Fortunately, you can take several measures to prevent your email from being hacked, including the following:

1. Use a password manager.

By storing your passwords in a centralized and encrypted location, the password managers can automatically log you into all your online accounts. The password you use to log onto your password manager is the only password you have to remember. According to PC Magazine, Keeper, LastPass and Dashlane are among the best password managers. Something to keep in mind as you select the software that works best for you is that all password managers use “zero knowledge” technology, which means that the company that makes the manager does not know your password.

2. Use two-factor authentication.

By requiring your password plus a second piece of identification, two-factor authentication adds an extra layer of security. Typically, you log into your account with your password and the site replies by calling or texting a one-time code. You can gain access to the account only after you enter that code. A number of two-factor authentication apps are available for businesses, including Authy and Duo.

3. Use a Virtual Private Network (VPN).

VPNs help maintain your privacy when you are using a public network, that is, a network you can use without a password such as one at a café. When you switch on a VPN, your ISP address is routed through an encrypted server. Consequently, while you are on the internet, the VPN will be visible, but your ISP will not. The average cost of a top-rated VPN service is about $10.10 per month.

4. Watch out for phishing emails.

Phishing emails have become quite sophisticated at asking for personal information, but there are some red flags to help you identify them, including the following:

• Poor spelling or grammar
• The address is not quite right — for example, “Microsft” instead of “Microsoft” or a domain suffix that is different than usual such as “.net” rather than “.com”
• Language demanding immediate response
• Requests for payments to be made to a personal bank account or a foreign bank account
• Requests to download something “important”

5. Train the entire staff.

Training is key. Hackers are finding new ways to hack systems and computers all the time. The best thing you can do for your business and personal safety is to train everyone using the system to be alert to possible attacks. Make calling the sender to verify the request a priority.

If you have more questions about staying safe and secure online, contact us today.

© 2021

The post Tips to Prevent Your Email from Being Hacked appeared first on The Accountancy.

The 2017 tax overhaul limited the business deduction as a way of helping pay for the $1.5 trillion set of tax cuts, but the $2 trillion legislative package approved by Congress in March temporarily eliminated some of the restrictions as a way to help businesses cope with the impact of the pandemic.

Under the TCJA, for tax years starting after Dec. 31, 2017, business interest expense deductions are generally limited to the sum of:

• The taxpayer’s business interest income.
• Thirty percent (or 50%, as applicable) of the taxpayer’s adjusted taxable income.
• The taxpayer’s floor plan financing interest expense.

However, the business interest expense deduction limitation won’t apply to certain small businesses, electing farming businesses and certain regulated public utilities. The $26 million gross receipts threshold applies for the 2020 tax year and will be adjusted annually for inflation.

A real property trade or business or a farming business can elect to be exempted from the business interest expense limitation. However, taxpayers can’t claim the additional first-year depreciation deduction for certain types of property held by the electing trade or business.

Taxpayers must use Form 8990, Limitation on Business Interest Expense Under Section 163(j), to calculate and report their deductions and the amount of disallowed business interest expenses to carry forward to the next tax year.

Along with the final regulations, the IRS also issued extra guidance related to the business interest expense limitation. These proposed regulations spell out additional guidance on different business interest expense deduction limitation issues not addressed in the final regulations, including more complex issues pertaining to the amendments made by the CARES Act. Subject to some restrictions, taxpayers can rely on some of the rules in the proposed regulations until final regulations implementing the proposed regulations are published in the Federal Register.

The IRS has also provided an FAQ list regarding the aggregation rules under section 448(c)(2) that apply to the section 163(j) small-business exemption.

Both the final and proposed rules are complex, and companies should get professional advice on how the rules apply to them.

The post Business Interest Expense: The New Rules appeared first on The Accountancy.

To start with, trust beneficiaries typically need to pay tax on the interest income they get from a trust, but not on any distribution from the principal. The logic is that whoever placed the principal in the trust already paid taxes on it. However, trustees cannot decide on their own which part of the trust monies is principal, thus skipping the tax for the beneficiaries. Any funds distributed in a given year are assumed to be that year’s taxable interest income. Only then are distributions considered to be principal. (However, principal may still be subject to capital gains taxes.)

Each year, the trust must send the beneficiaries an annual IRS Form K-1, which breaks down principal from interest income. The trust itself has to file Form 1041, which is similar to the Form 1040 most individuals have submit, except it’s for estates and trusts. If the trust doesn’t distribute all the interest income, then the trust itself has to pay taxes.

Getting into the details

Those are the basics, but trust taxation can get as complex as individual taxes — in fact, there are some similarities. For example, trusts can:

• Take advantage of preferential capital gains rates.
• Earn tax-exempt income.
• Be subject to the alternative minimum tax.
• Deduct certain expenses to reduce taxable income.

However, the organization of each trust makes a difference in how the taxes are handled. For example, with revocable grantor trusts, the grantors pay any taxable income on their returns. It’s the same with an irrevocable grantor trust: The IRS considers trust income as earned by the grantor, even if it is distributed to a beneficiary. Such trusts may give a break on estate and gift taxes, however, which is a boon for the very wealthy. An irrevocable trust that is not a grantor trust, however, is considered a separate entity. In this situation, the beneficiary must pay the taxes.

Charitable remainder trusts are tax-exempt — for the most part. There’s no tax on any income the trust retains. However, any noncharitable beneficiary is still subject to tax.

This is just the beginning; other factors can affect the tax situation. For example, a trust can be the beneficiary of an IRA, but this technique can restrict management of the IRA and requires special trust language.

The bottom line? Families setting up trusts should work with professionals who understand the tax implications of each trust decision — when they’re first set up, and as they start paying out to beneficiaries.

© 2020

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