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Christmas Is Upon Us!

The question that usually comes next is, “Are you ready?” but maybe the question we should be asking of ourselves is “How much are we going to spend?”

The National Retail Federation, along with other organizations that survey consumers, keeps track of consumer spending and they estimate that you will spend about 5% more than you did last year on gifts, decorations, parties, etc.  And it is all pushing towards $1,000 for the average American this year.

Where Are Those Dollars Going?

NestEggg Christmas

The bulk of that cash is going to gifts for family.  More than half, in fact.  The remainder is pretty evenly split between decoration, holiday travel, and other Christmas expenses like cards and hostess gifts, etc.

We are now also doing about half of our holiday shopping online.  The rest in stores and a small portion of our gifts are homemade (ah, I love a homemade batch of Christmas cookies!).

This year a little over 25% of consumers expect to go into debt, using credit or loans to purchase holiday gifts and supplies.

What Should You Spend?

Obviously that question is quite subjective and widely open to interpretation.  If you feel like you did well last year go back to your expenses and add them up.  If your income has stayed static over the past year that may be where you want to land again.  Financial gurus suggest your budget should be somewhere below 2% of your yearly income, so if you earn around $50,000 then somewhere around $800 or 1.6% should be your entire Christmas spending budget. Once you have settled on a budget for this year then… wait for it… stick to it! 

Having a budget is a great idea only if you implement.  While budgeting may not sound very generous or in the holiday spirit, it is kind to your future self who will have to deal with the aftermath of overspending (or underspending, but who does that during the holidays, really?). 

Where Should it Go?

Begin with your priorities.  Who is the most important person to shower with gifts this season, your kids, your significant other?  Shuffle your list to put these people on the top and plan on spending the bulk of your budget, over 50%, there. 

Now look at your remaining list.  These are your gift card and cookies folks.  If there is a third tier of friends and family maybe they can go in the Christmas card and letter category.

Don’t Forget Santa!

Don’t forget the tree, and those things that make the season feel festive to you.  Maybe you can forego the high electricity bill putting lights all over the house this year, but you can’t go without that special holiday ham!  Maybe you can’t throw the whole party yourself, but if you make it a potluck you can still spend quality time with your friends.  Creativity and good cheer go a long way!

Merry, merry!

National Tax Security Awareness Week: Creating strong passwords can protect taxpayers from identity theft

Strong Passwords

With millions of people logging in to websites and online accounts this holiday season, the IRS and the Security Summit partners remind taxpayers that common mistakes can increase their of risk having sensitive financial and tax data stolen by identity thieves.

The Internal Revenue Service, state tax agencies and the nation’s tax industry remind taxpayers that using strong passwords and keeping them secure are critical steps to preventing thieves from stealing identities, money or using the information to file a fraudulent tax return.

“Taking a few simple steps to protect your passwords can help protect your money and your sensitive financial information from identity thieves, which is critically important as tax season approaches” said IRS Commissioner Chuck Rettig. “Protecting your information makes it harder for an identity thief to file a fraudulent tax return in your name.”

Password protection is the focus of Day 3 of National Tax Security Awareness Week. For the fourth year in a row, the IRS, state tax agencies and the nation’s tax industry – working together as the Security Summit – are highlighting the holiday period as a time to remember important safety tips everyone should take to protect their sensitive tax and financial data.

The week continues through Dec. 6 with a series of special educational efforts taking place at more than 25 partner events across the country to raise awareness about protecting taxpayers and tax professionals from identity theft. The week includes special social media efforts on platforms including Twitter and Instagram, including a special Twitter chat on @IRSnews and #TaxSecurity on Thursday.

Strong passwords protect online accounts and digital devices from data theft. But there have been some important changes many people can overlook.

In recent years, cybersecurity experts’ recommendations on what constitutes a strong password has changed. They now suggest that people use word phrases that are easy to remember rather than random letters, characters and numbers that cannot be easily recalled.

For example, experts previously suggested something like “PXro#)30,” but now suggest a longer phrase like “SomethingYouCanRemember@30.” By using a phrase, users don’t have to write down their password and expose it to additional risk. Also, people may be more willing to use strong, longer passwords if it’s a phrase rather than random characters that are harder to remember.

Protecting access to digital devices is so critical that some now feature fingerprint or facial recognition technology, but passwords remain common for many people.

Given the sensitivity of many of these online accounts, people should consider these passwords tips to protect devices or online accounts:

  • Use a minimum of eight characters; longer is better.
  • Use a combination of letters, numbers and symbols in password phrases, i.e., UsePasswordPhrase@30.
  • Avoid personal information or common passwords; use phrases instead.
  • Change default or temporary passwords that come with accounts or devices.
  • Do not reuse or update passwords. For example, changing Bgood!17 to Bgood!18 is not good enough; use unique usernames and passwords for accounts and devices.
  • Do not use email addresses as usernames if that is an option.
  • Store any password list in a secure location, such as a safe or locked file cabinet.
  • Do not disclose passwords to anyone for any reason.
  • When available, a password manager program can help track passwords for numerous accounts.

