more money in your pocket at the end of the day.

Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Solving The Equation – Should Kids Help Pay College Tuition?

College expenses continue to rise, and paying for these expenses presents challenges for most families. For those of us who have been down that road, we know the cost of a college education can be staggering.

Because of these high costs, parents have debated for many years whether children should help pay for their college education. While there may not be a clear right or wrong answer to this question, both options have points to consider.

Kids Helping Pay
The old adage of having “skin in the game” applies here. The general thought is that children who are helping to pay for college will be more aware of the costs involved and more likely to take education seriously. They might be more careful about their chosen major and the classes they take, rather than dabbling in various topics of interest without choosing a clear path.

Helping pay for their tuition can also give students a great feeling of responsibility and maturity. After all, they are on the path to independence. In fact, this point is seen as such a positive that many college graduates include the percentage of college expenses they paid on their resume. It’s a way for them to show potential employers that they are adults and are ready for the challenges of the real world because they have experienced the real world of paying for college.

Another point to consider is whether the parents have the means to fund the college education. Many parents, even those who have diligently saved, have seen their incomes cut and their investments deteriorate. Unfortunately, they may no longer be able to pay for the entire experience. If their child wants a college degree, there may be no other choice but for the student to participate financially.

Many financial advisors advocate that parents be sure to prepare for their retirement first before they use all their excess funds to pay for college – better for the students to have school loans than have to take care of their parents financially after retirement.

Parents Footing the Bill
Many people say parents should pay the entire bill for college so that students can focus on studies and do their best with their academic endeavors. Carrying a full load of college classes is, in some ways, a full-time job in itself. For every hour of classroom time, students may need to spend one to two hours outside of class. So a 15-hour class schedule could easily translate into 40 hours of class and study time.

Others believe that a student’s stress level is greatly increased when they have to worry about their finances in addition to classes. They may also miss out on college activities, which some say is a major part of the college experience.

Another consideration is the parent’s income and asset levels. Many financial aid applications require this information. Students may not be able to receive substantial aid because the parents are deemed to be in a position to contribute a large percentage of the costs.

Finally, students who pay for their own college experience will likely enter adulthood with a large amount of debt. They will have to pay back thousands of dollars over 15 to 20 years, possibly delaying their ability to purchase or rent a home. This may result in their moving back in with their parents after college so that they have the funds necessary to repay their school loans.

Rising Cost of Tuition
At our firm, we have many young couples beginning their families.  My advice to them is to start saving for college early and often, possibly by starting 529 plans such as College Savings Iowa.  According to the US Department of Education, since 1978 the cost of attending a public or private college has tripled, with tuition increases rising at an average of double the general inflation rate.  So, who should pay for what? Well, whether the parents pay the entire bill or have the kids pay a portion of the tuition will, most likely, remain an unsolved equation due to many variables.  However, the important part is to start discussions early with your student, so everyone knows the plan and expectations. Let the savings begin!


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Five Tips for Healthy Business Growth

Believe it or not - how you grow your business can sometimes be just as important as whether your business grows.

Business growth carries with it a certain amount of risk.  To avoid potential pitfalls, consider the following tips for successful growth.

1. Find your key focus.  It is important to select and stick to a key focus, particularly in times of an uncertain or slow economy.  Do what your company is good at.  Produce the products that can be delivered consistently and successfully.  It’s harder to add new services or venture too far outside your scope during a recession.
   
2. Don’t become overconfident.  Like a favored team that lets down its guard and loses to an underdog, an attitude of overconfidence can bring about business loss.  Owners who have had success in the past must guard against gaining a sense of omnipotence.  Overconfidence is unrealistic and can spell disaster.
   
3. Don’t define your business by your products or services.  Virtually any product or service can become obsolete over time.  Don’t define your business  by your product, but rather from your customer’s needs that you are able to satisfy.
   
4. Make your marketing message consistent.  If you want to grow your company, marketing is essential.  How you market is important.  A key way to grow your business is to have a consistent marketing message.  In today’s complex world, marketing messages have to be very simple, direct and constant.
   
