This initial podcast was intended for doctors but it’s applicable to others as well.
Asset protection expert Martin Shenkman gives advice on how to keep your net worth secure.
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Filed under Estate Planning, For Business, For Individuals, Tools
Security professionals advise changing passwords from time to time. Here’s how you do it with the client portal that we provide. The first screen appears when you login.
There are only two steps.
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Filed under For Business, For Individuals, Tools
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For clients using Quickbooks, here’s a useful tip from one of our most trusted sources for software training. The instructors at K2 Enterprises will walk you through the process of limiting your Quickbooks data file to the current year. This will make QB run faster and more efficiently, but this does not solve the IRS problem we wrote about at this link.
It may be a helpful feature to know, but clients are strongly advised to call us for a better way to deal with this problem.
Good idea but not a solution to the IRS problem
Filed under For Business, For Individuals, Tools
by Guest Editor
Rick Viall rviall@viallins.com
Millions of Americans donate time—their most valuable asset—to serve as a volunteer board member on non-profits, booster clubs, churches, PTAs and civic organizations, just to name a few. The decisions these folks make can have a dramatic impact on their respective organization—and not always for the better. If a volunteer endeavor goes bad, would a volunteer board member have coverage against a lawsuit under his or her homeowner’s policy?
Homeowners’ Insurance
The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.
The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.
Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.
There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.
In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.
What to Do
Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you.
The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.
For help in sorting your situation out call Rick Viall, Viall Insurance Agency, 770-487-8310.
Filed under For Individuals, Tools
by Guest Editor
Rick Viall rviall@viallins.com
How safe is private information when stored electronically?
You may not want to know the answer to that question. But if you’re just a bit curious, consider visiting privacyrights.org/data-breach.
The site allows you to scroll through a frequently updated chronological list of reported breaches of private data. Some data are lifted from large companies everyone’s heard of. What’s surprising is how many of the breaches occur at smaller organizations.
The information on this site should serve as proof that when it comes to the safety of personal data, businesses big and small must be on alert!
While it’s the large breaches that make headlines—think Citigroup or Bank of America—smaller businesses may be at a greater risk. They often lack the infrastructure and resources to protect from cyber criminals.
What does a cyber crime cost? According to the Ponemon Institute’s First Annual Cost of Cyber Crime Study, published in July 2010, a business can expect to pay an average of $204 per customer record that is lost or stolen.
Cyber Crime Defined
According to the Ponemon study, the list of cyber crimes is rapidly growing. While many are aware of common cyber crimes, such as identity theft, the list also includes other crimes that can cause damage to a business’s electronic infrastructure. Examples: theft of a business’s intellectual property, the creation/distribution of viruses and malicious code, and the publishing of private data in a public forum online.
Business owners may struggle to keep up with these often-sophisticated threats. Such threats place a tremendous burden on business owners to prevent these losses. Many states have turned to legislation that requires business owners to spend money notifying consumers when a potential breach has occurred.
And some such laws go as far as to require the business owner to help pay the cost of the consumer’s data recovery. In March 2010, Massachusetts became the first state to pass comprehensive legislation requiring business owners to take preventative measures to protect data before the loss happens. Failure to do so can result in fines against the business owner.
Business owners in other states also may be impacted by this law, as it’s designed to protect residents of Massachusetts regardless of where the breach occurs. That means your business, even if located in another state, may be subject to fine if your records contain private information on Massachusetts consumers and those records are breached.
Protecting Your Firm
There are a number of insurance products available to help business owners to deal with the cost of cyber crime. Policies may address both first and third-party losses.
What is a first-party loss? This is a cost the business owners may absorb to cover the firm’s own expenses caused by a cyber crime. Examples may include:
- Notification and credit-monitoring for compromised individuals. (Most states currently have laws in place requiring the business to pay the cost of notifying all consumers that may be victimized by a breach. Most laws require these costs to be paid regardless of whether or not the consumer has suffered financial damages resulting from the breach.)
- Cost to restore data that has been stolen or damaged.
- Lost income resulting from down time caused by a damaged network, lost information or data breach.
