Articles tagged with: small business

The Ransomware Threat

Cybercrime has reached a new level.

Imagine cybercriminals holding your files for ransom. It sounds like something out of a movie set in the distant future, but business owners and households are facing such a threat today.

Hackers are now using ransomware to hijack computers and hold files hostage in exchange for payment. Malware programs like CryptoWall, CryptoLocker and CoinVault spring into action when you unsuspectingly click on a link in an email, encrypting all of the data on your hard drive in seconds. A “ransom note” appears telling you that you need to pay $500 (or more) to access your files again. If you fail to pay soon, they will be destroyed.1

Worldwide, more than a million computer users have been threatened by ransomware – individuals, small business, even a county sheriff’s department in Tennessee. The initial version of CryptoLocker alone victimized 500,000 users, generating more than $3 million in payments along the way.2,3

The earliest ransomware demanded payments via prepaid debit cards, but hackers now prefer payment in bitcoin, even though few households or businesses have bitcoin wallets. (The emergence of bitcoin effectively aided the rise of ransomware; keeping the payment in virtual currency is a hacker’s dream.)2,3

If your files are held hostage, should you pay the ransom? The Department of Homeland Security and most computer security analysts say no, because it may be pointless. By the time you get the note, your files may already be destroyed – that is, encrypted so deeply that you will never be able to read them again.

Some people do pay a ransom and get their data back. As for prosecuting the crooks, that is a tall order. Much of this malware is launched overseas using Tor, an anonymous online network. That makes it difficult to discern who the victim is as well as the attacker – if one of your workers thoughtlessly clicks on a ransomware link, you cannot find, scold or even help that employee any more than you could locate the hacker behind the extortion.3

How do you guard against a ransomware attack? No one is absolutely immune from this, but there are some precautions you should take.

First, back up your data frequently – and make sure that the storage volumes are not connected to your computer(s). Cloud storage or a flash drive that always stays in one of your computer’s USB ports is inadequate. If you back up your files regularly enough, weathering a ransomware attack becomes easier.3
Keep your anti-virus software renewed and up to date. Those alerts you receive about the latest updates? Heed them.

Never click on a mysterious link or attachment. This is common knowledge, but bears repeating – because even after years of warnings, enough people still click on mysterious links and attachments to keep malware profitable.

Ransomware is a kind of cyberterrorism. This is why the Department of Homeland Security issues warnings about it. When you deal with terrorists, playing hardball has its virtues. As Symantec Security Response director Kevin Haley told NBC News: “If none of us paid the ransom, these guys would go out of business.”2

Mike Moffitt may be reached at phone# 641-782-5577 or email: mikem@cfgiowa.com
website: www.cfgiowa.com

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – rackspace.com/blog/dont-be-held-hostage-by-ransomware-hackers/ [1/15/15]
2 – nbcnews.com/nightly-news/security-experts-you-should-never-pay-ransomware-hackers-n299511 [2/4/15]
3 – tinyurl.com/n3rcrsm [12/8/14]

Section 105 Plans

Medical reimbursement plans to benefit the smallest businesses.

Some businesses start small and stay small, by design. You may own such a business. Perhaps things begin and end with you, or maybe you employ one other person – your spouse. If this is the case, you should know about Section 105 plans.

Being self-employed, you already know that you can deduct 100% of your healthcare premiums from your federal and state taxes. The tax savings needn’t stop there. A properly structured Section 105 plan may let you deduct 100% of your family’s out-of-pocket medical expenses from federal, state and FICA/Medicare taxes.1,2

That’s right – all of them. TASC, a major provider of microbusiness employee benefits administration services, estimates that a Section 105 plan saves a family an average of $5,000 in taxes a year.2

How does this work? Section 105 of the Internal Revenue Code permits a self-employed person to set up a health reimbursement arrangement (HRA) for tax-free repayment of major qualified medical expenses not covered under a health plan. Alternately, that self-employed individual may hire a salaried employee (read: his/her spouse) and offer that employee an HRA.1,3

If the latter choice is made, the benefits offered will not only cover the employee, but also his/her spouse and dependents. So if the new hire is the business owner’s spouse, what results is effectively a family healthcare expense account.1

Most solopreneurs need to hire someone to get this perk. Can you set up a Section 105 plan without hiring an employee? Yes, if your business is a C-corp, an S-corp, or an LLC that files its federal tax return as a corporation. In a corporate structure, the corporation is defined as the employer and the business owner is defined as a salaried employee.1,3

Otherwise, hiring an employee is a precondition to implementing a Section 105 plan. You don’t necessarily have to hire your spouse – the new hire could be your son or daughter, a more distant relative, or even someone to whom you aren’t related.1

Did the Affordable Care Act restrict the implementation of these plans? Not for microbusinesses. When the IRS issued Notice 2013-54 as a follow-up to the Affordable Care Act, most businesses lost the chance to offer a discrete medical reimbursement plan. One-employee HRAs are still allowed under Section 105 using group or individual insurance coverage.2

Look at all you can potentially deduct. A properly designed Section 105 plan allows eligible employee(s) and their family/families to deduct all health and dental insurance premiums, all life and disability insurance premiums, all premiums for qualified long term care coverage, all Medicare Part A and Medigap premiums, all out-of-pocket medical, dental, and vision care expenses, psychiatric care, orthodontics … anything stipulated as a qualified medical expense in Section 213 of the Internal Revenue Code. Section 105 plans can even be structured so that if an employee doesn’t max out his/her yearly deduction, the unused portion can be carried over to subsequent years.1 

To keep up the plan, keep the paper trail going. A business owner and a financial or tax professional should collaborate to put a Section 105 plan into play. The IRS does look closely at these plans to check that the other spouse is legitimately employed – salaried, working a set schedule of hours, and hired per a written agreement. In addition, appropriate tax forms must be filed with the IRS, including Form 940 if the employee is unrelated to the business owner.1

If you want to lessen your tax liability and create an expense account to meet unanticipated medical costs, consider doing what other microbusiness owners have done: set up a Section 105 plan.

Mike Moffitt may be reached at 1-800-827-5577or email mikem@cfgiowa.com

website  cfgiowa.com

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC.  Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor.  Cornerstone Financial Group and AIM are separate entities from LPL Financial.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – tasconline.com/products/agriplan/section-105-plan-2/ [4/15/14]

2 – theihcc.com/en/communities/hsa_hra_fsa_admin_finance/hras-are-still-a-viable-tax-savings-device-for-sma_hsnc3u8t.html [3/10/14]

3 – smallbusiness.chron.com/can-business-owners-reimburse-themselves-taxfree-health-insurance-38718.html [4/15/14]