Lock Down Your Credit
The idea of locking down your credit with a security freeze still has not been adopted into law in 11 states. But they do have an option now, thanks to TransUnion.
The company is now offering a nationwide security freeze, allowing consumers to lock down their credit so identity thieves can't open new accounts in their names. The freeze will cost $10 to initiate, and $10 to lift temporarily or remove. If you've already been the victim of identity theft, TransUnion offers the service at no charge.
If you're in one of the 39 states with a law allowing the freeze, the typical charge is around $5.
States that have not adopted security freeze laws are Alabama, Alaska, Arizona, Georgia, Idaho, Iowa, Michigan, Missouri, Ohio, South Carolina and Virginia. In Arkansas, Kansas, Mississippi and South Dakota, security freeze laws exist, but they apply only after you've become a victim of identity theft. For more information on the TransUnion program, go to www.transunion.com.
Sell off the dogs—quick
Sometimes it's true you can have too much of a good thing. Case in point: this year's stock market. For many investors, some serious gains were made in 2007. But that could also mean a serious tax bill. Before 2007 ends, consider selling off some of those dogs to help balance the sheets. The approach is called "tax-loss harvesting."
If you're trying to offset capital gains with this tactic, there is no dollar limit. In other words, if you saw $10,000 in gains from stocks and you sold stocks that represented $10,000 in losses, you could avoid paying capital gains on the winning stock. You can even offset as much as $3,000 in net losses against your ordinary income.
Cautionary note: Don't sell a stock and buy it back within 30 days. The IRS can then say the sale was strictly done to avoid paying taxes. And no one wants to do that, do they?
Drought counties can still defer gains
Livestock sales made in 2002 or 2003 continue to be eligible for deferral due to drought. Those producers in counties on the IRS' list can buy replacement livestock and defer gains until the end of 2008 or later if they remain on the list. See www.irs.gov and look at Notice 2007-80 for a list of eligible counties.
E-mail scam targets taxpayers
It's still true that if it sounds too good to be true, well you know the rest. Apparently taxpayers are being targeted by a scam offering them IRS refunds. The e-mails look like they are from the IRS, and they request the taxpayer's Social Security number. In some cases the e-mails promise refunds; in others they tell the recipient that he/she is under investigation.
The IRS does not send unsolicited e-mails or ask for personal or financial information online. It is recommended recipients of these e-mails do not open them, but forward them to phishing@irs.gov.
Plan 2008 cash flow
Do yourself an end-of-year favor and set up a projected cash flow plan for the farm, says tax and estate-planning specialist Darrell Dunteman. He recommends a program that will create a monthly cash flow, as well as create an accrual basis income statement to help you see the true profitability of your business. See the program on the farmdoc web site at www.farmdoc.uiuc.edu. The program requires Excel to run.
Dunteman says the cash flow plan will give you a road map for the year. He adds it's a good idea to share this with all your partners or shareholders on a regular basis.