October is Cyber-Security Awareness Month! Week 4

Best Practices for Device Applications

by Dan Donnelly

Recently, there was a new, at least for me, phishing attempt through my cell phone. It started like it has hundreds of times before for most of us with someone from an unidentified number trying to call me. However, this “person” didn’t leave a voice mail or hang up, but instead proceeded to leave a text. The text said something about selling your property and cited a specific address, but the person being addressed in the text wasn’t me. My cybersecurity instincts kicked in and I deleted the text and blocked the caller. Even if the caller’s intent wasn’t malicious, it’s better to be vigilant than to have a security breach that could be difficult to fix.

According to Statista, mobile phone users have surpassed the 5 billion mark. Cybercriminals are constantly on the lookout for mobile users who are vulnerable to hacking attacks. There is a certain dichotomy in our mobile devices in that they make our lives easier and can make us more productive while there is always a looming threat of a crippling cyberattack that can alter our lives. Fortunately, there are steps that can be taken to help mitigate the threat.

Here are 10 best practices for mobile security.

1. User Authentication

Restricting access to the device by requiring user authentication. Most mobile devices can be locked with a screen lockpassword or personal identification number (PIN), but these measures are typically turned off by default.


October is Cyber-Security Awareness Month! Week 3

We came across this great article from Wired, which always has some really good information on Cyber-security and staying safe on the internet. Public Wifi is something we get a lot of questions about – how do we make sure our Personally Identifiable Information (PII) is secure on public wifi? Read below to make sure you’re protected…

Simple Steps to Protect Yourself on Public Wi-Fi


October is Cyber-Security Awareness Month! Week 2

Is your Small Business Safe from Cybercrime?

by Terri McDermott

The Internet allows businesses of all sizes and from any location to reach new and larger markets and provides opportunities to work more efficiently by using computer-based tools. Whether you are thinking of adopting cloud computing or just using email and maintaining a website for your business, cybersecurity should be a part of the plan. Theft of digital information has become the most commonly reported fraud, surpassing physical theft. Every business that uses the Internet is responsible for creating a culture of security that will enhance business and consumer confidence.

The Federal Communications Commission (FCC) has released an updated Cybersecurity Tip Sheet. Here are some of those tips:

1. Train employees in security principles

Establish basic security practices and policies for employees, such as requiring strong passwords, and establish appropriate Internet use guidelines that detail penalties for violating company cybersecurity policies. Establish rules of behavior describing how to handle and protect customer information and other vital data.


October is Cyber-Security Awareness Month!

Staying Safe on Social Media

2019 – Week 1

Maintaining anonymity in an information society

By Christina Belfiglio

Have you ever wondered how one might “steal” someone’s identity or hack into their accounts?  There are many ways cyber criminals can do this – purchase data on the dark web, scams that get you to share data, pulling information from old devices (computers, phones, USB drives), and sometimes, you just willingly hand out the information.  Sound crazy?  Have you ever filled out a survey on your social media account?


Considering Moving to Another State?

May 31, 2019 / by Fortis Family Office Tax Team

Establishing State of Domicile for Tax Purposes

Wealthy taxpayers have long assumed that spending a minimum of 183 days, or six months plus one day, in a residence outside a high-tax state would be sufficient to avoid taxes in that state. But advisers note that this long-held belief is not a sophisticated approach. ¹

 Keeping track of where you were, will not be enough for most taxpayers. 

When scrutinized by state authorities, courts look at the totality of circumstance and not just technical check the box type requirements for establishing residency for tax purposes. ²

State authorities will most likely investigate the following circumstances:
  • Where you maintain a driver’s license and vehicle registration.
  • Where you are registered to vote.
  • Where you conduct business.
  • Where your employer resides.
  • The state where you maintain professional licenses.
  • The state where you keep your “near and dear” items (Teddy Bear Test; where you leave your teddy bear, is home). ³
  • The address for insurance, deeds, mortgages, leases, passport, banking statements, utility bills, federal and local tax returns.
  • Receipts for everyday expenses.
  • Active bank accounts/banking relationships.
  • Where your children are enrolled in school.
  • Where you house your pets.
  • Your doctors and lawyers.
  • The state of where you spend the greatest amount of time.
  • The property you own (second homes/vacation homes).
  • Where you declare residency for hunting or fishing licenses.
  • Your memberships to organizations.
  • Where you have social gatherings.

Keep records of your move and consider the factors state authorities look for to challenge state of domicile.  You should consult with a tax professional or adviser for help on how to obtain proof of residency.

¹ NYTimes.com: The Teddy Bear Test, and Other Ways to Pass a State Tax Audit

² “I want to establish Florida residency and avoid state income tax”. not so fast!

³ LATimes.com:The Teddy Bear Test and Other Challenges…

Additional Sources:
Moved to a New State? Be Prepared for a Residency Audit
So You Think You Are A Florida Resident?

Employee or Independent Contractor…Do You Know the Difference?

May 8, 2019 / by Fortis Family Office Tax Team

Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be ¹

How You Pay a Worker Determines How a Worker Pays Taxes

An employee can be paid hourly or salary with bonuses/paid commission.  Employees are taxed on their income and you are required to withhold federal and state income taxes (depending on their state income tax laws) and FICA taxes.

If you are paying an independent contractor, you are not required to withhold federal or state income taxes or FICA taxes. The independent contractor must pay his or her own income taxes (called self-employment taxes), along with income tax on earnings. ³

Also, most employees receive an annual Form W-2 and an independent contractor Form 1099-MISC, which are important when filing income taxes.

