Small Business Owners: Take Note of Verizon DBIR Recommendations for Avoiding a Cybersecurity Attack

Date June 2, 2022
Article Authors

According to the 2022 Verizon Data Breach Investigations Report (DBIR), businesses with 10 or fewer employees are becoming more enticing to cybercriminals. The two most common cybersecurity attacks on very small businesses are ransomware and credential (username and password) theft. A cybersecurity attack or incident can cause severe damage to a company, often irreparably.

The 2022 DBIR includes recommendations for actions business owners can take to avoid becoming a target of a cybersecurity attack. They are worthy of the attention of all business owners, including owners of very small businesses:

  1. Use multifactor authentication.
  2. Do not reuse or share passwords.
  3. Use a password keeper/generator.
  4. Change the default credentials on all hardware and software.
  5. Install software updates promptly so that vulnerabilities can be patched.
  6. Work with vendors to ensure you are as secure as possible and that they are also following the same basic guidelines.
  7. Keep a consistent schedule with regard to backups and maintain offline backups (data not on a device connected to a computer).
  8. Ensure that the built-in firewall is switched on for devices such as laptops and desktops.
  9. Use antivirus software for all your devices.
  10. Do not click on anything in an unsolicited email or text message.
  11. Set up an out-of-band method for verifying unusual requests for data or payments.
  12. Ensure that a computer used for financial transactions is not used for other purposes such as social media or email.
  13. Use email services that incorporate phishing and pretexting defenses and use a web browser that warns you when a website may be spoofed.

The Verizon DBIR provides valuable and actionable information. It is relied upon by cybersecurity experts and business owners across the globe. Click here to watch our recent webinar on this topic.

Speak to one of our professionals about your organizational needs

"*" indicates required fields



Florida Sales Tax Holidays – 2022

Date May 27, 2022
Categories
Article Authors

The Florida Department of Revenue has a dedicated webpage addressing each of the nine sales tax holidays and temporary exemptions scheduled to begin in 2022. The list of tax holidays and exemptions, along with the applicable periods includes:

  • Children’s Books – May 14, 2022 through August 14, 2022
  • Disaster Preparedness – May 28, 2022 through June 10, 2022
  • Freedom Week – July 1, 2022 through July 7, 2022
  • Energy STAR Appliances – July 1, 2022 through June 30, 2023
  • Children’s Diapers – July 1, 2022 through June 30, 2023
  • Baby and Toddler Clothing – July 1, 2022 through June 30, 2023
  • Home Hardening – July 1, 2022 through June 30, 2024
  • Back to School – July 25 through August 7, 2022
  • Tool Time – September 3, 2022 through September 9, 2022
  • Motor Fuel – October 1, 2022 through October 31, 2022

These sales tax holidays and exemption events are a great opportunity for consumers to save money. They allow purchases of defined items exempt from tax so consumers will want to plan their purchases in conjunction with the tax holidays and temporary exemptions.

The tax holidays and exemptions should drive additional sales for retailers, but retailers need to ensure that their point-of-sale systems are properly setup to administer the exemptions. Many of the exemptions are limited by the cost of the item, for example, during Freedom Week there is an exemption on the first $5 of bait or fishing tackle. The exemptions apply to in-store and online sales so it is imperative that even remote sellers apply the exemptions properly to avoid customer service issues.

The Department’s website contains details on each of the tax holidays and temporary exemptions, including lists of qualifying items and information specific to consumers and retailers. The Department’s webpage can be accessed here.

If you have questions any of Florida’s sales tax holidays or temporary exemptions, please contact HBK’s SALT Advisory Group at hbksalt@hbkcpa.com.

Speak to one of our professionals about your organizational needs

"*" indicates required fields



What the 2022 Verizon-Data Breach Investigations Report Means for Your Business: An HBK Risk Advisory Services Webinar

Date May 12, 2022
Article Authors

Date: May 25, 2022

Time: 10:00 – 11:00 am ET

Host: William J. Heaven, CPA/CITP, CISA, CSCP, Senior Director

On May 25, our webinar will feature a review of Verizon’s 2022 Data Breach Investigations Report (DIBR). This is Verizon’s 15th annual DIBR and our third consecutive year dedicating a webinar to discussing this annually updated tool businesses use to evaluate cybersecurity threats they face and determine ways to mitigate them.