5. Practice what you promise.  Customers will be the most intolerant of mistakes when money and time are tight.  For example, if your marketing campaign promises a certain turnaround time, you need to live up to that promise.  Otherwise, you risk reducing your customers’ satisfaction or possibly losing customers altogether.   

Practicing these few steps and being proactive can help you achieve a healthy business growth.


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Some Relatives Are Easier To Deal With Than Others

If you are like most people, one of the last things that is probably on your mind during the month of June is taxes. After all, tax season ended two months ago, and well, we don’t have to deal with that “less than favorite” relative, Uncle Sam until next year – right?  Well not so fast.  With the Bush-Era Tax Rates scheduled to expire December 31, 2012, a little tax planning for you and your business now, could save you money and be well worth the effort later.  Following are changes that will occur should the current tax rates expire, along with a few tips to help you minimize your tax liability.

Changes as the Bush-Era Tax Cuts Expire:

• Tax Rates: Tax rates for individuals will remain at 10%, 15%, 25%, 28%, 33% and 35% for the duration of 2012, but will revert back to 15%, 28%, 31%, 36% and 39.6% in 2013.
• Capital Gains Maximum Tax Rate: This tax rate is currently at 15%.  However, similar to marginal tax rates, the capital gains rate will increase to 20% in 2013.
• Qualified Dividend Income: Dividend Income is taxed at the same rates as capital gains (maximum rate of 15%). However after December 31, 2012, dividends could be taxed at a rate as high as 39.6%.
• Itemized Deductions: Throughout 2012, itemized deductions will remain the same.  However in 2013, a phase-out of total itemized deductions is scheduled to be implemented.  If this had been in effect for 2012, it would have been applicable to taxpayers with an adjusted gross income greater than $173,650.  (This amount adjusts for inflation.)

Tax Planning Tips

• Get Organized: You need to keep close track of your deductible expenses through the year.  If a pile is starting to accumulate, take the time to sort through your receipts and file accordingly.  A little organization now, will save you hours at tax time, and allow you to accurately estimate your expenses for a tax projection and planning.
• Manage Your Adjusted Gross Income: Many tax breaks are based on your adjusted gross income (AGI). Several breaks are available to you dependent on your AGI, such as the child tax credit, rental real estate loss allowance, education credits and deductions, and other tax breaks.
• Set Up and Contribute to a Retirement Plan: If you own a business, you can save for retirement through a tax-advantaged plan.  For instance, you may establish a Savings Incentive Match Plan for Employees (SIMPLE) or a Simplified Employee Pension (SEP) with relative ease.  This will allow you to plan for your future and reduce your tax liability.
• Hire Your Child: If you are self-employed, you can hire your child which shifts income from your tax bracket to their tax bracket.  You will also have payroll tax savings if your child is under the age of 18 and the child will be eligible to contribute to an IRA.
• S-corporation Losses: An S-corporation’s losses are deductible by the corporation’s shareholders up to the amount of the shareholder’s basis in his or her corporate stock.  If it looks like your S-corporation will show a loss for the year, make sure that you have sufficient basis in your S-corporation stock to take advantage of the loss deduction.
• Capital Gains: As stated above, the anticipated capital gains tax rate is set to be at least 20% in 2013, so if you are considering selling highly appreciated stock it might be wise to do it before year-end at a lower tax rate of 15%.

These are just a few items to assess during a mid-year business review.  There are more.  But taking the time to meet with your CPA and discuss the items listed above will ensure you have a good understanding of your company’s financial situation and the information needed to minimize your tax liability….and make your interactions with Uncle Sam go “relatively” well.

Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Identity Theft Is On The Rise For Women

According to a study of more than 800 households by Affinity Security Center, 28% of women interviewed said they had been the victim of some level of identity theft fraud compared to 21% of men.

Why is it that women fall victim to identity theft more often than men?  Is it because we are more trusting by nature or perhaps more careless with our personal information?  Not necessarily either. 

While many factors contribute to the disparity between men and women, according to the study, one of the biggest factors is on-line shopping.  Surprisingly, this digital commerce (purchasing on-line) with built-in technology safeguards, actually makes identity theft more difficult to pursue.  Because men engage in more on-line shopping over real world retail, they are actually less prone to identity theft and fraud.

