Business Email Scams on the Rise

Cybercrime is all over the news. It seems like there’s a new one reported every day. Well, that’s because it is a daily occurrence. One particular type of cybercrime on the rise is the Business Email Compromise, or BEC. A BEC is a hack where the criminal gets into valid email accounts and poses as a trusted party, like your banker or a vendor, and getting you to send them money. 

Business email compromise scams are on the rise, up 33% from last year, according to the FBI. Losses totaled nearly $2.4 billion in 2021, more than ten times more than just seven years ago. Victims include federal government agencies, insurance companies, energy infrastructure, and computer system vendors. Those are some highly sophisticated players that have invested tons of money in cybersecurity. 

So, what chance does a small business have defending itself against all those sophisticated cybercriminals? Systems are only as safe as the security practices of the least knowledgeable user. All it takes to open the door to a cybercriminal is one person clicking on the wrong link from an unknown source, or from a hacker masquerading as a trusted sender.

Believe it or not, implementing these six low-cost tips can help organizations of all sizes follow safe cybersecurity practices. Even more important, train all team members on safe cyber and send them periodic reminders.

  1. Keep software systems up to date and use a good anti-virus program.
  1. Examine the email address and URLs in all correspondence to detect a scammer mimicking a legitimate site or email address.
  1. Scrutinize all electronic requests for a payment or fund transfers, even from a trusted party.
  1. Ignore text messages, emails, or phone calls asking you to update or verify your account information and go to the company’s website to see if something needs your attention.
  1. Never open unexpected attachments until verifying the sender’s email address and use virus scan before opening any document.
  1. Be extra suspicious of messages that urge immediate action.

With cybercrime in the daily news and business email compromise on the rise, small businesses need to defend themselves. Protecting your systems and your money doesn’t have to be expensive. Promoting a few low-cost cybersecurity tips can help business or all sizes and types avoid becoming a victim of business email compromise. 

Should You Make Estimated Tax Payments?

Did you just pay an extra chunk of money when you filed your 2021 income taxes? Were penalties included? It’s not fun to learn that you owe more in tax when you file your return. But if you earn income from self-employment or get investment income, no taxes are withheld from that income, and you can owe a lot when you file. How can you avoid that expensive bad news? You can project your income tax liability and pay what you expect to owe during the year. 

The IRS requires taxpayers to pay their income tax liability as their income is earned. States that charge income tax and the District of Columbia have similar rules. Employers withhold and remit income taxes to cover their employees’ tax liability on wages and other compensation. But taxpayers with income from interest, dividends, capital gains, and self-employment may need to make estimated tax payments to cover the related income tax liability.

Taxpayers should regularly assess their need to make estimated income tax payments, as well as other taxes such as the self-employment tax. All the necessary details about making payments, when and how much are at https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

The IRS website has a lot of information to read, so let’s boil it down to three important things to know:

  1. When are Estimated Taxes Due?

For estimated tax purposes, the year is divided into four quarters. Although some payments due dates changed temporarily due to COVID, estimated tax payments are general due on April 15, June 15, September 15, and January 15 of the following year. If the payment due date falls on a Saturday, a Sunday, or legal holiday, the payment is due the next business day.

  1. How Much Do You Need to Pay?

Estimated tax payments are based on estimated income and resulting tax liability. An estimated tax payment is due if the liability is at least $1,000, after subtracting withholding and refundable credits. Withholdings or estimated payments must equal or exceed the smaller of 90% of your 2022 tax liability, or 100% of your 2021 tax liability. Calculate your 2022 tax liability at this link https://www.irs.gov/forms-pubs/about-form-1040-es

  1. What if You Don’t Pay Enough?

Interest is due on any unpaid balance, accrued daily from the time the tax liability was created (i.e., by receiving income) until the tax is paid. Interest accrues daily, which can really add to your tax bill. Clearly, the IRS is serious about getting paid on time. Figure your 2022 federal income tax bill by using the IRS Withholding Estimator at https://www.irs.gov/individuals/tax-withholding-estimator.

