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Aug 01
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How to Reduce Common Payroll Errors

By Blog, General Business News

Common Payroll ErrorsAccording to the Internal Revenue Service (IRS) and the National Federation of Independent Businesses (NFIB), almost one-third of companies see penalties due to payroll issues. Understanding a few examples, according to the NFIB, of how companies can better comply and avoid penalties is essential to smoother operations.

Underpayment of Estimated Tax by Corporations Penalty

As long as there’s a reasonable expectation of at least $500 in estimated taxes owed, corporations are required by the IRS to file. If, however, a corporation doesn’t satisfy its estimated tax payments or pays them after their quarterly submission deadline, the IRS will assess penalties. This can occur even if the IRS owes filers a refund.

The IRS recommends the easiest way to avoid the penalty is to pay the quarterly estimated taxes by the 15th day of April, June, September, and January of the following year (the following month after each quarter). If the 15th is on a weekend (Saturday or Sunday) or it’s a legal federal holiday, payment would be due on the next regular business day.

When it comes to assessing penalties for underpayment of estimated taxes, the IRS determines the penalty based on how much-estimated taxes are underpaid, the time frame of when the payment was due and underpaid, and the IRS’ current quarterly interest rates.

Based on 2023’s third-quarter data from the IRS, the federal agency charges a 7 percent penalty annually, compounded daily.

Failure to Deposit Penalty

Another payroll tax mistake businesses may make is the Failure to Deposit Penalty. The NFIB reported that nearly 50 percent of small businesses see fines on average of $850 annually because they’re late or missing payments. In order for businesses that must make employment tax deposits, it’s imperative to do so either on the IRS’ monthly or semi-weekly basis.

Required employment tax deposits cover Social Security, Medicare, and federal income taxes, along with Federal Unemployment Tax. Employers on the monthly route are required to deposit employment taxes on payments for the prior month by the 15th of the following month. For the semi-weekly route, deposits for employment taxes on payments made between Wednesdays and Fridays are to be made by the following Wednesday. For deposits done on a Saturday, Sunday, Monday, or Tuesday, employment tax deposits must be made by the following Friday.

Beginning with the due date of the employment tax deposit, the penalty is calculated by the number of calendar days the deposit is late.

Between one and five calendar days, there’s a 2 percent penalty on the unpaid deposit. Between six and 15 calendar days, the penalty increases to 5 percent of the unpaid deposit. If it’s late by more than 15 calendar days, the penalty is 10 percent of the unpaid deposit amount.

If more than 10 calendar days have passed after the first written contact from the IRS notifying the filer of failing to deposit their employment taxes or the day the business receives correspondence requiring immediate payment of employment taxes, the penalty increases to 15 percent of the unpaid deposit. It’s also subject to interest on the penalty.

While these are only two ways businesses can incur payroll-related tax penalties, it’s illustrative of how businesses need to keep on top of their federal (and state) obligations.

Sources

https://www.irs.gov/payments/failure-to-deposit-penalty

https://www.irs.gov/payments

https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-due-dates

https://www.irs.gov/faqs/estimated-tax/individuals/individuals-2

https://www.irs.gov/payments/underpayment-of-estimated-tax-by-corporations-penalty

https://www.irs.gov/newsroom/interest-rates-remain-the-same-for-the-third-quarter-of-2023

https://www.irs.gov/payments/underpayment-of-estimated-tax-by-corporations-penalty

https://www.nfib.com/content/partner-program/money/are-you-guilty-of-committing-these-5-payroll-mistakes/  

Aug 01
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The Ins and Outs of a Reverse Stock Split

By Blog, Financial Planning

Reverse Stock Split, What are Reverse Stock SplitWhen a company decides to conduct a reverse stock split, also referred to as a stock consolidation, the number of shares available to investors is reduced.

In a normal (forward) stock split, a company increases its number of outstanding shares without changing their market value. For example, one share of stock valued at $200 may split into two shares, with the shares then valued at $100 each. So, with a shareholder who holds 10 shares for a total of value of $2,000, a traditional one-to-two (1:2) stock split would change his holding to 20 shares – still valued at $2,000. The difference is that the value of each stock would change from $200 to $100.

