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Beware of Ghost Preparers

Ghost preparers don’t sign the tax returns they prepare, which is unethical and illegal. All paid preparers must sign and include their Preparer Tax Identification Number (PTIN) on the return, and if they don’t, this is a big red flag. These preparers might also promise unrealistic refunds or charge fees based on the size of the refund.

The IRS also has a page on IRS.gov dedicated to helping taxpayers choose a reputable tax professional and a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS¹¹

Footnotes and Sources

^{IRS.gov, February 23, 2024}

Weekly Market Insights | Markets Process Tariff Deals, New Data

Stocks posted modest losses last week as tariff deals, January jobs data, and Q4 corporate reports injected volatility into markets.

The Standard & Poor’s 500 Index slipped 0.24 percent, while the Nasdaq Composite Index lost 0.53 percent. The Dow Jones Industrial Average fell 0.54 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, edged ahead 0.17 percent.^1,2

Tariffs, Q4 Reports, and Jobs

On Monday, stocks opened lower on news that tariffs on Mexico, Canada, and China went into effect over the weekend. However, markets rebounded midmorning following news of a U.S.-Mexico deal that delayed new trade rules. News of a similar last-minute agreement with Canada followed.³

Stocks continued their rally midweek, led by technology stocks from companies that provided upbeat Q4 corporate reports.^4,5

The S&P 500 and Nasdaq rose for the third consecutive day on Thursday, while the Dow experienced a slight fall as investors digested more corporate earnings reports. The week closed on a down note as a mixed jobs report and a cautionary inflation outlook disappointed investors.^6,7

Mixed Signals on the Labor Market

As has happened several times in recent years, two job reports told conflicting stories about the state of the jobs market. On Friday, the Bureau of Labor Statistics reported that 143,000 jobs had been added for the month–a four-year low. Earlier in the week, the ADP report showed the economy added 188,000 new jobs, ahead of the 150,000 economists expected.^8,9

Why do the reports tell different stories? Economists point to various factors, including how January can be challenging to measure accurately, typically due to the more significant number of laid-off seasonal workers.¹⁰

Footnotes and Sources

^{The Wall Street Journal, February 7, 2025}
^{Investing.com, February 7, 2025}
^{The Wall Street Journal, February 3, 2025}
^{CNBC.com, February 4, 2025}
^{CNBC.com, February 5, 2025}
^{The Wall Street Journal, February 6, 2025}
^{The Wall Street Journal, February 7, 2025}
^{MarketWatch.com, February 4, 2025}
^{MarketWatch.com, February 5, 2025}
^{The Wall Street Journal, February 7, 2025}

Be On the Lookout for Unemployment Identity Theft Scams

With millions of people receiving unemployment, it’s no surprise that scammers are taking advantage of this situation and filing fraudulent claims for unemployment compensation. They do this by using stolen personal information of taxpayers who haven’t filed unemployment claims.

If you filed for unemployment and received an incorrect Form 1099-G, contact the issuing agency to request a revised form. When filing your federal tax return, you can also contact the IRS and request an identity protection PIN to protect your identity. Educate yourself on the many signs of identity theft and take the proper steps to help protect yourself.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁷

Footnotes and Sources

^{7. IRS.gov, December 28, 2023}

Weekly Market Insights | Shifted Policy Gears Rev Markets

Stocks rallied last week as investors reacted positively to a handful of better-than-expected corporate earnings reports and developments out of Washington, D.C.

The Standard & Poor’s 500 Index gained 1.74 percent, while the Nasdaq Composite Index added 1.65 percent. The Dow Jones Industrial Average rose 2.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 3.03 percent.^1,2

Flurry of News

Markets surged over the first three trading days as investors cheered a flurry of new policy announcements and executive orders following Monday’s inauguration. For example, investors responded to news that the White House trade team is considering taking a softer stance on tariffs.³

It was also a good week for Q4 company reports and other upbeat corporate news.⁴

Markets leveled off Friday as investors were disappointed that existing home sales fell to a 30-year low. But for the week, the Nasdaq had closed above 20,000 on two of the four trading days, and the S&P 500 closed above 6,000 at every session.⁵

A Look Forward

The stock market is a discounting mechanism, meaning today’s stock prices reflect all available information, including present and potential future events. And for the most part, the markets reacted positively to the news coming out of Washington last week. Some news spurred broad-based market moves, while other news had more sector-specific impacts.⁶

For example, on Thursday, markets reacted positively to news that the White House believes interest rates were too high and want to see rates trend lower. The Fed’s first scheduled two-day policy meeting ends on Wednesday, so investors may be looking to see if Fed Chair Jerome Powell addresses the new administration’s concerns.

Footnotes and Sources

^{The Wall Street Journal, January 24, 2025}
^{Investing.com, January 24, 2025}
^{MarketWatch.com, January 21, 2025}
^{CNBC.com, January 22, 2025}
^{CNBC.com, January 24, 2025}
^{The Wall Street Journal, January 21, 2025}

Electronic Filing Options for Military Families

The Internal Revenue Service (IRS) offers several online resources for military members and their families. Some of these resources include:

IRS Free File. This program offers online tax preparation, electronic filing, and direct deposit of refunds. There is no charge.
Members of the military and their families with incomes below $72,000 can choose from any of the Free File tax software companies the IRS has compiled.
Free File Fillable Forms are available for those with income above $72,000.
Free File can help taxpayers determine their earned income tax credit, child and dependent care credit, and Recovery Rebate Credit.
Miltax is another free tax resource available for the military community offered through the Department of Defense.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁷

Footnotes and Sources

^{IRS.gov, June 10, 2024}

Beware of Phishing Scams

A phishing scam occurs when someone pretends to be a trusted source, such as a bank, tax preparer, or credit card company, to access your personal information.

