Home and Wealth Newsletter - 6 ways to lower your odds for a tax audit –PLUS 6 tips to boost your smartphone's security

Tax season will soon be upon us. As people begin organizing their financial info, they often worry their returns might get audited. The percentage of people audited is small, yet that number has risen since 2008. The most common audit is a "correspondence audit," a notice from the IRS requesting more information about certain details. Deeper audits are fairly rare. Here's how to reduce your odds for any kind of audit:

1. Report all income. Beyond wages, be sure to report items such as bank interest, investment income, and jury duty pay. Tips, sales on eBay, and alimony also count.

2. Be careful with deductions. Deduct what you're entitled to, but an audit can be triggered by big deductions, such as charitable contributions totaling 30% of your income. If you gave that much, have receipts. Also, don't claim a hobby as a money-losing business. And don't claim a home office deduction if the tax savings are minimal, as it boosts your chance of an audit.

3. Explain yourself where appropriate. When you're reporting something that could seem unusual to the IRS, add an explanation. You may not avoid an audit, but experts say it usually doesn't hurt.

4. Know your tax preparer. Check their qualifications. If a tax preparer is suspected of fraud, the IRS could audit everyone using them. Find out the tax preparer's qualifications and check with the Better Business Bureau.

5. Review your return closely. When scanning returns, the first thing IRS computers look for are math errors and factual mistakes, like incorrect Social Security Numbers.

6. E-file. The IRS says filing returns electronically can "dramatically reduce errors," lowering your odds of an audit. The error rate for paper returns is 21%, but just 0.5% for e-filed ones.

If you're questioned by the IRS, don't assume they're right. Collect your records, involve a tax professional, and make your case. The IRS office of Taxpayer Advocate Services can often help.
As always, please consult your tax advisor.

GUARD YOUR SMARTPHONE!

We're using smartphones more in both business and everyday lives. This growing popularity makes them a big target for security threats like viruses, malware, and hackers intent on stealing passwords, deleting photos, and worse. Here's how to improve your smartphone security:

1. Activate screen lock. If your smartphone is misplaced or stolen, don't make it easy for a stranger to see its contents. Set it up to require a PIN code or password for access.

2. Turn off Wi-Fi, Bluetooth, and location services. Disable these whenever you're not using them. They all give hackers easy access to your device.

3. Install anti-virus and security software. An Internet search will find anti-virus software and useful security tools, such as apps that encrypt messages, locate a missing phone, warn you if you're connecting to an unsecured hotspot, and remotely lock your phone.

4. Back up data and update system software. Regularly back up data and always download system software updates for the latest security and performance upgrades.

5. Watch what you click on. Texts and emails with links or attachments could redirect you to a spoof or phishing site that will try to get passwords and other information. Don't click on links from sources you don't recognize.

6. Be aware of family and friends' security. Your security is only as good as the people you connect to. If they don't have perfect security, there's still a risk. Also, be careful with accounts your family shares, such as iTunes.

To improve financial security, why not look into better ways to finance a new home, refinance your existing one, or fund home improvements. Please call or email us–we're always here to help.... Have a great day!

P.S.  Experts feel the housing market has stabilized and is turning around in many areas. Prices are extremely affordable and mortgage rates are at historic lows. It's smart to get the financing process started early. So if you're thinking about buying or refinancing, please call or email us to talk about the attractive options now available.

This was sent to you because of your relationship with Dan Davidson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. PrimeLending, A PlainsCapital Company is an Equal Housing Lender. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. CL-13649; WV Div. of Financial Institutions- lender license ML31704 and broker license MB-31703. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 10331