The opposite occurs with a reverse stock split; a company decreases its number of outstanding shares without changing their market value. Using the same example, a shareholder who owns 10 shares at $200 would hold only five shares after a 2:1 reverse stock split. However, the worth of each share would double in value to $400.

Why Conduct a Reverse Stock Split?

A reverse stock split often indicates that a company is in financial distress, its stock price is on a downward spiral and it wants to reverse that momentum by giving investors a higher share value. This makes individual stocks more valuable to sell. In many cases, the company’s sinking stock price puts it in danger of losing its place on a stock exchange, which would then limit the pool of possible buyers – particularly fund managers and stock brokers. In most cases, companies that conduct a reverse stock split are small, lightly traded companies as well as some exchange-traded funds.

Impact on Small, Retail Investors

Smaller investors are more likely to be negatively impacted by a reverse stock split because they are more likely to own fewer numbers or fractional shares. For example, if a company conducts a 20:1 reverse stock split, investors receive only one share for every 20 they hold. However, if a shareholder owns less than 20 shares, he will simply be paid cash for his shares and his position would dissolve. This also holds true if the investor owns an uneven multiple of the reverse split. In the scenario of a 20:1 stock split, if the investor held 110 shares, he would receive five new post-split shares and be paid in cash for the remaining 10 shares.

How Do Stocks Perform After a Reverse Split?

While the total value of a shareholder’s holding would not change after a reverse stock split, history has shown that share prices after a reverse split tend to stagnate or continue to drop. After all, the company was likely already in financial distress, and this action serves to increase the price of a failing stock. It does not usually entice new investors or motivate current ones to invest more money in the company.

Potential Advantages and Disadvantages of Reverse Splits

To remain listed on a major stock exchange such as the NYSE or Nasdaq, a company’s share price must trade at $5 or higher. The advantage of a reverse stock split is that it increases the value of shares, which may allow them to remain listed on a major exchange. This offers value to both the investor and the company, as exchanges attract far more investors whose interest can help drive up the stock price.

Another scenario in which a reverse stock split is advantageous is if a corporation is planning to spin off a portion of its business into a separate company. By conducting a reverse stock split before the spinoff, shares of the new company are assured of having a high enough stock price to be listed on a major stock exchange.

However, a reverse stock split is most often a signal that the company is failing, is worried about a pervasive decline in its stock price, and is seeking a way to artificially increase investor share prices.

Aug 01
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7 Best Money Moves for 2023

By Blog, Tip of the Month

7 Best Money Moves for 2023In light of our current economy, making sure your money works hard for you is one of the best things to do this year. Here are some ways you can navigate your financial situation, keep tabs on where you are, and adjust if you need to.

Shop for a higher return on savings. These days, every extra cent counts. That’s why it pays to look around for higher rates on savings accounts. Several places to check out are PNC (4.65 percent APY), Sofi (up to 4.4 percent APY), and American Express (4 percent APY). Here are a few others. Rates may increase even more with the Federal Reserve’s rate hike announcement on July 27.

Open an HSA account. When you have one of these, it will help you pay for expenses that your health insurance plan doesn’t cover. If you’re enrolled in a high-deductible insurance plan, you and possibly your employer can contribute pre-tax dollars into this account, from which you’ll use funds you’ve stocked away for qualified medical expenses. Whatever money you don’t use will roll over to the next year, unlike FSA accounts.

Consolidate debt. Why pay a bunch of different interest rates on all your credit cards? If you have debt, find one card with a very low-interest rate and do a balance transfer. Some credit cards offer 0 percent APR as an introductory rate, which will be a big savings to get a jumpstart on becoming debt-free. Here are a few good ones: Bank of America® Travel Rewards Credit Card now offers 0 percent APR for 18 months. Discover it® Cash Back offers 0 percent APR for 15 months. Find other great deals here.

Cut how much you pay on car insurance. Have you shopped around lately? We know this might seem like a pain, as it takes a lot of time, but here’s some good news, and it’s called The Zebra. This amazing site has done all the heavy lifting for you. Here, you’ll find dozens of real-time comparisons from many trusted companies.