If you believe you may be part of a phishing scam, here are some recommendations from the IRS:

Never open an email from a sender that you don’t recognize.
Never disclose personal information to anyone online, including your passwords, bank account numbers, credit card numbers, or Social Security number. The IRS will never ask for this information via email.
When possible, use two-factor authentication to protect your accounts. Two-factor authentication requires a secondary form of identification (such as a phone number) to access your account.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁹

Footnotes and Sources

^{IRS.gov, July 29, 2024}

Weekly Market Insights | Goldilocks Returns; Market Ends Week “Just Right.”

Stocks roared back last week, fueled by upbeat Q4 corporate reports and economic news that stalled inflationary fears.

The Standard & Poor’s 500 Index rose 2.91 percent, while the Nasdaq Composite Index advanced 2.45 percent. The Dow Jones Industrial Average led, picking up 3.69 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 2.00 percent.^1,2

Goldilocks is Back

The “Goldilocks” narrative—an economy that’s neither too hot nor too cold—made a comeback last week.

Tuesday’s Producer Price Index report showed that wholesale prices rose less than expected in December—one piece of evidence suggesting a cooling economy.³

Stocks jumped out of the gate Wednesday after the December Consumer Price Index (CPI) report showed core inflation (minus volatile energy and food prices) rose less than expected. Investors also cheered Q4 reports from a handful of money center banks and positive news out of the Middle East.⁴

Stocks took a breather Thursday before pushing higher again on Friday.⁵

The S&P and Dow Industrials had their best week since early November, and the Nasdaq saw its best weekly performance since early December. The yield on the 10-year Treasury note fell roughly 20 basis points over the week.^6,7

Slowing Inflation

Investors welcomed the inflation reports, believing wholesale and consumer prices might trend lower in 2025.

First, producer prices came in at 0.2 percent, which was less than the 0.4 percent increase anticipated. Then consumer prices came in at 2.9 percent, slightly elevated, but the real story was core inflation. When you subtract out food and gas prices, CPI saw its smallest monthly increase since July.⁸

Footnotes and Sources

^{The Wall Street Journal, January 17, 2025}
^{Investing.com, January 17, 2025}
^{CNBC.com, January 14, 2025}
^{The Wall Street Journal, January 15, 2025}
^{CNBC.com, January 17, 2025}
^{MarketWatch.com, January 17, 2025}
^{CNBC.com, January 17, 2025}
^{The Wall Street Journal, January 15, 2025}

Self-Employed Tax Obligations

There are a few tax considerations to consider when you work for yourself. Generally, you’re required to file and pay estimated taxes during the year.

Make quarterly payments if you’ve determined you need to use Form 11040-ES.
Filing annually: If you’re filing annually, you must use Schedule C to report income or loss. To file your Social Security and Medicare taxes, you should file Schedule SE Form 1040.
Deductions: If you’re using part of your home for business, you may be able to make certain deductions, such as for your office or a portion of your home’s square footage used for business purposes.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS¹⁰

Footnotes and Sources

^{IRS.gov, September 30, 2024}

Weekly Market Insights | Investors Read Inflation Risk in Job Numbers

Stocks fell for the second consecutive week as a round of fresh economic data stoked inflationary fears among investors.

The Standard & Poor’s 500 Index declined 1.94 percent, while the Nasdaq Composite Index dropped 2.34 percent. The Dow Jones Industrial Average lost 1.86 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 0.49 percent.^1,2

Inflation Stymies Markets

Stocks rallied broadly to start the week, but two economic reports on Tuesday—job openings and the prices-paid index among service companies—raised fresh inflation concerns. Higher Treasury yields also put pressure on stocks.^3,4

Stocks flattened out on Wednesday. Investors reacted to news that most Federal Open Market Committee members agreed inflation risks had increased, per minutes from the Fed’s December meeting.^5,6

U.S. stock markets were closed Thursday in observance of President Jimmy Carter’s funeral.

On Friday, a warmer-than-expected December jobs report caused investors to question whether the Fed will adjust rates in 2025. News that consumer sentiment ticked down also pushed stocks lower.⁷

When Good Becomes Bad News

The economy added 256,000 jobs in December—100,000 more than economists expected. That’s the second-highest monthly job gain for 2024. Unemployment ticked down to 4.1 percent, which was also better than anticipated.

Job growth and lower unemployment signals good news for the economy but bad news for the markets. A stronger jobs market puts less pressure on the Fed to adjust rates, especially with inflation top-of-mind among investors.^8,9

Footnotes and Sources

^{The Wall Street Journal, January 10, 2025}
^{Investing.com, January 10, 2025}
^{CNBC.com, January 6, 2025}
^{The Wall Street Journal, January 7, 2025}
^{CNBC.com, January 8, 2025}
^{MarketWatch.com, January 8, 2025}
^{CNBC.com, January 10, 2025}
^{The Wall Street Journal, January 10, 2025}
^{TradingEconomics.com, January 10, 2025}

Tips for Good Recordkeeping

When you file your tax return, the first step is to prepare your records. Good recordkeeping throughout the year can make filing your taxes easier.

Here are some recordkeeping tips:

Identify all sources of income.
Keep track of expenses.
Add tax records to your files as you receive them to make filing easier.
Organize support items that you may need to clarify your tax return.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁸

Footnotes and Sources

^{IRS.gov, October 2, 2024}