How the IRS Determines a Workers Status

If you are unsure how to determine a workers status, consider the three categories the IRS set up as a guideline for employers.  The three categories are –

Behavioral Control – a worker is an employee when the business has the right to direct and control the work performed by the worker. The behavioral control factors fall into the categories of ²

  • type of instructions given
  • degree of instruction
  • evaluation systems
  • training

Financial Control – refers to facts that show whether or not the business has the right to control the economic aspects of the worker’s job.  The financial control factors fall into the categories of ²

  • significant investment
  • unreimbursed expenses
  • opportunity for profit or loss
  • services available to the market
  • method of payment

Relationship – the type of relationship depends upon how the worker and business perceive their interaction with one another, such as, written contracts, benefits, services provided and the permanency of the relationship. ²


To avoid misclassifying a worker you can exercise due diligence.  It is important to know the difference of each workers status and to know how to properly withhold taxes.

¹ https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee



How Do You Distinguish Between a Business and a Hobby?

May 6, 2019 / by Fortis Family Office Tax Team

As you might expect, the IRS distinguishes between legitimate businesses and hobby activities, for the purpose of taxes. If you are legitimately in business, you can deduct the expenses of that business and possibly take a loss if your business isn’t profitable. If you are engaging in a hobby, you cannot deduct expenses to get a loss to offset other income. The IRS calls this the “hobby loss” rule. ¹

Per the IRS, you should consider these factors ²

  • Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  • Whether the time and effort you put into the activity indicate you intend to make it profitable.
  • Whether you depend on income from the activity for your livelihood.
  • Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  • Whether you change your methods of operation in an attempt to improve profitability.
  • Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  • Whether you were successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

It is best practice to follow the IRS guidelines so you can better understand what is considered to be a legitimate business vs a hobby. Keeping track of your business income and expenses throughout the year will help you determine the factors listed above.

¹ https://www.thebalancesmb.com/is-this-business-for-real-or-is-it-a-hobby-397675

² https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

What Should You Be Communicating to Your Tax Preparer?

April 16, 2019 / by Fortis Family Office Tax Team

Communication is key to a successful relationship between you and your tax preparer. The tax preparer may ask certain questions and request information he or she believes is necessary to prepare a complete and accurate tax return.  However, you must understand that the responsibility to provide all necessary information lies with you.¹

Information you should be sharing with your tax preparer:
• New job
• Change in number of dependents
• Change in residency
• Large purchases, such as motor vehicle, boat, aircraft
• Change in marital status
• Salary increase or decrease
• Buy/sell a home
• Contribute to an IRA
• Establish a new trust
• Start a business

In conclusion, it is best to communicate with your tax preparer any life changing events as it can affect your taxes.

¹ https://www.picpa.org/articles/cpa-now-blog/cpa-now/2019/01/23/what-you-need-to-take-to-your-tax-preparer


Are You Aware of the Financial Scams Targeting Elders?

April 4, 2019 / by Fortis Family Office Tax Team

Elderly fraud is becoming a major problem. Ever have a grandparent or parent ask how to access, fix, use, or view something on their iPhone or computer?  They could be asking due to their lack of understanding of advancing technology, which can make them an easy target of financial scams.

The National Council on Aging has identified the top 10 financial scams targeting elders:¹

  • Medicare/health insurance scams
  • Counterfeit prescription drugs
  • Funeral and cemetery scams
  • Fraudulent anti-aging products
  • Telemarketing scams
  • Internet fraud
  • Investment schemes
  • Homeowner/reverse mortgage scams
  • Sweepstakes and lottery scams
  • Grandparent scams

Those with financial and accounting backgrounds, such as CPA’s, can educate clients and family members to avoid financial frauds and scams. The elderly fraud article the PICPA published by Howard M Silverstone and Irina Balashova, is one of the many resources that provide useful information. ²

Additional Resources:

Pennsylvania Institute of Certified Public Accountants (www.picpa.org/consumers/money-life-tips/fraud)

¹ The National Council on Aging (www.ncoa.org/economic-security/money-management/scams-security/top-10-scams-targeting-seniors)

² https://www.picpa.org/articles/picpa-news/2019/02/28/pa-cpa-journal-elder-financial-abuse-is-a-growing-problem-cpas-can-help-prevent-it



What Can You Do Today to Qualify for a 2018 Tax Deduction?

March 28, 2019 / by Fortis Family Office Tax Team

The IRS is reminding taxpayers it’s not too late to make a traditional IRA contribution and claim it on your 2018 income tax return.  Contributions must be made by April 15, 2019 and cannot exceed $5,500, unless the taxpayer was 50 years of age at the end of 2018, the contribution limit is $6,500.

What is a Traditional IRA? Contributions you make to a traditional individual retirement account may be fully or partially deductible, depending on your circumstances.

Making yearly contributions to your traditional IRA can not only build up your savings for retirement, but can typically lower your AGI (annual gross income).  You have until each year’s tax filing deadline to make your traditional IRA contributions.  For 2018 that means you can make your contributions from January 1, 2018 until April 15, 2019.

Keep in mind that not all taxpayers can qualify for this deduction.  It is best practice to always consult with your tax preparer and/or an advisor who can help you determine the type of IRA that can be tax beneficial to you.


Traditional IRAs

Tax Time Guide