Whenever it is an option for a password-protected account, users also should opt for a multi-factor authentication process. Many email providers, financial institutions and social media sites now offer customers two-factor authentication protections.

Two-factor authentication helps by adding an extra layer of protection. Often two-factor authentication means the returning user must enter their credentials (username and password) plus another step, such as entering a security code sent via text to a mobile phone. Another example is confirming “yes” to a text to the phone that users are accessing the account on.

The idea behind multi-factor authentication is that a thief may be able to steal usernames and passwords, but it’s highly unlikely they also would have access to the mobile phone to receive a security code or confirmation to actually complete the log-in process.

Remember: the IRS will never ask for passwords. And watch out for phishing emails posing as trusted companies seeking passwords.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the third in a week-long series of tips to raise awareness about identity theft. See IRS.gov/SecuritySummit for details.

Taxpayers in private debt collection can now make payments with direct debit

Tax Debt

Taxpayers in the private debt collection program now have a new option for paying what they owe. Taxpayers now can choose a pre-authorized direct debit. They can use this to make one payment or a series of payments toward their federal tax debt.

These taxpayers should remember to be aware of scammers. Like all taxpayers, they should be on alert for identity thieves pretending to be from a private collection agency calling about a tax bill.

Here are some facts to help people understand this new payment option:

  • With direct debit, the taxpayer gives written permission to the private collection agency authorizing payment. The payment is made on the taxpayer’s behalf to the U.S. Department of the Treasury. This also allows the taxpayer to schedule multiple payments with one phone call.
  • When taxpayers choose the direct debit option, they’ll complete and sign a written authorization. They can submit this to the private collection agency by mail or fax. The authorization contains the payment schedule and bank account information.
  • Once the collection agency receives the taxpayer’s signed authorization, the collection agency will send a confirmation letter to the taxpayer. This letter contains the details of the pre-authorized direct debit.
  • After scheduling a direct debit, the taxpayer can change or cancel it up to one business day before the scheduled payment.

Here’s some info to help taxpayers make sure the caller is legit:

  • Payments by check should be made out to the U.S. Treasury. The taxpayer should send the check directly to the IRS, not the private collection agency.
  • When a representative from one of the four private collection agencies contacts a taxpayer, they will tell the taxpayer which private collection agency they represent. It will be one of these: CBE, Performant, Pioneer or ConServe.
  • Even with private debt collection, taxpayers will not get unexpected phone calls demanding payment.
  • Before a taxpayer is contacted, they will receive two letters. One is from the IRS and one from the private collection agency. Both letters will include a taxpayer authentication number, also known as a TAN.
  • The TAN will be used by the taxpayer to authenticate the private collection agency. It’s also used by the collection agency to verify the identity of the taxpayer. Taxpayers will use the TAN instead of their Social Security number.
  • Taxpayers should safeguard their TAN as they would a Social Security number.

Taxpayers can report a suspected phone scam or inappropriate behavior to the Treasury Inspector General for Tax Administration on their website, or by calling 800-366-4484.


How taxpayers can make sure their donations are tax deductible

Taxable Dedcutions

It’s that time of year when taxpayers are thinking about how they want to give back, and many taxpayers will want to donate to a charity that means something to them. The IRS has a tool that may help them make sure their donations are as beneficial as possible.

Tax Exempt Organization Search on IRS.gov is a tool that allows users to search for tax-exempt charities. Taxpayers can use this tool to determine if donations they make to an organization are tax-deductible charitable contributions. 

Here are some things to know about the TEOS tool:

  • It provides information about an organization’s federal tax status and filings.
  • It’s mobile device friendly.
  • Donors can use it to confirm that an organization is tax-exempt and eligible to receive tax-deductible charitable contributions.
  • Users can find out if an organization had its tax-exempt status revoked.
  • Organizations are listed under the legal name or a “doing business as” name on file with the IRS.
  • The search results are sortable by name, Employee Identification Number, state, and country.
  • Users may also download entire lists of organizations eligible to receive deductible contributions, auto-revoked organizations and e-Postcard filers.


Taxpayers can also use the Interactive Tax Assistant, Can I Deduct my Charitable Contributions? to help determine if a charitable contribution is deductible.

Annual Privacy Notice – No Action Needed

Tax Notice

Your account records are covered by state laws that protect your privacy. The Information Practices Act (Civil Code §1798.17) requires the California Department of Tax and Fee Administration (CDTFA) to notify you each year of your privacy rights.

The CDTFA administers many of the state’s tax and fee laws. We ask you for your information (when you apply for your permit, certificate, license or renewal, relief request, payment plan, offer in compromise, settlement, or other applications) that is either required by law, or is used for our registration records. We will use the information to determine whether you are paying the correct amount of taxes and fees, or to collect any amounts you owe. You must provide all information requested, including your social security number (used for identification purposes [see Title 42 U.S. Code section 405(c)(2)(C)(i)]). A complete list of the California Revenue and Taxation Codes authorizing the CDTFA to maintain your information for the administration of its programs is printed below.

What happens if I don’t provide the information?
Your application for a permit, certificate, license, relief request, payment plan, or other programs may not be processed if your information is incomplete. If you are not able to file your required returns, you may have to pay penalties and interest. You may owe more taxes or fees, or receive a smaller refund, if you do not provide the requested information to support your exemptions, credits, exclusions, or adjustments.