Women, on the other hand, tend to have more in-person transactions with restaurants, salon, grocery and store purchases.  The report found that most fraud attacks against women occur through in-person purchases, where there is less consumer-control.   The report also showed that women are less likely to discover and report the fraud in a timely manner, which unfortunately results in taking longer to restore their identity.

In a separate study by the Identify Theft Assistance Center, about one fourth of all cases of identity theft are committed by a friend, family member, acquaintance or in-house employee.  Lost or stolen wallets, checkbooks or credit cards account for about 15 percent of fraud, with mail/trash fraud trailing close behind at 11 percent.

For more information on what to do should you become a victim or to help prevent you from becoming a victim, you can visit the Federal Trade Commission site at www.ftd.gov.   No one is immune - which isn't to say, that we're powerless.  There's a lot we can do to deter, detect, and defend ourselves against identify theft. 




Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

What's Your Dream?

Have you ever dreamed about owning a business? Many people have. Maybe you have dreamed about starting a catering business or owning a quilt shop or a coaching/ consultant business. According to the Small Business Administration, there are more than 27 million small businesses in the US. It is no wonder small businesses are often thought of as the backbone of America and why many financial analysts say they are the vehicle which is driving us out of an economic downturn.

Well before you hang your shingle above the door of your new shop….here are six tips that will help you get started on the right foot.

1. Create a business plan. While it may seem daunting at first, a business plan will help you gain a better understanding of your industry structure, competitive landscape, capital requirements and more.
2. Decide what business entity is right for you. The most common types of business are the sole proprietorship, partnership, LLC, corporation and S corporation. Each of these entities has different tax requirements, so determining the right entity for you is of key importance.
3. Obtain an Employer Identification Number (EIN) which is used to identify a business entity. Most businesses need an EIN, although some do not.  Visit www.IRS.gov for more information. If needed, you can apply for an EIN online. Also be sure to register with the state you are doing business in.
4. Determine what taxes you must pay and how you will pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and sales tax.
5. Keep good records. This will help ensure a successful operation of your new business.  You may choose any record-keeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need for federal tax purposes.
6. Adopt a consistent accounting method. Each taxpayer should use a consistent accounting method which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and accrual method.

Owning your business can bring you countless rewards and help you live your dream. For more information on how to get your business started, it is best to consult with your CPA. She will be able to help you avoid many of the mistakes first time business owners make, and help you achieve success with your new business.


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

What Goes Down, Will likely Go Back Up Including Payroll Tax Cuts

If you’re like me, you might have been holding your breath just a bit as Congress debated as to whether or not to extend the payroll tax cut extension for the remainder of 2012.  And of course, the good news is...they did.  Actually, I found it quite refreshing as both sides of Congress put differences aside in a rare display of bipartisanship and chose to do what was right for the American people.  Good for them.  Good for us!

The original payroll tax break in 2011 cut 2% from payroll taxes used to pay for Social Security, lowering the tax rate for 160 million Americans. The tax break was extended for two months at the end of last year.  And last month, under the Middle Class Tax Relief and Job Creation Act of 2012 workers will continue to receive larger paychecks for the rest of this year based on a lower social security tax withholding rate of 4.2%. No action is required by workers to continue receiving the payroll tax cut, and as before, the lower rate will have no effect on worker’s future Social Security benefits. The reduction in revenues to the Social Security Trust Fund will be made up by transfers from the General Fund. 

For an employee earning $50,000 a year that means keeping an extra $80 a month in take-home pay. For higher-income employees, that extra income could be as high as $2,200 a year, and with the rising cost of groceries and gas, well it certainly can’t hurt.  In addition, more people spending more money will add a needed boost to a sluggish economy – which was the initial intent of the tax cut.  But beware.  The tax cut is still temporary and once it has expired, and our paychecks have been reduced, we may find it harder to adjust our spending back down.