How about a third-party loss? When a cyber crime occurs against a business, other parties also could be impacted. A third-party loss describes costs that appear when others incur expenses that can be attributed to the cyber crime. Examples may include:
- Defense costs.
- Judgments and settlements for lawsuits brought by customers, employees and other third parties—such as a company claiming its network was damaged by a virus from another infected network.
- Costs associated with fines or penalties imposed by a regulatory body.
Why Coverage is Critical
Cyber insurance is designed to protect a business when costs are incurred due to a cyber crime. Business owners should note that common insurance policies such as commercial property, . business income, and general liability often restrict—and in many cases exclude—cyber-related damage.
Business owners beware: You should be skeptical of enhancements to such common policies designed to address the cyber exposure. These so-called “cyber enhancements” are often very limited and should not be relied upon without thorough examination of an insurance professional.
Final Note
If you’re a business owner, threats to your data come from a variety of sources. Whether you’re the victim of a random hack, disgruntled former or current employee, angry competitor or anyone else, cyber crimes can serious damage your business. Worse, if the crime results in a breach of private consumer data, state law may impose significant fines that could devastate your firm’s bottom line. For more information about insuring against these growing exposures, call Rick Viall a Trusted Choice® independent insurance agent today. 770-487-8310
Filed under For Individuals, Tools
by Guest Editor
Rick Viall rviall@viallins.com
Remember the days of curling up to the radio on a Saturday night, torturing yourself through commercials and lame tunes just to be able to crank it when Mr. DJ played your favorite song?
No longer does one require the patience to spend an entire evening anticipating the next round of “Love Me Tender” or the BOC’s “Godzilla.” File-sharing programs make an instant world faster—obtaining music and video clips with a click. Popular versions like iTunes legitimize the process through pages of service agreements and per-transfer fees, but every program is not so “official.”
Unauthorized file sharing is easy, cheap (meaning free) and illegal. Consider the recent case of BMG Music et al v. Cecilia Gonzalez. In this case, a federal court ruled that the illegal downloading of songs by a consumer (as in the individual doing the downloading, not the entity responsible for the file-sharing platform) constituted copyright infringement. The damages awarded against her totaled $22,500—for downloading 30 songs at $750 penalty per song.
Seem steep? It could have been much worse. The defendant had actually downloaded 1,370 songs. Federal law permits an assessment of $30,000 per song. Had they chosen the full course of action, damages against Gonzalez in this case would have resulted in over $41 million!
This case is proof that the federal government intends to secure the integrity of copyrights, even if it means rendering judgment against individual consumers. The bad news for these consumers is that such a judgment will not be covered by homeowner’s insurance.
Personal liability afforded under a typical homeowners insurance policy does not cover liability claims that do not involve bodily injury or property damage arising out of an “occurrence.” Since “occurrence” constitutes an accident or exposure to harmful conditions, it is not likely the insurance company will look any further to find a reason to provide you with coverage (downloading that latest Springsteen track for free was no accident).
Even if you did jump that hurdle, you’re still fighting an uphill battle. Property damage constitutes physical injury to tangible property: ripping off mp3 files hardly fits the bill.
Even homeowners with personal injury liability (which extends liability insurance to pay claims such as libel, slander, and violation of privacy rights) are exposed: This insurance says nothing of covering claims of copyright violation, nor will it cover criminal acts.
This information should serve as a somber reminder that households downloading illegal files are in danger of incurring a large out-of-pocket expense that no personal insurance intends to pay. Parents should be especially careful; in many households it is not mom or dad downloading the copyrighted music. A look at the music library on many children and teenager’s computers could shock you—they could have hundreds or thousands of songs. If your children are file-sharers, check their preferred sources for legitimacy and remind them why this is important.
When it comes to downloading music, “free” can come with a big price. Enjoy the tunes but proceed with caution. Ask Rick Viall at 770-487-8310 a Trusted Choice® independent insurance agent to talk with you about these and other possible exposures.
Filed under For Individuals, Tools
A list of your assets is great for estate planning but, in addition, what
your heirs will appreciate is a map to find the items they need after you’re gone. This downloadable form (see the link below) will not only make sure you have the vital estate documents, but will help your heirs to locate them as well.
