Twila Van Leer

Small Businesses Also Get Hacked

October 23, 2014 By Twila Van Leer

Scott Schrober, CEO of Varitronic Systems,

Everyone has heard, read about or seen the multi analyses of the disastrous computer breaches at JP Morgan Chase, Target and Home Depot, but what about the small businesses that have suffered similar (possibly greater when you consider scale) crises?

About 44 percent of the small companies in the country have been affected by cyber crime, according to a 2013 survey by the National Small Business Association. The average cost of dealing with the damage was $8,700, the association reported.

The small businesses often become part of the damage inflicted on the larger businesses. When JPMorgan Chase data was breached, for instance, 7 million small businesses shared in the fallout, along with 76 million households. Target Corp., Michael’s Stores, Home Depot and Neiman Marcus, who also reported compromised information in the past year, also have small contracting companies as customers.

Businesses lose revenue when they have to shut down their systems to allow the experts to ferret out the harmful viruses that caused the damage. Additional costs are racked up as the affected companies have to notify each company or individual who was affected by the breach. Most states require a compromised business to notify customers. If lawsuits are brought by injured customers, the costs go up again.

Small businesses sometimes become vulnerable to attack because the owners believe they can’t afford the software programs and consulting services that might protect them, or the time to deal with potential attacks. Some small businessmen and women simply are not aware of the risks. They don’t know that they can be attacked by what they believe is a relatively harmless source. An innocent-seeming email from a friend whose computer has been attacked may mean trouble. Not knowing how sophisticated the enemy has become can be fatal.

Scott Schrober, CEO of Varitronic Systems, took steps to protect his company after a hacker weaseled $50,000 from his company’s bank account recently, an Associated Press story related. Schrober took steps to prevent any further intrusion by investing $50,000 in security and plans and intends to spend another $20,000. He believes his company was targeted because computer security is his business. The thieves were sending a message.

While there is no security system that will absolutely guarantee immunity from hackers, experts suggests that small business owners take these precautions:

Pay a computer security consultant to evaluate your system and make recommendations.
Purchase insurance to cover potential losses. Premiums can be as low as $1,000 for a million dollars in coverage.
Install free anti-virus and anti-malware software that you can find online. Add firewalls that block attempts to access.
Make certain that your email provider has effective security.
Use a separate company to process orders to avoid having customer credit card information stolen. Be certain that the company you collaborate with has a secure system.
Look into a service that specializes in spotting fraudulent credit card transactions.

Be Prepared for 2015 Tax Time

October 19, 2014 By Twila Van Leer

Start organizing your finances now for tax season.

The annual tax frenzy is months away, but there are things you can do in the interim to prepare for tax season, including possible ways to cut your bill.

The obvious place to begin is with a recap of last year’s return. After analyzing the figures, begin to determine where you might make changes for next year. If you expect to make more money this year, for instance, start now to put more into a 401(k) account, contribute to a charity to increase your deduction, or buy tax-deductible items, such as business equipment, before the end of December.

Look back on recent events. If you had a major life change, it is likely to alter your tax status (think marriage or the acquisition of a small business.) You may be wise to consider some professional advice before the deadline looms. Many CPAs find themselves with more time on their hands after the Oct. 15 deadline for this year’s quarterly tax business. Seek help in analyzing your situation.

Experts say too many small business owners wait too long to get advice. Don’t try to find a professional tax advisor after the first of the year. They advise that when your income tops $75,000 annually, you’re ready for a tax expert in your particular field.

In an article by Teresa Mears, the following steps are suggested:

If you pay estimated quarterly tax, be sure you are current with payments to avoid possible penalties if your estimates are short. The sooner you send the money, the smaller the penalty will be.

Decide before the fact who is going to claim children as deductions if you and an ex-spouse have shared custody. Or if you share responsibility for the support of another relative, decide in advance who can claim the benefit. Consider the Earned Income Credit to determine what makes the best sense for your situation.

If you did not purchase health insurance this year, as required, you could face a penalty. See if you meet the criteria for any of several tax exemptions and file for a number, which you can obtain from the Health Insurance Marketplace.

At the same time, check the Affordable Care Act to see if you are eligible for a subsidy. If you received too much subsidy this year, you may have to pay it back. On the other hand, if your income did not reach expectations, you may receive a subsidy through your tax return. But the time to make changes with the Health Insurance Marketplace is now.