We will cover:

  • DBIR terminology
  • Key takeaways from this year’s report
  • Industry highlights
  • Inputs to your IT risk assessment
  • Risk mitigation recommendations

The Verizon DBIR provides valuable and actionable information. It is relied upon by cybersecurity experts across the globe. Our webinar will provide information you can use during the “Identify Risks” and Analyze Risks” steps of your IT Risk Assessment process.

Register today!

Speak to one of our professionals about your organizational needs

"*" indicates required fields



Get Off to a Great Start in 2022: Organize Your Books and Records

Date January 26, 2022
Article Authors
Michael SpagnoloAleigha Withrow
HBK CPAs & Consultants

Your New Year’s resolutions for your business could include starting and maintaining better-organized books and records. Keeping your company’s books organized and updated will help you make informed decisions in real-time. Following are a few easy ways, using Quickbooks, to maintain accurate and available information on your business’s performance throughout your fiscal year.

Reconcile bank statements and credit cards monthly. Knowing how much cash and credit you have readily available is a critical to conducting business. For up-to-date records of balances, perform bank and credit card reconciliations monthly with Quickbook’s Account Balances feature, then reconcile them with your bank’s balances at month-end.

Not only will reconciling ensure the balances on your books match the bank’s, but the Balance Sheet accumulates and summarizes all your cash and credit card totals. Importing, categorizing, and reconciling these transactions each month will greatly improve the accuracy of not only your Balance Sheet but your Income Statement, so long as the transactions are coded correctly. For more information on reconciling, check out: https://quickbooks.intuit.com/accounting/bank-reconciliation/

Organize a relevant numbered Chart of Accounts. To properly import and categorize your transactions, it is vital that you have a clean chart of accounts (COA)—that is, the accounts you use on the Balance Sheet and Income Statement are organized, relevant, and properly set up. Your accounts should also be numbered.

While you might employ many accounts, to be sure that you are starting or assembling your records properly, list each under one of five Quickbooks account Types: Assets, Liabilities, Equity, Revenues, Expenses. As you set up your accounts under these Types, create Parent and Subaccounts to help group your accounts on the Balance Sheet and Income Statement for a more harmonious order of accounts, which will make it easier for you to assess your business’s financial health.

To get started you might adopt the following list of commonly used numbered accounts:

Balance Sheet:

  • 1001 Checking Account
  • 1002 Savings Account
  • 1101 Accounts Receivable
  • 1201 Equipment
  • 1202 Accumulated Depreciation
  • 2001 Accounts Payable
  • 2101 Credit Card
  • 3001 Draws
  • 3101 Retained Earnings

Income Statement:

  • 4001 Income
  • 4010 Other Income
  • 5001 Cost of Goods Sold (COGS): individual COG categories can be listed separately in the 5000 series
  • 6001 Payroll
  • 6002 Payroll Taxes
  • 6003 Meals
  • 6004 Entertainment
  • 6005 Job Supplies
  • 6006 Utilities
  • 6007 Bank Charges
  • 6008 Depreciation Expense
  • 6009 Other Expense

Every company will have a different COA structure of individual accounts, but overall, your COA should be cohesive and formatted for ease of gathering and assessing financial performance as well as for benchmarking your performance to other similar businesses. Quickbooks allows you to modify pre-existing COA accounts. You can merge two accounts or deactivate pre-existing accounts. You can also edit the names and numbers of accounts you are already using. For more information on the Quickbooks COA, visit: https://quickbooks.intuit.com/r/accounting-money/chart-accounts/

Your Meals and Entertainment account serves as an example of why you should update and keep your COA current. Prior to the passage of the Tax Cuts and Jobs Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, 50 percent of your Meals and Entertainment expenditure was tax-deductible. Entertainment is no longer deductible for tax purposes. However, business meals provided by restaurants in 2021 and 2022 are fully deductible, and business-related meals not provided by a restaurant remain 50 percent deductible. Setting up separate accounts for these expenses will be helpful.