Filed under Estate Planning, Tools
For estate tax purposes, there are some terrible states to die in this coming year (2012).
Hover over the selected states in the map below and you’ll see what we mean.
Filed under Estate Planning, For Individuals
Our country’s CEO has said we should “share the wealth.” We have a way for you to do just that. By clicking
the circled links, (see the top and bottom sections of a prior post below) you can share a wealth of tax-savings ideas with all your friends who use social media. And best of all, it won’t cost you a cent to spread this kind of wealth.
How to really share the wealth
Filed under For Individuals, Tax, Tools
As if things weren’t bad enough, now the less-than-sterling level of IRS service just got worse.
It’s not just my opinion, check out this eye-opening article from “Forbes.”
The details aren’t all that important. Basically, I called the IRS to discuss a client’s tax matter. While it’s my job to zealously protect the rights of my clients, I am very aware that the person on the end of the line is also doing their job, and as such, I am professional when I speak to the IRS. On this day, I did exactly that. I didn’t raise my voice. I wasn’t nasty. I merely tried to explain that there appeared to have been a cross in communications when the agent cut in abruptly with a brusque “This is how we do it” and then, Click.
I was actually rendered speechless. If you’ve met me, you’ll understand that’s quite the feat.
I called back, only to find that there is no way to speak to a supervisor without putting in a special request. I did exactly that – and I’m still waiting. . . .<< Read the rest of this article>>
Filed under For Individuals, Tax Humor
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This Wall Street Journal Article contains a good overview of the tax breaks available for special education costs.
“More than six million children in the U.S. fall into the “special needs” category, and their ranks are expanding. The number of those affected by one developmental disability alone—autism—grew more than 70% between 2005 and 2010.
The tax code can help—if you know where to look.
There are numerous tax breaks for education, but the most important one for many special-needs students isn’t an education break per se. Instead, it falls under the medical-expense category.
Although students with disabilities have a right to a “free and appropriate” public education by law, some families opt out and others pay for a range of supplemental therapies.
Such families can use Uncle Sam’s medical-expense deduction for help coping with costs, say experts. But many parents and tax advisers overlook it.”
<<Read the rest of the article>>
Filed under For Individuals
This article highlights difficulties that some senior citizens have had with annuities.
Arizona seniors lost millions in annuity fees, lawsuits say
Lawsuits highlight risks for elderly of investment choices
by Robert Anglen - Nov. 7, 2011 12:00 AM-The Arizona Republic
Hundreds of Arizona senior citizens cashed in their retirement investments and paid millions of dollars in unnecessary fees, according to lawsuits accusing a Scottsdale-based estate-planning company of taking advantage of vulnerable clients.
Federal and state court lawsuits claim officials with National Future Benefits Unlimited generated large commissions by scaring and misleading elderly clients into bailing out of existing annuities and buying new ones. The moves left the clients paying steep surrender fees to insurance companies and facing potential tax liabilities, according to the lawsuits.
Annuities, sold by insurance companies and meant to serve as long-term investments, are growing ever more popular as companies attempt to tap the burgeoning population of retirees with offers of lucrative interest rates and guaranteed incomes for life.
In one of the lawsuits, an insurance company is accusing National Future Benefits of systematically targeting clients to cash out their annuities; in the other, an elderly Phoenix couple contend they were defrauded out of most of their assets.
Filed under For Individuals
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The problem is that it’s a deal for the government employees and not the taxpayers.
An IRS early buyout program of up to $25,000 per individual will be offered to 5,400 employees with plans to accept about 1,600 individuals.
Some may debate that fewer agents are worth the price tag, but I wonder if this is how private industry would handle the problem of too many employees?
Filed under For Individuals, Tax, Tax Humor
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This is not the theory discovered by Einstein, but the one that states that certain tax advantages may be disallowed if you sell an asset to someone (or a company) that the tax code calls a “related party.”
Simply put, selling a capital asset at a loss to any of the following entities will cause the loss to be disallowed.
Although there is no current loss allowed, there is still a tax benefit remaining.
Clients can email us for more information.
