All posts by Chester

Should Companies Deposit Consumer Info into a Data Bank?

Businesses Should Deposit Consumer Information into a Data Bank

 

Consumer Information
Consumer Information

 

Recently, much of the personal data in America has been compromised by hackers. Personal data on government networks and retail databases are no longer safe. These organizations are constantly being exploited on a daily basis. The FBI stated that nearly all companies within the United States have been hacked at one point in time or another – regardless if they realize it or not. This makes me wonder if America can ever completely secure its valuable data networks. Truthfully, the answer to this question is no. This problem will never completely end.

 

History of Security Breaches
History of Security Breaches

 

A Brief History of Personal Security Breaches

In the past companies stored most of their customer information inside of paper files. They usually kept them on their premises. Over the past decade many companies have moved to a paperless format. Store employee and customer information are now stored on database networks or systems. The days of literally breaking into a business to steal consumer information are pretty much over. Also, very few traditional identity thieves dumpster dive for information anymore. Most modern thieves with skills can now do it with a computer.

Back in 2007 TJ Maxx data was exploited and over 45 million people had their debit and credit card information taken away. In 2008 the payment processor for Heartland Systems was compromised. Over 130 million people had their credit and debit card information exposed. Target was hacked for 40 million credit card numbers in 2013. The Home Depot suffered the same fate in 2014 when hackers accessed 56 million cards. Federal employees’ personal information is being taken at an alarming rate in 2015. Once again, we must ask the question about the best way to secure the nation’s data.

 

Concern
Concern

 

Companies and Consumers Should be Concerned About Personal Security Breaches

Companies involved in the data mining business should be concerned (but no worried) about the constant security breaches. Data and information is extremely valuable. Thieves can sell this information to different parties and collect a huge fee. The things hackers can do with a person’s financial information has already been well documented.

However, most people do not realize that their medical, legal and political information can turn a huge profit. A lot of this has to do with fraud. As a matter of fact, a person’s health information can be sold on the Black Market for 10 to 20 times more than credit card information. A lot of the medical fraud that takes place in this country stems from this problem.

 

Protect Personal Data
Protect Personal Data

 

Where is the Best Place to Protect Personal Data?

Over the past few years all of the major data breaches to companies have taken place within their data centers. Some speculate that retail data might not have been compromised if companies used the Cloud. The truth is that the Cloud can even be infiltrated by hackers. It is not a totally secure medium for protecting information.

To be fair, some companies do use the cloud for data. They are able to securely protect their customers information. However, this is no guarantee that they are 100% secure. Venom is a new type of threat to Cloud based systems. It has the potential to take over some of the Cloud’s servers at any given time. Companies such as Amazon and Rackspace use open-source Cloud based data networks. Reports have been coming in about their vulnerabilities. Again, no computing or database is completely safe from hackers.

 

Data Banks
Data Banks

 

Data Banks Might be the Answer to Securing Personal Information

The data security industry is optimistic about protecting personal data. A lot of industry experts, companies and federal agencies are looking to data banks to perform this function. A data bank is a large repository that contains vast amounts of information. They could include Big Data networks that are often used by businesses to store customer information.

A data bank system can have a security protocol that is similar to that of a brick-and-mortar bank. There could be federal, state and local security measures put in place to help regulate these banks. The industry can also have high quality technology placed in around data bank systems. This will help to ensure no one is getting in or out of any data system without clearance.

Ultimately, it is up to entrepreneurs, companies and industry insiders to work together with securing networks. Since the business world is operated by a computer standard the threat of outside intrusions will always be present. As long as the different entities within the industry work together in a positive and cooperative manner personal security can and will be protected. Data banks may or may not be the best way to defend against intrusions. Even if they are not they still can do a lot of good with safeguarding personal information. |They can ensure that people do business without the fear of having their financial information taken away.

From the Author:

Credit for this small business article goes to Neches FCU, Port Neches, TX. Neches FCU is one of the top Texas credit unions and has an attentive team of professionals ready to provide services to our members. When their doors open at any of the several service centers, our goal of “Ultimate Member Satisfaction” becomes the imperative for every employee. They are well-known for a personal, dynamic and upbeat work environment, delivering a memorable service experience, and where members are known personally. Neches Federal Credit Union has approximately $438 Million in assets with over 45,000 members. Neches Federal Credit Union is acknowledged by members and the business community as one of the best credit unions in Texas and an actively involved partner, helping our Family, Friends and Community!

 

5 “Must Know” Items Regarding Domestic Employees and Taxes

Five Things You Should Know Regarding Domestic Employees and Taxes

 

A domestic employee is one who is employed to work inside the household. This includes workers such as babysitters, caretakers, drivers, gardeners and lawn workers, health aides, housekeepers and maids, nannies, and private nurses.

