Taxes: What's New and How to Protect Yourself From Scams with Kevin Cross

3. Home Office Deduction Made Simple

For those working from home, the simplified home office deduction remains available. Instead of complex calculations, the IRS offers a straightforward option: you can deduct up to $1,500 based on the square footage of your home used for business. This method, sometimes called the "tax court method," makes claiming a home office deduction much easier.

Beware of Tax Scams: A New Threat Emerges

Unfortunately, tax season also brings an increase in fraudulent activity. One of the most concerning scams right now involves Merrill Lynch accounts, and it’s catching even savvy investors off guard.

The Merrill Lynch Phishing Scam

Here’s how it works:

1. Scammers deposit a small amount of money into a Merrill Lynch brokerage account.
2. Merrill Lynch detects the fraudulent deposit and contacts the account holder.
3. The next day, the victim receives an email from what appears to be Merrill Lynch, stating they need to transfer their money due to a security breach.
4. Thinking it's a follow-up to a legitimate issue, the victim complies—only to have their money stolen.

This scam is particularly dangerous because it plays off real events, making it feel credible. Tragically, one victim lost $900,000 in savings and was so devastated that he took his own life.

How to Protect Yourself

Scammers rely on urgency and deception. Here’s how you can stay safe:

• Never respond to unsolicited emails or phone calls requesting personal or financial information.
• Always initiate contact with financial institutions directly through their official website or customer service number.
• Know the IRS Rules: The IRS will never text, email, or call you to demand payment. If you receive such a message, it’s a scam.

As you prepare your taxes this year, keep these key points in mind:

1. Report all taxable income, including crypto and gig work, and track eligible deductions.
2. If you work from home, take advantage of the simplified home office deduction.
3. Stay vigilant against tax scams—verify any financial communications by reaching out directly to the institution.

On Today’s Program, Rob Answers Listener Questions:

• I have a multi-year guaranteed annuity from Gainbridge that pays around 6% for 3 years. Would it be a good idea for me to invest in it for at least a little while?
• I have a return-of-premium insurance policy. After 20 years, I'm supposed to get all the premiums I paid back, which will be around $32,000. I'm only two years into this policy, but I have some other loans and mortgages I need to pay off. Would it be better to drop this policy and get a different insurance policy, or should I keep the return-of-premium policy?
• I recently heard a minister commentator I respect say that you don't have to tithe once you are living on your retirement. My husband and I have been tithing off his income while he's still working and I'm retired, and we've found it to be a great blessing. However, the thought of not tithing once he retires concerns me. Is this biblical?
• My wife and I have about $8,500 in credit card debt and a vehicle payment. To help with this, I am considering opening a new credit card with interest-free payments. My wife's grandmother also mentioned a credit card relief program to me, but I don't know if that would be bad for my credit history. What would be the best way for us to approach paying off this debt?

Resources Mentioned:

• Faithful Steward: FaithFi’s New Quarterly Magazine
• Christian Credit Counselors
• Look At The Sparrows: A 21-Day Devotional on Financial Fear and Anxiety
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor (CKA) or Certified Christian Financial Counselor (CertCFC)
• FaithFi App