Filed under Estate Planning, For Business, For Individuals, Tax
During tax season, one of the most oft asked questions is – What do the initials in IRS mean?
We offer the following ideas:
Filed under For Individuals, Tax Humor
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… in a state of confusion and that’s putting it mildly!
Originally, for those dying in 2010, there was no estate tax. Then Congress thought you might not be happy with this arrangement. So they created two methods of taxing estates and determining the basis of inherited assets (see our blog post entitled-Could you actually deduct more than you paid for an asset?). You could have picked either method if you chose by mid-September of 2011. There was just one small problem. IRS hadn’t determined the method of selection by September 15; so the deadline was extended. Traditionally, couples would try to equalize the assets so as not to waste any of the estate exemption every US citizen is given. Now Congress has made the unused exemption “portable” (it can be used by the second to die), but only if you file an estate return to claim it. Thus, thousands who didn’t have to file may need to file an estate return to preserve the remaining spouse’s ability to utilize this new and, for the most part, unknown exemption..
At least one thing is crystal clear. The Federal exemption for estate and taxable gifts is scheduled to drop 80% at the end of 2011. If you’ve ever thought about gifting to your children or other heirs – don’t hesitate any longer.
E-Mail us for specific advice on how to go about this.
Filed under Estate Planning, For Individuals
Not only are there several different types of tax credits and deductions for education, but
Tax Credit for Education
they can vary according to status within college (Freshman,Senior, etc.) and your level of income.
This article from the Wall Street Journal gives
a basic overview of what’s available.
As always, contact us before acting on this or any tax credit.
A brief explanation of these credits and what they cover is
listed below.
[ Note that with the exception of the student-loan interest deduction, taxpayers are prohibited from "double-dipping," or taking more than one tax break for the same expenses.]
American Opportunity Tax Credit. This is one of the best benefits for those who qualify. It’s a dollar-for-dollar tax offset of up to $2,500 per student per year, for up to four years of undergraduate (but not graduate) education for students enrolled at least half-time in a degree program.
Up to $1,000 of the credit is “refundable,” meaning the family can get a check for that amount from Uncle Sam if no tax is due. If the taxpayer writes a tuition check in December for the spring semester, the credit may be claimed for that year’s taxes.
The credit can be used for books, supplies and equipment as well as tuition, but it can’t be claimed by anyone with a felony drug conviction.
For 2011, the benefit fully phases out at $90,000 of adjusted gross income (AGI) for most single returns and $180,000 for most joint returns. If the family can’t claim the credit and the student has earned income, some advisers suggest running the numbers to see if the student qualifies for the credit on his own.
Lifetime Learning Credit. While less generous than the American Opportunity Tax Credit, this is a useful tax offset of up to $2,000 for tuition and fees per year per family. It applies to graduate as well as undergraduate education, plus continuing-education courses taken to acquire or improve job skills.
The credit fully phases out at $122,000 of AGI for most joint returns and $61,000 for most single returns.
Qualified Tuition Programs (“529 plans”). 529 plans are often the best education benefit for taxpayers who don’t qualify for other breaks, in part because there are no income phaseouts. Individual donors (often parents and grandparents) may put up to $65,000 per beneficiary into a 529 plan once every five years, without gift tax consequences.
Filed under For Individuals
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Filed under For Individuals, Tools
| Purpose | Rates 1/1 through 6/30/11 | Rates 7/1 through 12/31/11 |
| Business | 51 | 55.5 |
| Medical/Moving | 19 | 23.5 |
| Charitable | 14 | 14 |
Prior year's mileage rates
Filed under For Business, For Individuals
A look at the numbers below
reveal why the average household
budget is far better managed than
the budget in Washington!
-Why S&P downgraded the US credit rating
• U.S. Tax revenue: $2,170,000,000,000
• Fed budget: $3,820,000,000,000
• New debt: $ 1,650,000,000,000
• National debt: $14,271,000,000,000
• Recent budget cut: $ 38,500,000,000
Now, Let’s remove 8 zeros and pretend it’s a household budget:
• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts: $385
I think we just proved that the average housewife (or husband) is far more fiscally qualified than 90%+ of our Congressmen!
Filed under For Individuals
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