It’s not that we consumers are necessarily consciously choosing to spend the extra cash. In all likelihood, we may not even have noticed the difference in our paychecks. It’s just that money tends to be spent unless we make an effort to set it aside.   While saving is never as much fun as spending, we might consider using that extra money to pay down high-interest debt, increase contributions to flex or health savings accounts, or since it is Social Security tax money, we might think about adding to our retirement accounts.  The important thing to remember is that this payroll tax cut is only temporary and will most likely be adjusted accordingly next year, and that could mean a decrease in our take home pay.


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Five Ways To Show Your Business Isn't A Hobby

You've always been attracted to beautiful jewelry.  Most women are.  But you are so interested in it that you have taken several classes and have begun designing and creating some rather stunning pieces...even if you say so yourself.  And so you think...wow, maybe I should quit my job and make this hobby of jewelry making into my business.  That would be so much fun!  I could run my hobby-turned-business right from my home and best of all...make money too.
Yes it is true, home-based businesses can be lucrative and business owners may deduct operating expenses incurred.  But beware.  The IRS is not one to be "bedazzled" by businesses that show consecutive years of losses as they continue to deduct their expenses.  As a business owner, it is up to you to show you are running a for-profit business in order to deduct losses.  Here is a list of five things you need to know if you wish to turn your hobby into a business.

1. Operate in a Business-like Manner - At a minimum, you should have business cards, invoices and a business banking account.  Keep your business accounts completely separate from your personal ones.  For a home-based business, a separate area of your home should be dedicated to your company.
2. Register your Business - Make sure you register your company and it complies with all local business rules.  Many cities and states require every local business to obtain a tax registration certificate.  Obtaining the permits and paying taxes give the IRS additional reasons to classify the hobby business as a legitimate business activity.
3. Attempt to Show a Profit in at least 3 of the 5 Years - One popular test for determining a profit motive is called the "3 out of 5" test.  Attempt to show that your business made a profit for at least three out of every five years of operation.
4. Continue with Education - Educate yourself in your industry or field.  This will show you have the relevant knowledge to successfully run a business and market the product or service related to your interest.
5. Promote and Market - Most businesses advertise their products or services in some manner.  Make sure you maintain copies of advertising collateral so you can show it to the IRS.

Obviously the guidelines are in place so people do not abuse the tax system.  If your business is audited and the IRS determines you are just spending money on a hobby or using your deductions to minimize your tax liability, you can be subject to penalties and fines.  The deciding factor in determining if your hobby is a bona-fide business is to show the IRS that you are trying (even if you are not necessarily succeeding) to make a profit with your venture.  Your tax professional can help you make sure all measures are in place to help your business succeed and avoid those IRS red flags.


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Five Steps to a Strong Succession Plan

More than 90% of businesses in the United States are family-owned, but fewer than 30% make it to the second generation.  And less than 12% make it to the third generation.  The key reason cited for failure of businesses to transition to the next generation is simply because no business succession plan is in place. In fact, recent surveys show that only 30% of business owners have a succession plan.
 
Whether your business has been in the family for years or you are building it from the ground up, it is critical you develop a succession plan.  Most experts agree that succession planning should begin anywhere from 10 to 15 years before retirement. Even if you are one of those people who believe you never will retire, a succession plan is still needed in the event something unforeseen happens to you, such as a serious illness, disability or even death.
Here are the five key steps to succession planning:

Identify what’s important to you. This means deciding, at least generally, how you wish to spend the rest of your life as well as what you want to happen to your business. Consider holding a family meeting to engage in an open and honest discussion regarding your goals and objectives. Failure to do so may lead to unfortunate and contentious situations that could tear apart not only your closely held business…and your family as well.

Decide who is most capable of running your company. If you have more than one potential successor, consider giving each candidate responsibility for the part of the business for which he or she is best suited.  Look beyond your heirs for the most competent successor. Sometimes key employees may be a viable option through an Employee Stock Ownership Plan (ESOP). If you cannot think of anyone qualified to assume control, you may be better off selling to a third party.