Max out your 401K. This year, the maximum yearly contribution limit has been raised by $200 to $22,500 (up from $20,500 in 2022). Even better, if you’re over 50, you can set aside catch-up contributions of $7,500, allowing a total contribution of up to $30,000. This allowance lets older workers add as much as they can so that when they retire, they’ll be in a better financial situation.

Update your W-4. No one likes a shock when it comes to paying taxes. That’s why this is such a smart idea. And the IRS actually has a tool that can help you: The Tax Withholding Estimator. Go here to find out if your employer is taking enough money out for taxes. If you’re falling short, you’ll know. Better to learn and fix this before it’s too late.

Create a net worth statement. When you have a realistic idea of your assets and liabilities, you’ll be able to see whether or not you’re on the right track with retirement. This way, you’ll be able to set up new goals for yourself if you feel you need to.

Keeping up with your finances, while time-consuming, really pays off. If you try one (or all) of these hacks, you’ll be better off in no time.

Sources

https://www.moneytalksnews.com/slideshows/15-of-the-best-money-moves-you-can-make-in-2021/

Aug 01
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Insider Threats: Identifying, Mitigating and Preventing Internal Security Risks in Organizations

By Blog, What's New in Technology

Insider ThreatsOne of the most devious and often underestimated dangers in cybersecurity comes from within an organization. These dangers originate from individuals within the organization who have access to sensitive data and systems, making them potentially dangerous adversaries capable of causing significant harm. Understanding, identifying, mitigating, and preventing these internal security risks are paramount for safeguarding an organization’s assets and preserving its integrity.

What is an Insider Threat?

Insider threats are security risks posed by employees, contractors, vendors, or anyone who has access to an organization’s data or systems. Accidental or intentional insiders cause internal threats. An accidental insider could unknowingly cause breaches due to negligence, human error or falling prey to social engineering tactics. For example, an employee clicks on a link in a phishing email, causing a malware infection.

On the other hand, insiders can intentionally engage in data theft, sabotage, or intellectual property theft, driven by motives such as financial gain, revenge or espionage.

A good example took place in May 2022 when a Yahoo employee stole trade secrets after receiving a job offer from The Trade Desk, a competitor. Another example is that of an employee fired from Stradis Healthcare who hacked into the former employer’s network in March 2020 and deleted critical shipping data.

According to the 2023 Insider Threat Report by Cybersecurity Insiders, 74 percent of organizations say insider attacks have become more frequent. The same percentage of organizations also believe they are at least moderately vulnerable to insider threats.

Experts attribute the rise in insider threats to various factors, including the effect of economic instability leading to businesses focusing on revenue growth and leaving gaps in security investments. There also has been an increase in layoffs in the tech industry that can result in disgruntled ex-employees doing damage as they leave the workplace. Overworked employees also might cut corners that create security issues, such as configuration, system access or unused accounts. Insider threats are also made more complex as many organizations migrate their workloads to the cloud, introducing new challenges.

How to Identifying Insider Threats

Insider threats are difficult to detect. However, it helps to look out for compromise indicators such as inappropriate behavior. Here is a more specific list of red flags:

  • Unusual access and log in, especially from an insider who doesn’t have certain access rights to data or systems.
  • Abnormal network search activity for sensitive information on networks, intranets, databases, or applications.
  • Unusual copying or downloading of sensitive information to an unauthorized destination such as email or removable media.
  • Misuse of tools, either foreign or installed. Detecting unfamiliar tools on a system is a compromise indicator. However, a savvy insider may even use trusted enterprise tools to execute an attack. In such a case, behavior such as access to a system outside regular working hours or access from unusual locations could indicate a compromise.
  • Unwillingness to comply with security policies. Employees who consistently disregard security protocols and policies might pose a risk to the organization’s security.

Mitigating Insider Threats

Proactive measures that can help mitigate insider threats include:

  • Employee training and awareness: Conduct regular security awareness and training programs to educate employees about the significance of insider threats and their role in preventing them.
  • Role-based access control: Implement a robust access control model that ensures individuals have access to only the resources required for their specific job roles, reducing the potential impact of an insider breach.
  • Behavioral analytics: Employ advanced analytics tools to monitor user behavior and detect inconsistencies that could indicate suspicious actions.
  • Develop clear exit procedures: these include the revocation of access privileges and retrieval of company-owned devices and sensitive information from employees leaving the organization.
  • Continuous monitoring and adaptation: Insider threats keep evolving, necessitating ongoing monitoring and constant adaptation of new security measures.

