Experts Predict Phishing Scams to Increase in 2020

Hospitals, accountants, law offices and other businesses have volumes of juicy, valuable personal and confidential information in their computer systems. Human beings who are imperfect work in those businesses Cyber thieves know that, so they work every day to break into computer systems to steal valuable financial and personal data. One popular method is to send “phishing” emails with links that infect the user’s computer and all the systems it touches.

Man wearing a mask in dark room in front of computer

Experts are predicting that phishing scams will increase in the 2020s, probably because they are so successful. The Seventh Annual Edition of Experian’s 2020 Data Breach Industry Forecast includes some scary predictions about phishing scams and their potential impact. Hackers are going to new heights to steal and exploit the vulnerabilities that exist in today’s technology.

You can read details of Experian’s Forecast here – https://www.experian.com/data-breach/data-breach-industry-forecast. But what can you do to protect your business?

Here are five tips to secure your computer environment and protect your data:

  • Phishing emails – Never open an email from a suspicious source, click on a link in a suspicious email or open an attachment without scanning it first. Otherwise, you could be a victim of a phishing attack and your data could be compromised. Never click links within pop-up windows, download “free” software from a pop-up, or follow email links that offer anti-spyware software. The links and pop-ups could be installing the spyware that they claim to be eliminating. 
  • Two-Factor Authentication – Many email providers now offer two-factor authentication to add an extra layer of protection. Often, two-factor authentication means the returning user must enter username and password plus another step, such as entering a security code sent via text to a mobile phone. A thief might snag you username and password but it’s highly unlikely they also would have the mobile phone to receive the security code.
  • Backup software/services – Critical files on computers should routinely be backed-up to external sources, such as a cloud storage service or an external hard drive. Periodically verify that the files are backed up and can be retrieved. Backups give you assurance in the event your business is victim to a phishing scam.
  • Anti-Virus Software – Anti-virus software scans computer files or memory for certain patterns that may indicate the presence of malicious software or definitions of known malware from cyber criminals. Anti-virus vendors find new issues and update malware daily, so it is important that you have the latest updates installed on your computer by setting it to automatically receive the latest updates.
  • Firewalls – Firewalls provide protection against outside attackers by shielding your computer or network and preventing malicious software from accessing your systems. Firewalls can be configured to block data from certain suspicious locations or applications while allowing relevant and necessary data through. But remember, firewalls do not prevent attacks; they protect against malicious traffic (unless the user accidentally installs malware – see “phishing”).

Huge volumes of valuable personal and confidential data mean that hackers will go to new heights to steal and exploit the vulnerabilities in our systems through phishing emails and other tools. Following the five security tips above will help to secure your computer environment and protect your data from cyber scams.

Do You Have to Take an RMD for 2019?

Are you age 70½ years or older? If yes, you need to pay attention to the Required Minimum Distribution (RMD) rules for traditional IRAs, 401(k) plans and other pre-tax retirement plans. Tax law doesn’t allow your untaxed money to go untouched indefinitely. RMD rules are intended to make sure that Uncle Sam gets his share of at least some of what you saved for retirement. 

Even if you aren’t close to age 70½, it’s good to know these Four RMD Facts:

  • How is the amount of the Required Minimum Distribution (RMD) calculated?

An RMD is calculated separately for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy table published by the IRS. Life expectancy tables vary based on your individual situation, such as “Joint and Last Survivor,” “Uniform Lifetime” and “Single.”

  • When must I receive my RMD from my IRA?

You must take your first RMD for the year in which you turn age 70½. However, the first payment can be delayed until April 1 of the year following the year in which you turn 70½. For all subsequent years, including the year in which you were paid the first RMD by April 1, you must take the RMD by December 31 of the year. 

  • What happens if a person does not take a RMD by the required deadline?

If an account owner fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%. The additional tax is reported on IRS Form 5329Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with the federal tax return for the year in which the full amount of the RMD was not taken.

  • Can a person avoid taxes on her or his RMD?

Charitable donations can be made directly from a traditional IRA to save on taxes. People who are age 70½ and older can transfer up to $100,000 yearly from IRAs directly to charity. The IRA funds must go directly to a charitable organization. Make sure you get a receipt and an acknowledgement from the charity to substantiate your donation.

All of that information is not easy to absorb. No extra charge for reading the Four RMD Facts again. Still want to know more about RMDs and how to calculate them? Check out the IRS website at https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions#4.

Financial Duties of NonProfit Boards

Last week’s blog post, “Financial Skills for Effective Nonprofit Boards,” described some professions to keep in mind when recruiting finance-savvy Board members. This week, we talk about the financial duties of nonprofit Boards to fulfill the stewardship and oversight role known as “Fiduciary Responsibility.” 

Understanding how to fulfill fiduciary responsibilities is critically important because nonprofits collect and spend other people’s donated money. Plus, the term “Fiduciary Responsibility” is legally defined. Failure to act with due care and loyalty to the organization can have serious consequences, such as loss of public trust. 

Responsible and effective nonprofit Boards engage in these four activities to fulfill fiduciary duties to oversee the organization’s finances:

  • Establish Financial Policies

Documented policies are essential for establishing a common understanding and framework for overseeing the organization’s financial resources. Board-level financial policies define authority, delegation to management, investment objectives, risk tolerances, and risk mitigation activities to protect and preserve assets.

  • Monitor Financial Performance

Board members must receive complete periodic financial statements to oversee financial performance in relation to the budget, financial ratios, and other objectives. Financial oversight responsibilities can be performed by a Finance Committee but results must be reported to the full Board.

  • Ensure Audit or Independent Review is Conducted

The Board must be familiar with financial statement audit and IRS information reporting requirements. If applicable, based on income and asset levels, the Board is responsible for hiring the auditor and receiving the audit results. Nonprofits with income and assets below the audit thresholds should consider an independent financial review.

  • Take Corrective Action on Audit/Review Results

The results of any audit or independent financial review should be received by the Finance Committee and reported to the full Board. Reported issues or risks should be acted upon. The action plan and progress on taking corrective action should be documented and reported to the full Board.

Nonprofit Boards that address these four financial oversight activities are more likely to make appropriate financial decisions, and helps ensure that the nonprofit meets donor expectations to protect and preserve the organization’s assets, and to ensure that regulatory and legal requirements are addressed. 

Want to know more? Check out these resources for Nonprofit Boards at https://boardsource.org/board-support/.