Develop a mentoring program. Your goal is to ensure that your business will continue to run successfully without you. That’s why it is important to spend time grooming your successor to be sure that he or she has thorough training and quality leadership experience. You should even consider seeking this person’s input in the development of the plan. While mentoring your successors, you should also transition your relationship with your customers and suppliers.

Document your succession plan. With the help of your accountant and attorney, write down every detail of how you would like your company transitioned. Your strategy should include choosing the right amount of insurance, maximizing valuation discounts to reduce the tax implications and developing a buy-sell agreement. Share this document with all interested parties – especially family members. Be sure that your succession plan is in alignment with your other estate planning documents including wills as well as the titling of assets and insurance policies. All too often, a succession plan cannot be implemented as intended because it conflicts with these other items.

Review the plan regularly. Do not file your succession document away and forget about it. Changed circumstances – such as rapid company growth, the departure of a potential successor and even significant changes in tax laws – are some situations that may require your original plan to be updated and revised.

Developing a business succession plan should not be done in a vacuum. It requires communication among your family members as well as the team of financial and legal advisers involved in the process. When developed and implemented properly, it can help provide financial security for you and your family for generations to come.
If you would like more information on assistance in developing your business succession plan, please give me a                call at 515-288-3279.

Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Seven Ways Your CPA Can Help Grow Your Business

As a business owner you already know that growing your business doesn’t just happen by accident.  It takes hard work and patience, a bit of creativity, a little luck…and sound financial insights.  This is where your CPA can help.  The following are different ways MHC&S can assist you in meeting and exceeding your business goals.

1.  Budgets and Projections

The key to achieving the financial goals of your company is accountability. The first step is the creation of budgets and projections. The second step is to hold individuals accountable for maintaining those budgets and achieving the company’s goals. Your accountant should help you develop budgets and projections, as well as measurable goals to insure accountability.

2.  Fraud Risk Management

Implementation of solid internal controls is the best way to minimize the risk of fraud, embezzlement and other improprieties within your company.  No one ever hires employees thinking they will be dishonest; however the reality is that employee theft results in a significant amount of lost profits for companies every day, especially in small business.   Establishing and monitoring internal controls for your company will reduce such risks and help maximize profits for your company.

3.  Profitability Enhancement

There are three ways to enhance a company’s profitability: increase revenues, decrease costs, and improve the quality of life of the company owners. When people think of profitability enhancement, they automatically think of a higher bottom line, but what if your accountant came to you and said “I can help you increase your gross revenues and possibly reduce the number of hours you work?” Most people would jump at such an offer. Strategic business reviews can help you identify the factors that impact your business profitability.   

4.  Benchmarking and Results Analysis

You may believe your business methodology is the best. However, what if you became aware that your competitors were operating with significantly higher gross profits, lower operating expenses and higher bottom lines? Most companies would immediately ask “What are we doing wrong?”  Your accountant can be a key resource for specific benchmarks that apply to your industry segment and region.  

5.  Tax Planning

The old adage that “people don’t plan to fail, they fail to plan” is never truer than when addressing tax planning. Tax preparation and tax planning are two distinctly different things.  Unfortunately many business owners do not see their accountant until after the end of their fiscal year.  In many cases this is too late to take advantage of tax planning strategies that could reduce tax liability.  In order to be successful, the majority of tax planning needs to be implemented over the course of the year and monitored regularly. 

6.  Evaluation of Employee Benefits

You recognize that your employees are the primary reason why your company is successful. Therefore, when the company has the opportunity to financially reward its employees, create significant write-offs for tax purposes, and increase overall employee moral, then the employee benefits plan is a win-win situation. Your accountant can help you evaluate your options.

7.  Succession Planning

Most business owners have a good understanding of how their company operates and are confident they will continue to be successful for as long as they are at the helm. However, not all business owners have planned for the company’s continued success after they retire. Whether your intent is to pass your business down to your own children, turn over the operations to key employees or sell your business outright to a third party, you should begin planning this transition. There are many tax saving strategies that will ensure your company continues to operate and provide for your financial security. 

Owning a small business requires a strong commitment and having the right financial resources in place.   Your CPA can help you address your business challenges, navigate the field of financial decisions and provide you with the services needed to grow your business.  At MHC&S we are here to help you reach your goals.