Preventing Insider Threats

  • Conduct comprehensive background checks and verify references during the hiring process to minimize the risk of malicious insiders entering the organization.
  • Ensure employees have proficient skills in deploying and managing complex cloud solutions.
  • Encourage open communication, foster mutual trust, and support employees to reduce the likelihood of disgruntlement.
  • Extend security considerations to contractors, suppliers, and partners with access to the organization’s data or systems.
  • Implement endpoint security solutions to monitor and analyze activities on user devices such as workstations or laptops.

Conclusion

While staying alert for cyberattacks from outside is critical, organizations must not forget that the most significant risk can come from inside the business. Even with the most comprehensive cybersecurity defenses against external hackers, failing to create proactive measures for internal security leaves critical assets open to hidden dangers within the organization’s walls.

Organizations such as the Cybersecurity and Infrastructure Security Agency (CISA) provide information and resources to assist in developing new or improving existing insider threat mitigation programs.

Aug 01
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Compensating Service Members and Establishing Rules and Procedures for Ethical Matters

By Blog, Congress at Work

S 467,S 777,S 30,S 822,S 829,S 359,HR 3831CADETS Act (S 467) – This bipartisan bill was introduced on Feb. 16 by Sen. Gary Peters (D-MI). The purpose of this bipartisan bill is to change the age requirements (previously limited to age 25 and younger) for the Student Incentive Payment Program. This program provides financial support to cadets of state maritime academies who enlist or commission in the Navy Reserve at the time of their graduation. The bill passed in the Senate on March 29 and in the House on June 14. It was enacted on June 30.

Veterans’ Compensation Cost-of-Living Adjustment Act of 2023 (S 777) – This bipartisan bill, which was signed into law on June 14, requires the Department of Veterans Affairs to increase the amount of wartime disability compensation by the same percentage as the cost-of-living increase benefits for Social Security recipients, effective on Dec. 1, 2023. The bill also authorizes a similar adjustment to compensation for people who have not received compensation for a service-connected disability or death. The bipartisan bill was introduced by Sen. Jon Tester (D-MT) on March 14.

Fiscal Year 2023 Veterans Affairs Major Medical Facility Authorization Act (S 30) – This Act authorizes the development of and funding for major medical facility projects by Department of Veterans Affairs during this fiscal year. The bill was introduced by Sen. Jon Tester (D-MT) on Jan. 24. The legislation was passed in the Senate on March 21, in the House on June 20, and was signed into law by President Biden on July 18.

Modification to Department of Defense Travel Authorities for Abortion-Related Expenses Act of 2023 (S 822) – Introduced by Sen. Joni Ernst (R-IA) on March 15, this bill would reverse the Pentagon’s new policy of paying for travel if a military service member goes outofstate for access to reproductive health care. The new rule was in response to recent state laws that functionally banned abortion in locations where military bases are located. Support for the Act is generally split among partisan lines, with Republicans advocating and Democrats opposing. A similar bill has been introduced in the House. The Senate bill is currently under committee review.

Disclosing Foreign Influence in Lobbying Act (S 829) – This bill was introduced in the House by Sen. Chuck Grassley (R-IA) on March 16. It mandates that registered lobbyists must disclose their relationship with any foreign countries or political parties involved in the direction, planning, supervision or control of the lobbyist’s activities. This bipartisan bill (co-sponsored by four Democrats, two Republicans and one Independent) passed in the Senate on June 22. It has been forwarded to the House for consideration.

Supreme Court Ethics, Recusal and Transparency Act of 2023 (S 359) – This Act is designed to strengthen the code of ethics to restrain inappropriate activities of U.S. Supreme Court Justices. Provisions of the bill include expanding circumstances under which a judge must be disqualified; adopting rules for the disclosure of gifts, travel and income received by the justices and law clerks; and establishing procedures to receive and investigate complaints of judicial misconduct. The bill was introduced on Feb. 9 by Sen. Sheldon Whitehouse (D-RI) and is awaiting a formal report out of committee.