Spend the extra money in your flexible spending account if it exceeds $500. You can carry that amount into 2015, but you should not leave an excess in your account. Re-examine your company’s plan. Evaluate this year’s expenses and compare with what you expect in the coming year and consider adjusting your withholding if necessary.

Some taxpayers may choose to accelerate or reduce income to create the best tax stance. Prepaying mortgage and real estate taxes and undertaking optional business expenses before this year is out rather than waiting for next year may make sense for you.

If you sold stocks at a profit, you can offset the tax expense by selling other stocks at a loss.

Increasing contributions to your 401(k) or IRA if you haven’t reach the maximum will improve your tax picture. Donating cash or goods to charitable causes is a nice way to raise your deductions. You need to provide a written proof of donations worth more than $250 and an appraisal for anything over $5,000.

When you are thinking taxes, don’t forget to consider state and local tax levies. States sometimes change their tax formulas and you don’t want to be caught unawares.

Don’t be lax with your business. Treat it as such and don’t ignore quarterly tax payments. If you have been accustomed to doing your own taxes via a software application, it may be time to consult with an accountant to avoid surprises.

Debt May Outlive A Student. What Then?

October 18, 2014 By Twila Van Leer

Who is responsible for a student's school loan debt if the pass away? — Who is responsible for a student’s school loan debt if the pass away?

Young people are expected to live long enough to pay off student debt, but it happens sometimes that they don’t. Parents or other survivors may find themselves assuming debt for which they are not prepared.

Federal students loans are automatically cancelled upon the death of the recipient, but private lenders are not required to forgive such debt. Seeking relief through bankruptcy is not an option in most cases.

Consider the case of a California couple whose daughter died of liver failure before her education debt was paid. The parents took on the care of three grandchildren and because they cosigned on the private student loan they had to assume the daughter’s debt, which she had acquired to attend nursing school. Over the next five years, the balance ballooned to $200,000 and the lender would not forgive the debt, news outlets reported.

The odds of a 27-year-old dying are less than 1 percent, according to the Commissioners Standard Ordinary Mortality Table, but that is small comfort to the California parents whose loss has been complicated by their daughter’s residual debt.

Outstanding student loan debt in the United States has reached an all-time high of $1.3 trillion. Just to earn a bachelor’s degree, the total in loans is likely to reach almost $30,000, the Project on Student Debt at the Institute for College Access & Success, Oakland, Calif., reported.

Most private student loans require a co-signer. About 90 percent of such loans issued in 2011 had co-signers, the Consumer Financial Protection Bureau reported.

Sallie Mae, the country’s largest private lender, offers a Smart Option Student Loan that automatically forgives the debt if the primary signer dies. This lender also has a provision that lowers the interest rate on a regular loan if the parents or some other credit-worthy co-signer must assume the debt. Loans made before 2009 are not covered by the provision, but Sallie Mae may choose to forgive the debt under particular circumstances.

Attorneys with the National Consumer Law Center, Boston, believe there are too few safeguards for students and co-signers who take out student loans. “Ideally, there should be some kind of relief for borrowers in that situation,” said Persis Yu, a staff attorney with the center. The double-whammy of losing a young person pursuing higher education and then being required to repay student loans is “salt in the wound,” he said.

Yu suggests a life insurance policy on the student is the best option to protect co-signers from the financial pain. A policy covering the amount of the loan would pay the debt in full. That provision would spare people already suffering the loss of a family member the additional burden of financial stress related to student loans. Or you could go the safe route and go for the federal loans. Whichever route you choose, wise planning will help in the long run.

Businesses Shore Up Health Campaigns

October 17, 2014 By Twila Van Leer

October is the month designated as Breast Cancer Awareness month.

They are calling it “shared interest”- combining a well-known health campaign with the interests of companies and organizations who support the cause and stand to share in the attention they create.

A notable “for instance.” The city of Chicago has “gone pink,” for October, including lights, banners and flags along its skyline, to help publicize the goals of the annual Breast Cancer Awareness campaign. Those goals include early diagnosis, treatment and research into the devastating woman’s disease. More than 200 of Chicago’s buildings, landmarks and businesses were encouraged to join the effort. The city’s contribution to the Pink Ribbon campaign will be prolonged with a 5K run in November.

