Unreliable or Fraudulent Insurance Coverage

Bad faith denials of claims by insurers are illegal, but some dishonest companies or agents attempt them anyway. It’s possible that just when you have the greatest need, you’ll find yourself out in the cold. Unfortunately, there aren’t a lot of great legal remedies. So it’s critical to avoid unreliable and fraudulent insurance coverage in the first place. Legal contract  An insurance policy is a contract. The insured agrees to pay premiums and take reasonable steps to prevent injury or damage, and the insurer agrees to settle legitimate claims according to the policy’s terms. Not only is it good business practice for insurers to cover legitimate claims, but it’s illegal for them to deny them.  There may be times when you and your insurer disagree about what’s covered...

Assess Your Supply Chains Fraud Riak

The COVID-19 pandemic has put enormous pressure on global supply chains. As companies struggle to obtain the goods and materials they need, they may not pay as much attention to potential fraud signs. Unethical employees and organized crime gangs have only been too willing to take advantage of the situation. Consider conducting a targeted risk assessment that focuses on the changes that have occurred since the pandemic began. Although a targeted assessment isn’t a substitute for an all-encompassing review, it can help prevent certain threats from resulting in huge financial losses.   Four items for review  As part of your assessment, review: Changes in the operating landscape. As the pandemic took hold, both individual businesses and the larger marketplace changed. Some of those changes were readily apparent, such as...

Some 2020 Unemployment Compensation is Tax Free

In recent months, there have been a number of tax changes that may affect your individual tax bill. Many of these changes were enacted to help mitigate the financial damage caused by COVID-19. Here are two changes that may result in tax savings for you on your 2020 or 2021 tax returns. The 2020 return was due on May 17, 2021 (because the IRS extended many due dates from the usual April 15 this year). If you couldn't file by that date, you could have requested an extra five months to file your 2020 tax return by October 15, 2021. Your 2021 return will be due in April of 2022. Some unemployment compensation from last year is tax free Many people lost their jobs last year due to...

Somethings Wrong in your Office Is it Fraud

Not all red flags lead to active occupational fraud schemes. But when fraud is occurring, it usually leaves traces — for example, accounting anomalies — for fraud experts and other knowledgeable people to find. Owners and executives, as well as rank-and-file workers, should be familiar with the signs of fraud and know when to call in a forensic accounting specialist. Take a closer look  Dishonest employees may use anything from fictitious vendors to false invoices to cover up theft. To ferret out potential fraud, always investigate duplicate payments, out-of-sequence entries, unusual inventory adjustments and accounts that don’t properly balance. Transactions for amounts that appear too large or too small, or transactions that occur too often or too rarely also merit a closer look. An increase in the number...

Claiming the Business Energy Credit for Using Alternative Energy

Are you wondering whether alternative energy technologies can help you manage energy costs in your business? If so, there’s a valuable federal income tax benefit (the business energy credit) that applies to the acquisition of many types of alternative energy property. The credit is intended primarily for business users of alternative energy (other energy tax breaks apply if you use alternative energy in your home or produce energy for sale). Eligible property The business energy credit equals 30% of the basis of the following: Equipment, the construction of which begins before 2024, that uses solar energy to generate electricity for heating and cooling structures, for hot water, or heat used in industrial or commercial processes (except for swimming pools). If construction began in 2020, the credit rate is...

Determining the "Basis"in your Residence

The housing market in many parts of the country is strong this spring. If you’re buying or selling a home, you should know how to determine your “basis.” How it works You can claim an itemized deduction on your tax return for real estate taxes and home mortgage interest. Most other home ownership costs can’t be deducted currently. However, these costs may increase your home’s “basis” (your cost for tax purposes). And a higher basis can save taxes when you sell. The law allows an exclusion from income for all or part of the gain realized on the sale of your home. The general exclusion limit is $250,000 ($500,000 for married taxpayers). You may feel the exclusion amount makes keeping track of the basis relatively unimportant. Many homes...

Keep Fraud Out of your Law Firm

As counterintuitive as it may seem, law firms aren’t immune to criminal activity. Because some firms place enormous pressure on attorneys to produce billable work, they may be particularly vulnerable to fraud. Your firm needs to know what to look for and how to protect itself from potential schemes perpetrated by partners, associates and support staff. Hold everyone to high standards A firm’s accounting department — payroll and accounts payable and receivable — is where fraud often occurs. But even trusted partners should adhere to your firm’s internal controls and fraud-prevention processes. All prospective employees, regardless of level, need to complete an employment application with written authorization permitting your firm to verify information provided. Then, call references and conduct background checks (or hire a service to do it)....

Simple Retirement Savings Options for Your Small Business

Are you thinking about setting up a retirement plan for yourself and your employees, but you’re worried about the financial commitment and administrative burdens involved in providing a traditional pension plan? Two simple retirement savings options to consider are a “simplified employee pension” (SEP) or a “savings incentive match plan for employees” (SIMPLE). SEPs are intended as an alternative to “qualified” retirement plans, particularly for small businesses. The relative ease of administration and the discretion that you, as the employer, are permitted in deciding whether or not to make annual contributions, are features that are appealing. Uncomplicated paperwork If you don’t already have a qualified retirement plan, you can set up a SEP simply by using the IRS model SEP, Form 5305-SEP. By adopting and implementing this model...

Being More Productive with the 80/20 Rule

As posted to the FightMediocrity YouTube Channel on 10/24/14 (Run time: 3 min, 52 sec) In this thought provoking clip, FightMediocrity provides a quick review and recommendation of "The 80/20 Principle" by Richard Koch. The unspoken corollary to the 80/20 principle is that little of what we spend our time on actually counts. But by concentrating on those things that do, we can unlock the enormous potential of the magic 20 percent, and transform our effectiveness in our jobs, our careers, our businesses, and our lives. (This is Blog Post #1020) FightMediocrity is dedicated to fighting mediocrity through big ideas. The artist picks some of his favorite books in self-improvement and self-help that he has found useful on his personal development journey, animates them, and shares them with his...