Inside Lending Newsletter - For the week of November 5, 2012 – Vol. 10, Issue 45

>> Market Update  QUOTE OF THE WEEK... "It is only in sorrow bad weather masters us; in joy we face the storm and defy it." --Amelia Barr, British novelist INFO THAT HITS US WHERE WE LIVE... We hope that in the face of the tragedy of superstorm Sandy, those affected will find joy: in neighbors coming together showing strength in community; in the armies of emergency workers, both professionals and volunteers, toiling around the clock; in the heartfelt support of people across the country, expressed on social networks, via emails, on radio and TV. Our thoughts and prayers go out to all those now struggling to recover. If you'd like to contribute to the relief effort, a good place to start is the American Red Cross at http://www.redcross.org/charitable-donations. The week, however, was not devoid of housing news. The August 10- and 20-city S&P/Case-Shiller home price indexes showed monthly increases for the fifth month in a row. 17 of the 20 metros tracked also registered annual gains in August, up an average of 2.0% from a year ago. The Federal Housing Finance Agency home price index was up 4.7% from a year ago. This shows prices for homes financed with conventional mortgages returning to June 2004 levels, although still down 15.9% from their April 2007 peak. BUSINESS TIP OF THE WEEK... Be determined. Most pursuits have so many variables, it's impossible to control how things will unfold. What matters are your end vision and your determination to get there. >> Review of Last Week EVERYTHING ON HOLD... The New York Stock Exchange shut down Monday and Tuesday due to superstorm Sandy. The markets stayed on hold in the remaining three days of trading, with stock prices kept in check by lower corporate earnings. Some feel investors are staying quiet as they wait to see which way the election goes. Economic data was mixed, giving no advantage to either candidate. We gained 171,000 jobs in October, slightly better than forecast, and got another 84,000 from upward revisions to prior months. But the unemployment rate headed back up to 7.9%, and "U-6" unemployment, which includes involuntary part-time workers, is still 14.6%! In addition, hourly earnings fell a bit, and have risen only 1.6% in the last year, not keeping up with inflation. The ISM Manufacturing Index continued to show slight expansion at 51.7, but the Chicago PMI, at 49.9, revealed manufacturing in the Midwest is now contracting. Not surprisingly, Consumer Confidence came in lower that expected. For the week, the Dow ended down 0.1%, to 13093; the S&P 500 was up 0.2%, to 1414; and the Nasdaq was down 0.2%, to 2982.  With mixed economic data and the stock market in a holding pattern, bond prices did not move up much if at all. The FNMA 3.5% bond we watch ended the week up .05 at $106.17. National average mortgage rates remained historically low for all types of conventional loans in Freddie Mac's Primary Mortgage Market Survey. The Mortgage Bankers Association saw purchase loan demand up for the week and up 6% from a year ago. DID YOU KNOW?... As superstorm Sandy battered the East Coast, tweets and images with the hashtag #Sandy racked up 4 million Twitter mentions with a potential reach of 3 billion people, according to a leading social media monitoring company. >> This Week’s Forecast QUIET BUT FOR AN ELECTION... This week doesn't feature many economic reports, but many observers feel the Presidential election on Tuesday will reveal much about where the economy and financial markets are heading. Experts say the contest is too close to call. Prior to the election, the October ISM Services Index should be down a tick from the prior month but still just over 50, in expansion territory. After the vote, we'll see Initial Weekly Unemployment Claims and Continuing Claims, expected to be in the elevated territories where they've remained for so long. The September Trade Balance is forecast to increase by over a billion, showing we're still buying their stuff way more than they're buying ours. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Nov 5 – Nov 9  Date Time (ET) Release For Consensus Prior Impact M Nov 5 08:30 ISM Services Index Oct 55.0 55.1 Moderate W Nov 7 10:30 Crude Inventories 11/3 NA –2.045M Moderate Th Nov 8 08:30 Initial Unemployment Claims 11/3 370K 363K Moderate Th Nov 8 08:30 Continuing Unemployment Claims 10/27 3.250M 3.263M Moderate Th Nov 8 08:30 Trade Balance Sep –$45.4B –$44.2B Moderate F Nov 9 09:55 Univ. of Michigan Consumer Sentiment Nov 83.0 82.6 Moderate >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... October 24, members of the Fed's Open Market Committee said they expect to keep their target for the Funds Rate at "exceptionally low levels" at least through mid-2015. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Dec 12 0%–0.25% Jan 30 0%–0.25% Mar 20 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Dec 12      <1 span="span"> Jan 30      <1 span="span"> Mar 20      <1 span="span"> UIE

This e-mail is an advertisement for Dan Davidson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. CL-13649; WV Div. of Financial Institutions- lender license ML31704 and broker license MB-31703. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 10331