Chicago isn’t the only entity doing extraordinary things to share in an effort well known to the American public. On the list are Times Square, ABC News, Blue Cross-Blue Shield, Lexus, Kroger, Macy’s, Go Daddy, the NFL and who knows how many others whose presence in American life is easily identified.

Shared Interest allows these entities to participate in a “higher order purpose” and to align itself with others around a mutual cause, proponents say. They enjoy a “human equity” fallout, proving that sometimes-aloof organizations do have a heart.

The movement has its critics. Some say that the early intervention message gets lost in the hype, that it offsets the important goal of getting more money into research that might find cures for breast cancer. Some of the companies that have rallied to the pink cause even have products and policies that counter the effort – for instance, those that pour carcinogens into the ecosystem.

Breast cancer is not the only campaign that spawns Shared Interest. The ALS Ice Bucket Challenge raised more than $100 million to fight that debilitating disease. It stood out as the poster child for awareness that leads to action.

Last month was Hunger Action Month, with the focus on one in six Americans who go to bed at night hungry. That effort raised millions in money and resources and considerably improved awareness.

The proof of the overall positive result of Shared Interest lies in the increased knowledge the public gains of the very real needs for help in combating some of the most serious problems Americans face. For instance, ask the family of one woman who took the pink ribbon campaign seriously – whatever the source of her information – and got into treatment for her own disease early. Those family members most certainly would support the joint effort to get out the word.

What’s The Price of Speaking Out?

October 16, 2014 By Twila Van Leer

Malala Yousafzai is an example to "the millions of children who brave daunting odds to go to school each day in Pakistan." — Malala Yousafzai is an example to “the millions of children who brave daunting odds to go to school each day in Pakistan.”

In recent years, the world has been made aware of some high-profile instances of women who had the courage to speak up when they believed injustices were being done. And the price they paid for doing so. The incidents have raised the question, how many of us would do the same?

Malala Yousafzai, a Pakistani, was only 11 when she began blogging for the BBC about what she saw as unconscionable repression of women in the matter of education. The daughter of a school principal, she documented the Taliban’s tightening bans on female education, the destruction of some schools and closure of others in her hometown of Swat in northern Pakistan.

Her blatant protests resulted in an attack by a Taliban gunman. He stormed onto the school bus in which she was a passenger and shot her in the head. She survived and her family relocated to England. On her 16th birthday, she gave a speech at the United Nations in New York and she has continued her campaign for education for all children, publishing a book, “I Am Malala,” and establishing the Malala Fund to promote female education around the globe. Recently, she learned she would share a Nobel Peace Prize with Indian activist Kailash Satyarthi. Malala put off celebrating, going instead to her chemistry class in a Birmingham high school. She joked that the money that goes along with the prestigious prize “is not going to help in exams.” She will continue to advocate for the 57 million children who are barred from education.

Briana Aguirre spoke up about the lack of proper protection while treating a patient with Ebola. She risks criticism and losing her job, which her family depends on.

More recently, Briana Aguirre, a nurse in Texas Health Presbyterian Hospital, publicly denounced hospital leaders for failing to adequately prepare staff to care for patients with Ebola, the fatal disease that is ravaging areas of Africa and is now showing up in America. Those who were assigned to attend a patient who contracted the disease were not given adequate clothing to protect them from exposure, she said. Gowns had gaping holes at the neck. Other patients also were put at risk when they were not removed from the area, she said.

The hospital had presented optional seminars once or twice, but provided no hands-on training for those who would work with infected patients, Aguirre said.

Aguirre told Today reporters that hospital administrators did not mention Ebola to staff when the facility accepted Thomas Duncan, a victim of the disease, as a patient. Nina Pham, 26, a fellow nurse, contracted the disease after caring for Duncan. Aguirre then was assigned to care for Pham.

Aguirre, a typical middle class worker, faces financial devastation and possible ill effects to her career.

Congress has stepped in and will grill Texas Presbyterian’s chief executive, Daniel Varga, about the matter. Centers for Disease Control director Tom Frieden, will participate.

The world tends to stand in awe of people like Malala and Aguirre who have the courage to stand up and act on their convictions in spite of the hazards they face in doing so. Even the compensation of a Nobel Peace Prize, in Malala’s case, can hardly do justice to their acts in speaking truth that is unpopular with others.

Congratulations to both these women for filling the void of indifference by those of us who fail to act.