AI Disclosure Act of 2023 (HR 3831) – This legislation, introduced on June 5 by Rep. Ritchie Torres (D-NY), would require that any content produced by AI (which includes ChatGPT) be accompanied by a disclaimer that reads: “This output has been generated by artificial intelligence.” The bill has yet to be assigned to committee for review.

Jul 01
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Increased Tax Bills Hitting Private Companies – Big and Small

By Blog, Tax and Financial News

Private companies both large and small are feeling the tax pinch due to changes in the law. With rampant inflation, labor shortages, lingering supply chain issues and increased borrowing costs due to rising interest rates, tax problems are the last thing struggling companies need to face.

While tax rates themselves remain largely unchanged, business’ taxable income is increasing due to changes in three main deduction areas: research and experimental (R&E) capitalization; interest expense deduction calculations; and a reduction in bonus depreciation. All of these provisions were made more liberal in the Tax Cuts and Jobs Act (TCJA) of 2018, but with a wind-down over a 10-year period.

Part of the problem is that these tax law changes can increase a business’ overall tax burden even though there have been no operational changes to the business, leaving less profits than prior years with all other factors being equal. Below, we look at each of the three tax provisions, the changes coming and the impact on businesses.

Stricter Interest Expense Limitations

Tax code section 163(j) limits the amount of business interest expense to 30 percent of adjusted taxable income. The 30 percent limit remains unchanged, but the basis of what constitutes “taxable income” as part of the calculation is becoming tighter.

From 2018 through 2021 year-end, businesses were allowed to add back depreciation, amortization and depletion in coming up with their adjusted taxable income that underlies the calculation. As a result, for 2022 and onward, without these add-backs the taxable income on which the 30 percent limit is applied will be lower, resulting in smaller interest deductions.

Given that borrowing rates have gone up substantially with increases by the Federal Reserve over recent years, now businesses are hit from two sides at once. They are likely to have higher interest costs but can take less as a deduction.

Research and Experimental Capitalization

At one point, business investments in research and experimentation under the TCJA were 100 percent deductible. Starting with 2022 and after, they need to be capitalized over a five-year period (15 years for foreign R&E).

Bonus Depreciation Decreases

Under the TCJA, bonus depreciation allowed immediate expensing and deduction of qualified investments in property and equipment, up through the taxable year-end of 2022. Starting with property and equipment investments placed in service in 2023, however, bonus depreciation is reduced from 100 percent down to 80 percent and decreases by an additional 20 percent each year until the taxable year 2027. From 2027 and onward, there will be zero bonus depreciations available. This will not only increase taxes, but it will also put a hamper on capital investments, rippling through the economy.

Conclusion

There is already chatter about extending some of these provisions, especially regarding bonus depreciation. Optimism on changes or extensions of these tax provisions should be taken cautiously, however. Many predicted that tax bill extenders would be in place before the end of 2022, but that never came to fruition. Right now, businesses are in a wait-and-see situation, with the threat of materially higher tax bills unless Congress does something.

Jul 01
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How Businesses Can Identify and Increase Efficiency with Managerial Accounting

By Blog, General Business News

Managerial accounting is a form of internal reporting that helps business owners and others involved in the organization’s decision making. It looks at individual processes and products to see how they are functioning via practical data points. This is done in hopes of applying data analysis to improve the business’ operational efficiency.

It is important to keep in mind the intended audience and data structure with regard to managerial accounting versus financial accounting. While managerial accountants analyze information, it is not subject to GAAP requirements; however, financial accountants must present company information according to GAAP standards – and such information is often intended for external consumers like investors or lenders.

Measuring Inventory Levels

One way that businesses turn to managerial accounting is through scrutinizing their inventory turnover. Companies that analyze how often they have sold and replenished their inventory over a measured time period can make better decisions about their inventory cycle (production, buying new input materials, marketing, and pricing). Managerial accounting professionals help businesses identify carrying costs of inventory. It’s expressed as follows:

Inventory Turnover = Cost of Goods Sold (COGS) / Average Value of Inventory

Higher ratios usually indicate greater company sales. Lower sales generally indicate there are problems with product or service demand.

