Yes, Data Breaches & Identity Theft Impacts You and Your Business

 

Too
frequently there are data breaches that result in customers having their identity
stolen. These data breaches can directly impact your business or individual taxpayers
with significant losses.

What is a
data breach? A data breach is when unauthorized individuals “hack”  into organizations and harvest personal
information as passwords, credit card information, and social security numbers.
Typically, data breaches have happened to retailers as Target and second
parties that gather information like Equifax. Even the U.S. government has
experienced data breaches in the past.

Typically,
if a business has a data breach and identify theft happens to customers, they
will inform customers and give them a period of identity protection. This is
done at the expense of the business and free of charge for the customer. As data
breaches and identity theft have become more common, victims can seek tax
relief. The IRS has recognized the impact of identity theft on taxpayers and has
become more sympathetic. Having the IRS recognize identity theft is a problem for
taxpayers. The IRS has changed tax codes to reflect this issue.

Taxpayers
that have experienced identity theft can deduct losses they have suffered. Bear
in mind tax laws are different for business and individual taxpayers. Sec.
165(a) will let individual taxpayers deduct any losses they occurred during the
year. Business as partnerships, sole props, and corporations can deduct losses
under Sec. 162(a) that caused a data breach or identity theft. If you or your business
has experienced identity theft it is advisable to seek a tax accountant for
guidance. They will be able to help you with claiming losses and navigating tax
laws you may not be familiar with.

To protect
yourself and your business from identity theft can do the following: 1. Have
unique and different passwords for your smartphone, email, and online banking
for example. The more unique and stronger your password the better. 2. Be
careful what websites you visit and links you click when online. If the website
looks strange or too good to be true say away. 3. At least once a year get a free
credit report  through
AnnualCreditReport.com. If something is wrong you can fix it before it impacts your
credit and ability to buy a house or car. 4. Do not freely give out your personal
information over the phone. If someone suspicious asks for your personal information
hang up.

Data breaches
and identity theft are something that cannot be completely avoided but you can
be proactive about protecting yourself. If you are unfortunately a victim of identity
theft take action today. Don’t wait tomorrow. SWVA tax accountants can help you
with identity theft deductions. We are here to help you with all your tax needs.
Don’t hesitate to call or book an appointment online today with SWVA Tax Accountants.
We’ll run the numbers, you run the business! Visits us at https://www.swvatax.com/ for your tax
needs.

 

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