Lock your books. An easy step often forgotten in the bookkeeping and accounting process consists of locking your books by using a passcode to restrict access to entering information that precedes a certain date. For example, if you are finished entering information for December 2021, and you believe it is accurate, placing a passcode on your Quickbooks file dated December 30, 2021, will prevent mistakes in January, such as accidentally entering an invoice with a December date, from affecting your December accounting. In such a case, you would be prompted to enter the passcode, a friendly warning to keep you from rendering your December data incorrect. For more information on locking your books, go to: https://quickbooks.intuit.com/learn-support/en-us/help-article/close-books/close-books-quickbooks-online/L59LelyPM_US_en_US

Getting your books and records organized is one way to get your business off to a good start in 2022. Accurate, up-to-date accounting will serve to relieve stress throughout the year. If you have questions or would like help getting better organized and structured, we’re here to help. Contact an HBK professional at 724-934-5300.

Speak to one of our professionals about your organizational needs

"*" indicates required fields



State and Local Tax in 2022

Date January 10, 2022
Categories
Article Authors

As 2021 is over we begin to consider the year ahead and what is in store from a state and local tax (SALT) perspective. Nexus is a significant area of focus in SALT and the evolution of nexus will continue in 2022. The last few years brought us economic nexus via the Wayfair decision and the subsequent economic nexus legislation enacted by the states. The pandemic has also played a large role with employees rapidly shifting to work from home. This transition resulted in temporary nexus guidance from many states to address the related nexus issues resulting from employees moving from office work to working from home.

On the sales tax economic nexus front, 2021 saw the last three states (Florida, Kansas and Missouri) finally pass nexus legislation. The Florida and Kansas laws went into effect in July 2021 and Missouri’s comes online January 1, 2023. Additionally, two states, Maine and Wisconsin dropped the transaction count component of their economic nexus thresholds. The transaction count trend began almost as soon as states began passing legislation as the transaction count threshold (typically 200 transactions) can require small sellers that sell many low-price items to register and collect in many states. The intent of the Wayfair court and to a lesser extent, the states, has been to provide some protection for small businesses. Many of these small businesses simply do not have the resources to administer sales tax in multiple jurisdictions. The elimination of the transaction count threshold in more states will significantly benefit small sellers.

Wayfair or economic nexus became a reality with the court’s decision on June 21, 2018, however; it took months for the states to react. The states had to pass economic nexus laws, provide notice to remote sellers, and address issues of administration. In the subsequent months and years, most states were lax with taxpayers that registered after the effective date of their remote seller law. For example, if a taxpayer registered on April 1, 2019, in a state that imposed economic nexus on October 1, 2018, often the state did not question the timing of the taxpayer’s registration (or the fact that six months passed from the effective date of the legislation). In essence, there was an unspoken grace period offered by many states. The grace period began to fade away in 2021 as we have seen several states starting to question new registrants. Often, the states either send a nexus questionnaire asking for specifics on the date of first sales in the state or they may be more direct and ask the taxpayer to document their sales threshold in the state. Taxpayers should evaluate any historic risk before registering in a new state for sales tax. In some cases, it may be best for the business to pursue a voluntary disclosure if a material liability exists. The tax is required to be paid under a voluntary disclosure, but penalties are abated. In addition, a voluntary disclosure agreement normally has a limited lookback and generally, an agreement prevents a state from reviewing older periods.

One of the primary nexus questions since 2020 has revolved around the impact of the pandemic and the resulting move of employees to remote work. In 2020, many states provided guidance that they would temporarily suspend income tax and/or sales nexus rules if a company’s only activity in the state was an employee temporarily working from home due to COVID-19. In the latter half of 2021 and into 2022, states are lifting their temporary nexus guidance. This will affect businesses in states where employees work from home, but the business is not currently registered for income tax and/or sales tax. Pennsylvania and New Jersey each revised their nexus guidance related to telecommuting employees effective July 1, 2021, and October 1, 2021, respectively. Currently, employees working remotely in either state may create income tax or sales tax nexus.

While we always hope the new year is better than the last, we also expect these nexus considerations to grow in 2022. The impact for some companies will be significant as states move to impose nexus on out-of-state businesses. If your company has employees working remotely or you have increased interstate sales in recent years now is the time to review your nexus footprint. A nexus review can identify tax issues before the state does and offer you the opportunity to control and direct the solution. HBK SALT Solutions is here to assist at any stage from the nexus review process to the tax filings required to obtain compliance. Please contact HBK’s SALT Advisory group at HBKSalt@hbkcpa.com with questions.

Speak to one of our professionals about your organizational needs

"*" indicates required fields