Monitoring Outstanding Accounts Receivables

Analyzing accounts receivable can provide beneficial insights on a business’ bottom line. An accounts receivables (AR) aging report categorizes AR invoices based on how long they have been outstanding. The report can categorize how late payables are (30 days or less, 31-60 days, 61-90 days and so on). Based on the results, companies can look at historical data, along with projected sales, to figure out how much they need to allocate for uncollectable accounts. Companies also can proactively reduce credit limits, determine when it’s time to stop doing business with a customer/client, and send unpaid bills to collection.

Price Variance Considerations

When a business looks at price variance, the first step is to take the final price paid for each unit, then subtract the unit’s standard cost from the former figure. The resulting figure is multiplied by however many units were actually bought. It’s a way for managerial accountants to determine the difference, either a positive variance (increased costs above the standard price) or a negative variance (decreased costs relative to the standard price), between the cost planned and the cost at time of purchase.  

The formula is expressed as follows:

Price Variance = (Actual Price – Standard Price) x Actual Quantity

If a business is planning to make a purchase for their next fiscal year, it may want only 5,000 widgets that cost $10 per widget. The business gets a bulk discount of $1 per widget, bringing it down to $9 per widget. However, when the time to purchase the 5,000 widgets comes along, it realizes it only needs to purchase 3,500 widgets. At the quantity of 3,500 widgets, the business won’t receive the bulk discount, reverting the cost back to $10 per widget, creating a variance of $1 per unit or widget.

Using the formula, it could be expressed as follows:

Price Variance = ($10 – $9) x 3,500 = $1 x 3,500 = $3,500. Since circumstances changed at the business between their initial planning and ultimate purchase time-frame, the price variance resulted in $3,500.

While managerial accounting has many different tools for analysis, the one common thread is that regardless of the tool used, managerial accountants help businesses find higher levels of operational efficiency.

Jul 01
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New Personal Finance Provisions in the 2.0 Secure Act

By Blog, Financial Planning

The Continuing Appropriations Act, enacted at the end of 2022, included several provisions that impact retirement plans going forward. Specifically, the legislation enacts SECURE 2.0, an updated version of the Setting Every Community Up for Retirement Enhancement Act of 2019. The following provisions are financial planning considerations that affect individuals.

Increases Catch-up Contributions

Beginning in 2024, catch-up contributions to employer retirement plans made by employees who earn more than $145,000 a year (regularly adjusted for inflation) must be classified as after-tax Roth contributions. This is necessary for eligible plans to retain their tax-favored status.

Starting in 2025, catch-up contributions for participants ages 60 to 63 will increase from $7,500 to $10,000 per year for contributors in most qualified retirement plans. Beginning in 2026, the new catch-up contribution will be indexed to inflation.

Allows Employer Contributions to Roth 401(k)

Employers are now able to make post-tax contributions to a Roth option in an employee’s 401(k) plan. Employers also may open a Roth account option in SIMPLE and SEP IRA plans for employees.

Expands Emergency Distributions from Retirement Accounts

Starting in 2024, there will be a new exception to the rule for early withdrawals from qualified retirement accounts. Distributions used for unforeseeable events, such as a personal or family emergency, will not be subject to the 10 percent early withdrawal penalty. However, the rule applies to only one distribution per year and only up to $1,000. The plan member has the option to repay the distribution within three years. Absent full repayment, no further emergency withdrawals may occur during those three years.

The provision also waives the withdrawal penalty on any amount for individuals certified by a physician to have a terminal illness.

Increases Age for Required Minimum Distributions (RMD)

Starting in 2023, the age that triggers required minimum distributions (and their requisite income tax liability) from qualified retirement accounts increases from 72 to 73. Starting in 2033, the trigger age raises to 75. The RMD rule apples to 401(k), 403(b) and 457(b) plans). Also, starting in 2024, Roth 401(k) accounts will no longer require RMDs.