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

"Relatively Speaking" - Hiring Your Kids Is a Great Idea

How often do you hear…“Mom, I need some new jeans”...or “Can I have money to attend the Rascal Flats concert”…or worse yet, “I’m Bored”!  Well if you are a small business owner, you can change all that with two simple words, “You’re Hired”.

Hiring your children (ages 7 to 17) to work in your small business may be a great tax savings strategy for you, and at the same time teach your children career skills, money management skills and responsibility – a win-win situation for all.
 
The first rule to remember when hiring your children is to make sure the work they are doing is necessary to the business.   It must also be age-appropriate, and you must pay them reasonable compensation for their time and effort.  In general, treat them like you would any other employee.  This may mean your child receives a job description, punches a time clock or completes a time sheet, is issued a W-2 form, and perhaps even attends training sessions and staff meetings like other employees. 

It is important to maintain excellent records documenting the work they have done and substantiating the amount paid should there ever be an audit.  If these items are met, you may be eligible to receive tax benefits that will help decrease your tax liability and at the same time provide some financial resources for your child.   

When you hire your child to work in your small business some of the tax and financial benefits you receive include:

           -  A tax deduction for you, the business owner.  You get a tax deduction for the wages you pay your child which reduces your taxable income.   For example, let’s say you and your husband are in the 28 percent tax bracket, and you hire your 16 year-old son, Michael, to work full-time during the summer and part-time throughout the school year.  Michael’s total compensation for 2010 was $9,700, and he has no income from any other sources.  You will save about $2,700 (28 percent of $9,700) in federal income taxes.

 
          -  Reduced self-employment tax.   By using an LLC or any form of business entity other than a corporation, you will enjoy some Social Security tax savings by employing your child.  The Federal Insurance Contribution Act (FICA) tax rules do not apply to services performed by a child under the age of 18 while employed by a parent. 

 
          -  Income shifts within the family.   You shift income from your higher tax bracket to your child’s lower tax bracket which saves taxes for the entire family.

            -  Building your child’s savings.  Paying your child a wage allows them to open an IRA or a Roth IRA, which gives them a jump start on saving for college, a house or even their own retirement.

So… if you are tired of hearing your child complain they are bored or are short of cash, hire them and let the complaints end, and the productivity and tax benefits begin. 


Kathi Koenig, CPA
Partner - McGowen, Hurst, Clark & Smith, P.C.

Identity Theft is on the Rise for Women

According to a study of more than 800 households by Affinity Security Center, 28% of women interviewed said they had been the victim of some level of identity theft fraud compared to 21percent of men.

Why is it that women fall victim to identity theft more often than men?  Is it because we are more trusting by nature or perhaps more careless with our personal information?  Not necessarily either.   While many factors contribute to the disparity between men and women, according to the study, one of the biggest factors is on-line shopping.  Surprisingly, this digital commerce (purchasing on-line) with built-in technology safeguards, actually makes identity theft more difficult to pursue.  Because men engage in more on-line shopping over real world retail, they are actually less prone to identity theft and fraud.

Women, on the other hand, tend to have more in-person transactions with restaurants, salon, grocery and store purchases.  The report found that most fraud attacks against women occur through in-person purchases, where there is less consumer-control.   The report also showed that women are less likely to discover and report the fraud in a timely manner, which unfortunately results in taking longer to restore their identity.

In a separate study by the Identify Theft Assistance Center, about one fourth of all cases of identity theft are committed by a friend, family member, acquaintance or in-house employee.  Lost or stolen wallets, checkbooks or credit cards account for about 15 percent of fraud, with mail/trash fraud trailing close behind at 11 percent.

For more information on what to do should you become a victim or to help prevent you from becoming a victim, you can visit the Federal Trade Commission site at www.ftd.gov.   No one is immune - which isn't to say, that we're powerless.  There's a lot we can do to deter, detect, and defend ourselves against identify theft.



Kathi Koenig, CPA
kkoenig@mhcscpa.com
www.mhcscpa.com