If you provide fraudulent information, civil penalties may apply, and you may be subject to criminal prosecution.

Can anyone else see my information?
Yes; while your records are covered by state laws that protect your privacy, the CDTFA may share information regarding your account with specific local, state, and federal government agencies, or companies contracted and authorized to represent those government agencies.

We may release the information printed on your permit, certificate, or license, such as your account type, start and closeout dates, and the names of business owners or partners (unless otherwise protected from disclosure), to the public. When you sell a business, we may give the buyer or other involved parties information regarding any of your outstanding tax liabilities.

With your written permission, we can release some or all of the information regarding your account to anyone you designate.

Can I review my records?
Yes. Requests should be made in writing to your closest CDTFA office or responsible official listed below. For a complete listing of our locations or a copy of publication 58A, How to Inspect and Correct Your Records, visit us at www.cdtfa.ca.gov, or call our Customer Service Center at 1-800-400-7115 (CRS:711), Monday through Friday, 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays. You may contact the CDTFA’s Disclosure Office at:

Disclosure Office, MIC:82
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0082
1-916-445-2918

Who is responsible for maintaining my records?
The officials listed below are responsible for maintaining your records.

Field Operations Division, MIC:47
Deputy Director
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0047
1-916-322-4889
Business Tax and Fee Division, MIC:43
Deputy Director
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0043
1-916-309-5200

The CDTFA may disclose information to authorized officials of the following contracted agencies, among others:

United States government agencies State of California government agencies and officials State agencies outside of California for tax enforcement purposes City and County attorneys, prosecutors and law enforcement departments Any agency authorized to enforce local tobacco control ordinances

The CDTFA must collect information in order to administer the state laws listed below. Code sections are from the California Revenue and Taxation Code unless otherwise noted.

Business Tax and Fee Division
Sales and Use Tax (SUT)

Sales and Use Tax (sections 6001-7176, 7200-7226, 7251-7279.6, 7285-7288.6) Fee Collection Procedures (sections 55001-55381) Lumber Products Assessment Fee (Public Resources Code section 4629-4629.13) Prepaid Mobile Telephony Services Surcharge (sections 55001-55381, 42001-42024, 42100-42111)

Special Taxes and Fees (STF)

Alcoholic Beverage Tax (sections 32001-32557) California Tire Fee (sections 55001-55381, Public Resources Code section 42860-42895) Cannabis Tax (sections 34010-34021.5, 55001-55381) Childhood Lead Poisoning Prevention Fee (sections 43001-43651, Health and Safety Code section 105310) Cigarette and Tobacco Products Tax (sections 30001-30483, Health and Safety Code sections 104555-104558) Cigarette and Tobacco Products Licensing Act of 2003 (Business and Professions Code sections 22970-22991, Government Code section 15618.5, Penal Code section 830.11) Covered Electronic Waste Recycling Fee (sections 55001-55381, Health and Safety Code sections 25214.10-25214.10.2, Public Resources Code sections 42460-42486) Diesel Fuel Tax (sections 60001-60709) Emergency Telephone Users Surcharge (sections 41001-41176) Energy Resources Surcharge (sections 40001-40216) Fee Collection Procedures (sections 55001-55381) Hazardous Substances Tax (sections 43001-43651, Health and Safety Code sections 25174-25174.11, 25205.1-25205.23) Integrated Waste Management Fee (sections 45001-45984, Public Resources Code sections 48000-48008) International Fuel Tax Agreement (sections 9401-9433) Marine Invasive Species (Ballast Water) Fee (sections 44000-44008, 55001-55381, Public Resources Code sections 71200-71271) Motor Vehicle Fuel Tax, including Aircraft Jet Fuel Tax (sections 7301-8526) Natural Gas Surcharge (sections 55001-55381, Public Utilities Code sections 890-900) Occupational Lead Poisoning Prevention Fee (sections 43001-43651, Health and Safety Code sections 105190, 105195) Oil Spill Response, Prevention, and Administrative Fees (sections 46001-46751, Government Code sections 8670.40, 8670.48) Regional Railroad Accident Preparedness and Immediate Response Fee (sections 55001-55381, Government Code sections 8574.30-8574.48) Tax on Insurers (sections 12001-13170) Timber Yield Tax (sections 38101-38908) Underground Storage Tank Maintenance Fee (sections 50101-50162, Health and Safety Code sections 25299.10-25299.51) Use Fuel Tax (sections 8601-9355) Water Rights Fee (sections 55001-55381, Water Code sections 1525-1560)

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Recent Posts

  • Christmas Is Upon Us!
  • National Tax Security Awareness Week: Creating strong passwords can protect taxpayers from identity theft
  • Taxpayers in private debt collection can now make payments with direct debit
  • How taxpayers can make sure their donations are tax deductible
  • Annual Privacy Notice – No Action Needed
  • IRS updates guidance for deductible business, charitable, medical and moving expenses
  • Taxpayers should watch out for gift card scam
  • IRS: Eligible employees can use tax-free dollars for medical expense

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