Reduces Excise Tax on Noncompliant RMDs

If an investor is required to start taking minimum distributions and does not take out the required amount in a single year, he is subject to a tax on the amount not distributed. The tax used to be 50 percent, but starting in 2023 it was reduced to 25 percent. Moreover, if the account owner corrects course and takes the full distribution within a certain window of time, the tax may be further reduced to only 10 percent.

Allows Emergency Savings Accounts

Starting in 2024, the legislation permits employers to offer an emergency savings account option within its retirement plan. The following provisions apply:

  • Employee contributions are made with after-tax income
  • There is an annual cap of $2,500
  • Participants may make at least one withdrawal per month
  • Up to four withdrawals per year are not subject to fees
  • Emergency savings may be held in an interest bearing cash-equivalent account
  • Employers may match contributions, but those must be deposited to the participant’s retirement plan investment, not the emergency savings account
  • The emergency account is portable when the participant leaves the employer and can be rolled into a Roth defined contribution plan or IRA

Permits Employer Match for Student Loan Payments

Presently – through 2025 – employers may contribute up to $5,250 (tax-free) a year toward worker student loan payments. Starting next year, employers have the option to classify those loan payments as contributions to the company retirement plan, such as a 401(k). This allows workers with student loans the opportunity to pay down that debt with their own income and still receive an employer match toward their retirement plan – so they don’t have to choose one or the other.

Jul 01
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6 Ways to Travel on a Budget

By Blog, Tip of the Month

The thrill of summer travel is always invigorating, but the prices to get there can be a real bummer. But not to fear. We’re here with some smart tips that will help you navigate in this price jungle and have a wonderful, memory-filled getaway.

Plan Way Ahead

Even though you can sometimes find great deals at the last minute, if you can wrap your head around thinking in advance about your vacay (especially if you’re buying long-haul flights), it’ll pay off. For instance, if you’re traveling to Europe or Asia, you’ll find that buying your tickets early not only provides significant savings, but also gives you a jump start on exploring other aspects of your trip, like hotels and excursions. Some helpful sites for comparing prices are Expedia, Kayak and Priceline. Check these when planning so you can snag the best deals.

Be Flexible

Do you have to travel in July? What about August? Are the fall and December holidays out of the question? If you aren’t stuck on a certain time of year, you’ll realize some significant savings. Also, must you leave town on a Friday? What about a Tuesday or Thursday? Choosing to fly on weekdays can dramatically change the price of your ticket. Plus, flights can be less crowded.

Create a budget – and Stick To It

While this is a challenge, it’s not impossible. That’s why it’s important to think about where you want to go. For example, San Francisco and New York City might be a little on the pricey side. Another thing to consider is how long you want to be away. If you’re thinking about a two-week long vacation, you might want to be a little stricter with how much you spend each day. That said, don’t be too strict! The whole idea of a holiday escape is to kick back and dive into the culture of a new place.

Choose a Budget-Friendly Destination

As mentioned above, choosing a vacation destination that won’t break the bank is a strategic way to cut costs. Southeast Asia and South America are great places to start. If you’ve decided you must go to Europe, you might want to stay away from the Scandinavian countries. Although they’re crazy beautiful, they have some of the highest cost of living index scores. One way to get ahead of what you might spend is to check out cost of living sites, where you’ll find current stats, estimates, and calculations of how much you might spend each day.

Don’t Overpack

While it’s probably irresistible to overpack (I want to have choices!), if you can travel light, you’ll save on bag fees big time. Even better, if you can limit what you’re taking to just a carry-on, you’ll really avoid those pesky charges, plus it’ll give you the ability to breeze on and off the plane in no time. In terms of what you bring, this also requires some forethought. While packing multiple bathing suits and shorts (if you’re going somewhere tropical) is fun, these fashionable items might be taking the place of necessary gear like a raincoat, a warm hoodie or even a sweater. So take a breath, think through your days and get packing – judiciously, that is.

Find Free Activities

Before you head out on your adventure, let your fingers do the walking over to your favorite search engine and get going. Search “free stuff to do” (or the like) at your intended destination. You’ll find things like free museums, parks, gardens, and festivals. Then let your feet do the walking! Getting outside, weather permitting, and strolling is one of the best ways to soak in a city.

