Preparing for the Grinch of the Holiday Season: Financial Fraud and Scams
The holiday season is upon us. A time for family, friends, reflection and scammers. Yes, scammers. With people in a spending and giving mood, the scammers are active. Holiday scams can work in a number of ways, and it is important that we are aware and informed. Emails Not only around the holidays, but all through the year, we all receive countless emails asking to click on a link within the email for a variety of reasons. During the holidays, these email scams might promote sales at websites or other retailers or perhaps encourage you to make a charitable contribution. Generally, these emails will have some sort of link they encourage you to click on. Do not! With any sort of email, whether soliciting help for a charity or from a retailer wanting you to learn more, go to the website of the charity or the company for more information. Go to that site independently of the email received to check them out. Feel free to contact the organization to ask about the email offer you received as well. Verify the legitimacy of any offer or solicitation to donate before clicking on any link. Some Common Scams There are a number of common techniques that scammers might use to get your information. Scams involving a package delivery may include a scammer contacting you for information in order to confirm where a package for you should be delivered. They may send an email with a link that could infect your computer with malware if clicked. They may ask for credit card information to “verify” your account information. Missed package delivery scams will ask for personal information to “verify” your address, etc. This information could aid a scammer in a future scam against you. Gift cards offer an array of scamming opportunities. This might come in the form of a trusted friend or an organization asking you to purchase an online gift card for their friend. If you receive a questionable gift card request, be sure to contact the requester by phone to verify. These and countless other types of scams seem to multiply during the holidays. If you are even the slightest bit suspicious, please verify before giving out any information, especially credit card data. Secure Online Transactions When making an online payment, be sure to use a secure payment method. This may often be a credit card that offers fraud protection. Debit cards can be risky in that the money comes directly out of your bank account, just as if you wrote a check. In the event of a fraudulent transaction, or even if you wanted to protest the transaction for a non-fraudulent reason, the money is gone and will be difficult to recover in many cases. It is critical to monitor your credit card and bank accounts during the holidays to detect any fraudulent transactions. This is important throughout the year, but especially during the holidays with the increased volume of transactions that you legitimately make. Add in all the solicitations you might receive, and the possibility of being the victim of a fraudulent transaction multiplies. If you do see a transaction that you did not make, contact your credit card issuer or your bank and bring it to their attention. The sooner you do this, the more likely they will be able to help you by voiding the transaction or taking other actions. Charity Scams The holiday season is a time when many of us focus on charitable contributions. This may be in part due to the holidays being a season of giving and some year-end tax planning. Whatever our motivation, we may be more open to a plea for charity to contribute than during the rest of the year. Some charity scammers may use phone calls to solicit donations. Contributing over the phone is risky on several counts. First you are giving your credit card information to someone you know nothing about. They may be legitimately soliciting donations for a real charity. But they may also be scammers looking to steal your information. If you receive this type of phone call, you are better off declining and saying you prefer to donate directly via sending a check or on their website. Anyone who is legitimate will certainly understand and thank you. A scammer will likely protest and try to convince you to donate through them. Charity scams can also be originated by email. A scammer can get your email address relatively easily and send you an email appealing to your charitable side. The email will often contain a link to click on to donate. In the case of a scam, this link will lead to some bogus site where the scammer hopes that you will input your card and other information they can use to steal from you. Please contact your Wedbush Financial advisor to learn more about protecting yourself from these types of scams and about how to best make a charitable contribution for your situation. Do not fall victim to the scamming Grinch this holiday season. Disclosure Wedbush Securities does not provide tax or legal advice. Please consult your tax or legal advisor. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice. Third-party entities, companies, and organizations that may be referenced on
‘Tis the Season for Charitable Giving
As we head into the holiday season, it is a time of giving for many of us. Many of us have favorite charities or organizations that we like to support each year. The holiday season also marks the end of the year and is a time to review your tax situation. If it looks like you might need some added deductions, charitable giving can be a win-win for both your tax liability and the receiving organization. Itemizing Deductions In order to be able to deduct charitable contributions of any type, you must be able to itemize deductions on your tax return. This means that your total itemized deductions must exceed the standard deduction for that tax year. For 2024, the standard deduction is $14,600 for single filers and $29,200 for those filing married and joint.1 Donating Appreciated Securities Especially near the end of a year like 2024, donating appreciated securities such as shares of stock, mutual funds or ETFs can benefit both the receiving charity and you in several ways. First when donating appreciated securities, the market value of the shares on the date of the donation is the donation amount. Note it is generally better to donate appreciated shares versus selling them and donating the cash. The reason is that if the securities are sold first, then capital gains taxes will be due. If the shares are donated directly, there are no capital gains taxes due. It is important to determine if you can itemize deductions before embarking on donating appreciated securities. Additionally, you will want to contact the charity to be sure they can accept the direct donation of securities. Given the gains we have seen in the markets this year, this strategy could also become part of your year-end portfolio rebalancing, making this process a bit more tax-efficient. Donor Advised Funds (DAFs) A donor advised fund is essentially a charitable investment account where contributions can be invested and amounts withdrawn over time to support various charitable organizations. Contributions of cash, securities, private company stock, crypto and other types of non-public traded assets can be made. Contributions can be deducted in the year they are made while contributions from the DAF can be made to the organizations of your choice over time. Note the donations made from the DAF will not qualify for a charitable deduction. Donating to a DAF in a given year can be a way to bunch assets to qualify for itemizing deductions on your tax return. Keep Good Records As with anything pertaining to your taxes, we cannot stress enough the importance of keeping good records for charitable contributions of all types. This means keeping any sort of receipt or acknowledgement from the receiving organization, and perhaps a copy of a check or a transaction from your brokerage account if contributing appreciated shares. While proof of your contribution may never be needed, if the IRS requests it, you will need to produce it in order for any deduction you are claiming to remain valid in the face of an IRS review or audit. Qualified Charitable Distributions (QCDs) Another tax-efficient option for those who are at least age 70 ½ and who have a traditional IRA account is a qualified charitable deduction (QCD). A QCD is a distribution that is directed to a qualified charitable organization. There is no tax deduction for a QCD, but the funds come out of the IRA tax-free. This reduces the amount in the IRA that will be subject to required minimum distributions (RMDs) in future years. For those who have reached the age where RMDs must be taken, they can use a QCD to satisfy some or all of their RMD. One caveat here, the QCD must be taken before the RMD has been satisfied for the year, if taken after the RMD has been satisfied the QCD cannot be used retroactively to satisfy the RMD. Money from a QCD that does satisfy the RMD for the year will result in that portion of the RMD not being taxed. To discuss tax-efficient ways to donate to the charity of your choice, contact your Wedbush advisor. 1: IRS Disclosure Wedbush Securities does not provide tax or legal advice. Please consult your tax or legal advisor. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice. Third-party entities, companies, and organizations that may be referenced on this page are not affiliated with Wedbush Securities or any of its affiliates. Opinions mentioned are that of the third-party and not of Wedbush Securities, the financial adviser and/registered representative, or any of our affiliates. Investment products involve investment risks including potential loss and are not insured by any federal agency, are not deposits or obligations of, or guaranteed by any financial institution and may involve loss of value. Past performance is not a guarantee of future returns. Any implementation of recommendations or investment strategies may generate fees, expenses, charges or commissions, based on the products and services. Any organization, company, individual, or third-party entity that are referenced on this page are not affiliated with Wedbush or any of its affiliates. The content on this page might not necessarily reflect the expertise of the investment professional and should be used for informational purposes only; the information provided on this page is not intended