If you paid a chunk of money when you filed you 2021 income tax return, or if you will receive income with no tax withholdings in 2022, you might need to make estimated income tax payments. The IRS has all the tools to figure it out at https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes.

Not Ready to File by April 18?

Not Ready to File by April 18?

This year, the federal tax filing deadline for taxpayers in most states is delayed from April 15th to April 18th because of Emancipation Day. In Massachusetts and Maine, it’s not until April 19th because of Patriot’s Day. Some other states that have been impacted by federally-declared disasters, like Kentucky, and Colorado, have even longer to file.

Despite the delay, the tax deadline can sneak up on you. If you’re in a panic because you haven’t started gathering your tax documents, you can relax. You can request a tax filing extension to postpone until October 15th. You don’t need to provide a reason for needing the extension, but it does take a little time to get it done right and avoid possible underpayment penalties.

Here are three tips for getting an income tax filing extension:

  1. You Must Apply

Individuals can request a tax filing extension by filing IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, online at the IRS website, via approved tax software, or in paper form. It must be sent or postmarked no later than midnight on the original due date. The extension is automatically approved if a refund is expected or if the estimated amount due is paid with the extension request.

  1. Pay Amounts Due

Use the IRS Form 4868 instructions at https://www.irs.gov/pub/irs-pdf/f4868.pdf to estimate your 2021 income tax liability. Compare your estimated taxes to your tax withholding or quarterly estimated payments and enter the numbers on the extension request. If you owe more in taxes than you’ve paid in, the balance due must be paid with the extension request. Failure to pay the amount due results in an underpayment penalty and interest accrued daily on the unpaid balance.

  1. Check Your State

Each state has its own set of rules and processes for its residents to request an income tax filing extension. Check your state’s tax department website for deadline updates and links to information about requesting an extension of time to file your 2021 income tax return.

Rushing at the last minute is stressful and causes mistakes, especially with an already-stressful activity like filing your income tax returns. Get more time to file your 2021 federal taxes by requesting a tax filing extension. Go to the IRS website at https://www.irs.gov/forms-pubs/extension-of-time-to-file-your-tax-return for details and help estimating any taxes you owe with the extension request.

Reporting Virtual Currency Transactions


Virtual currency is everywhere these days – on the news, in sports-betting commercials, on your
tax documents. Yes, on your tax documents. In case you haven’t heard, the IRS now requires
taxpayers to report transaction activity related to virtual currency. They want to know who is
trading virtual assets and the related income that’s being generated.
All individual taxpayers now must check one box on their tax return answering either “Yes” or
“No” to the question about engaging in transactions involving virtual currency. That’s it. Just
answer the question. But how do you know the correct answer? The IRS recently came out with
some guidance, just in time for tax filing season.
When Taxpayers Can Check “No”
Taxpayers who merely owned virtual currency at any time in 2021 can check the “No” box, as
long as they have not engaged in any virtual currency transactions during the year. Virtual
currency activities must be limited to holding virtual currency in their own wallet or account;
transferring virtual currency between their own wallets or accounts; purchasing virtual currency;
and engaging in a combination of holding, transferring, or purchasing virtual currency.
When Taxpayers Must Check “Yes”
Here is a list of the most common transactions in virtual currency that require checking the “Yes”
box:
● Receipt of virtual currency as payment for goods or services
● Receipt or transfer of virtual currency for free (without providing any consideration) that
does not qualify as a bona fide gift
● Receipt of new virtual currency as a result of mining and staking activities
● Receipt of virtual currency as a result of a hard fork
● Exchange of virtual currency for property, goods, or services
● Exchange/trade of virtual currency for another virtual currency
● Sales of virtual currency; and
● Any other method of disposing of a financial interest in virtual currency.
Virtual currency is considered to be property under tax law. If you dispose of any virtual
currency through a sale, exchange, or transfer, you are not done reporting by simply checking the
“Yes” box. You must and use Form 8949 to figure the capital gain or loss related to the sale and
report it on Schedule D, Capital Gains and Losses.
Want more information on when and how to report virtual currency activity? Check out page 17
of the 2021 Form 1040 Instructions and visit
https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies for other
resources.