Domestic Worker Bill of Rights legislation has been passed in many states; therefore, people who employ such workers will be taking steps to learn more about the guidelines this year. As a tax preparer, you’ll want to be aware of the questions that may arise. The following are five things you should know regarding domestic employees and taxes:

Contractor
Contractor

1. Employee vs. Independent Contractor

There is a major difference between someone hired as an employee and someone hired as a contractor. Generally, contractors control how the work is performed, provide their own supplies or tools, and offer services to the public. Employees have no control over how the work is performed. The employer sets the hours to be worked, provides guidelines for how to perform the job, and provides the supplies necessary.

Contractors receive Form 1099 while employees receive Form W-2. Household employers must ensure that the person is eligible to work in the United States. Employees must complete the U.S. Citizenship and Immigration Services Form I-9, Employment Eligibility Verification. The employer completes part of the form after verifying acceptable documents which prove a person’s eligibility to work in the United States.

Overtime work
Overtime work

2. Overtime Pay

According to the Fair Labor Standards Act, domestic employees are non-exempt workers. This means that they cannot be paid a fixed salary but must instead be paid hourly. Employers must pay overtime for hours worked over 40 hours a week; however, there are exceptions for live-in employees.

Taxes
Taxes

3. Tax Withholding

Household employers must withhold taxes from the employee or take responsibility for paying them. Employers must withhold Social Security and Medicare taxes if they pay $1,900 or more in cash wages during the year. Cash wages include wages paid by check, direct deposit or money order. Non-cash items such as food, lodging and transportation are not considered cash wages. The withholding amounts are 6.2% for Social Security tax and 1.45% for Medicare tax.

W-4 form
W-4 form

 

It’s not necessary to withhold federal or state income tax, but it is recommended to help the employee avoid underpayment penalties. Household employers may withhold federal or state income tax if the employee requests it. If the employer will withhold taxes, the employee must complete Form W-4, Employee’s Withholding Allowance Certificate.

Tax breaks
Tax breaks

4. Tax Breaks

Many families who hire domestic workers try to avoid tax issues by paying employees “under the table.” But paying wages legally can afford many tax breaks that may offset the costs of being an employer. In fact, in some cases, the tax breaks received may exceed the actual tax costs.

Families who employ domestic workers can use the dependent care tax credit to itemize expenses for dependent care of up to $3,000 per child, with a $6,000 maximum. The dependent must either be under age 13 or be disabled or incapacitated in some way.

Household employers qualify for this credit as long as the expenses were paid to allow them to work or look for work. Qualifying expenses can include the employer’s share of federal and state unemployment taxes, as well as employee wages.

A Dependent Care Account allows families to use pre-tax dollars to pay up to $5,000 for qualifying expenses. This means that the money household employers spend on dependent care is not taxed up front. A Dependent Care Account is also known as a Flexible Spending Account.

Unemployment
Unemployment

5. Workers’ Compensation and Unemployment Tax

Workers’ Compensation is an insurance policy that an employer takes out as protection in case an injury occurs on the job. The proceeds of the policy are used to pay for medical expenses or lost wages.

In some states, the insurance is optional; however, it is highly recommended. Without it, employers would be liable for any costs incurred by the employee. In addition, workers’ compensation protects employers against being sued, as employees who accept the benefits forfeit their right to sue for losses.

Federal unemployment tax provides compensation to employees who lose their jobs. Household employers may be required to pay federal unemployment tax, state unemployment tax, or both. The tax is typically 6% of the employee’s wages, but employers may be eligible for a credit of up to 5.4%. The unemployment tax is not withheld from the employee’s wages; it is paid out of the employer’s own funds.

Maid
Maid

Hiring a domestic employee is a big help to many families; however, many don’t know how to correctly handle the details to make sure they don’t get in trouble with the Internal Revenue Service. As a professional tax preparer, your guidance is needed. You can help families avoid costly mistakes and help them get the tax breaks that they are entitled to.

The bottom line is, tax credits are important for both you and your clients. As a tax preparer, you’ve got to impart this information to your clients effectively. During this tax season, you should consider streamlining your processes to be more of an advisor to clients, instead of doing the grunt work of tax filings.

One way to free up countless hours to advise clients is to efile 1099 and W-2 forms, instead of paper filing. One step further is to use a service that handles the delivery of the recipient tax forms for you. Probably the best known provider that allows you to file 1099 online, as well as doing the delivery of printed forms is eFile4Biz.com.

I’ve attached their video below, but I’ve saved over 260 hours every tax season for the past 3 years using their web software and service. Check them out. They may be a good fit for you.

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