When you can stay on budget and have a fabulous time with family and friends, you’ll not only come back with amazing memories, you’ll also return without a lot of debt. And that’s a fantastic feeling that will stick with you for a good while.

Sources

https://www.worldremit.com/en/blog/migration/tips-to-travel-on-a-budget/

Jul 01
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What Actions Can Data-Breach Victims Take?

By Blog, What's New in Technology

Over the years, millions of individuals have been affected by data breaches, where their sensitive data is accessed by unauthorized cybercriminals or publicly exposed. A data breach can result in huge financial loss if stolen data is used to compromise consumer identity, which also can affect a credit score.

Unfortunately, there is a great number of people who don’t know what to do if affected by a breach. At the same time, there are those in the know who do nothing.

What is a Data Breach?

A data breach is a cyber security incident that exposes sensitive data such as names, contact details, bank details, Social Security numbers, etc.

Data breaches are the work of criminals who aim to obtain specific data. Criminals do this through various methods, including phishing attacks, malware attacks, targeted attacks, vulnerability exploits, and loss or theft of devices. However, data breaches are also a result of technical or human errors. For example, a misconfiguration error exposed the car location data of 2 million Toyota customers in Japan and overseas for 10 years; and the work of an insider led to Tesla’s massive data breach.

Unfortunately, data breach cases keep rising. May 2023 alone saw numerous breaches from different organizations, including healthcare organizations, education institutions, the transportation department and even tech giants.

For companies, the consequences of data breaches are reputation damage, loss of consumer trust, intellectual property theft, financial loss and fines due to failure to conform with data protection legislation. While cybercriminals mainly target organizations, individuals also experience identity theft and financial crimes. This especially happens when stolen data is sold on the dark web or publicly published.

What action can data-breach victims take?

Unfortunately, no one is immune from a data breach. However, victims can survive a breach with less disruption. Once a data breach has occurred, the U.S. breach notification law requires businesses or governments to notify those affected immediately after its discovery.

Although companies are responsible for securing customer data in their possession, customers also have a role to play in securing their data. Essential steps to take include:

  • Being aware of any site claiming to be a data breach check site.
    Such sites could ask for personal information or ask a victim to click a link to verify their details. Hackers also take advantage of a breach and pose as the affected company to lure victims into clicking malicious links, primarily through emails. A user must, therefore, first confirm that a breach happened. This can be in the news or on the affected company’s website.
  • Change passwords for accounts exposed.
    In most cases, affected companies will notify victims of their affected accounts, and their security team will provide instructions on how to stay safe. Such instructions include changing passwords on the breached site or any other account that uses similar login credentials.
  • Set up two-factor or multi-factor authentication (2FA/MFA).
    This extra security measure will require a one-time user code to log in to an account in addition to the login and password.
  • Notify the bank.
    If financial-related data was stolen, such as credit card information, the bank must be notified immediately to freeze the cards.
  • Credit freeze.
    Cybercriminals can use stolen data to open new accounts and take loans. To avoid a ruined credit score, individuals can request a credit freeze from major credit bureaus such as Experian, Equifax and TransUnion.
  • Monitor personal accounts for any unusual transactions.
    Although it depends on the type of data breach and exposed data, victims must look out for unauthorized transactions, including bank account transactions, medical bills, insurance claims and tax refund claims.
  • File a report with the Federal Trade Commission (FTC).
    If criminals have already used personal data, filing an identity theft report will serve as proof to clear one’s name or dispute a fraudulent transaction.
  • Practice cyber hygiene.
    These are practices that help individuals remain safe online. Aside from account security, consumers must use up-to-date software and operating systems, antivirus software, and avoid publishing too much personal information to minimize online footprints that fraudsters can easily access, such as on social media.

It is worth noting that data breaches are not detected immediately, which means that by the time users get notified, cybercriminals already have had access to the data for some time. And as technology advances, cybercriminals are taking advantage of new technologies such as generative AI for phishing attacks. This means that more data breaches may continue to be witnessed.

However, users can help prevent future data breaches by using strong passwords, being cautious of phishing scams, and regularly monitoring financial accounts.

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