Anthem Security Breach and How It Affects Your Taxes

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Anthem was the target of a sophisticated external cyber-attack in which personal data for as many as 80 million (1 out of every 4 Americans) records for current and former customers has been exposed.  This was caused by a database breach on February 4th.  According to the company, the stolen information includes names, birthdays, social security numbers, street addresses, email addresses and employment information.

The type of information believed to have been stolen is ideal for various forms of identity theft, including federal income tax return fraud, the most common type of theft, in which criminals use stolen personal data to file a false tax return with the IRS. The criminals might also look to open new lines of credit and obtain new credit cards in your name.

According to the U.S. Department of Justice website, stolen identity refund fraud prevents hundreds of thousands of American taxpayers from receiving timely income tax refunds each year and costs the U.S. Treasury billions of dollars in fraudulent refund payouts.

Anthem has already begun individually notifying those who are impacted by this breach in the form of a letter and will continue to do so within the next two weeks. Taking some precautions now can help protect yourself from the misuse of the stolen data.

If you receive a letter from the Internal Revenue Service informing you that they are reviewing your 2014 tax return, you should contact your accountant right away, especially if you have not filed your 2014 tax return.  If tax fraud was committed using your personal information, you will be required to file Form 14039 Identity Theft Affidavit with the IRS.

To learn more, Anthem has created a dedicated website (www.AnthemFacts.com) where you can access information such as frequently asked questions and answers.

Gov. Kasich Releases Ohio Budget Proposal

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Ohio Governor John Kasich unveiled his budget proposal for fiscal years 2016 and 2017. The budget provides for $5.7 billion of tax cuts and $5.2 billion in tax increases. Hearings on the budget are currently underway in the Ohio House and are expected to last several months. The tax highlights of the budget proposal include:

Tax cuts:

  • Across-the-board individual income tax rate cuts (15% for tax year 2015 and 23% total for tax year 2016)
  • Eliminate income tax for businesses and pass-through entities with gross receipts of $2 million or less
  • Increase personal exemption from $2,400 to $4,000 for incomes less than $40,000 and $1,950 to $2,850 for incomes between $40,000 – $80,000
  • Lower alternative minimum tax on the commercial activity tax from $800 to $150 for those with gross receipts from $1 million to $2 million

Tax increases:

  • Increase state sales tax rate from 5.75% to 6.25%
  • Expanding the sales tax to include lobbying, market research/public opinion polling, public-relations, management-consulting, lobbying and debt-collection services
  • Impose sales tax on cable subscriptions, parking and travel services.
  • Reduce the motor-vehicle and watercraft trade-in value tax exemption to 50%
  • Increase cigarette tax rate from $1.25 to $2.25 per pack
  • Increase Commercial Activity Tax rate from 0.26% to 0.32%

Click here to view Governor Kasich’s budget proposal in its entirety.