Report finds big fraud problems for small businesses
Occupational fraud continues to siphon staggering amounts of money from businesses worldwide, with smaller organizations being hit particularly hard.
That’s one of the trends identified in the 2018 Report to the Nations on Occupational Fraud and Abuse, released Tuesday, April 17, by the Association of Certified Fraud Examiners. The biennial report, which is based on thousands of fraud cases reported by fraud examiners worldwide, provides a detailed look into how fraud is being perpetrated, detected, and combatted in various industries and regions worldwide.
The median loss of the 2,690 frauds covered in the report was $130,000, but businesses with fewer than 100 employees suffered a median loss of $200,000, nearly double that of the $104,000 median loss reported for companies with 100 or more employees. In the 2016 report, examiners reported a median loss of $150,000 for small and large businesses.
How Much Should You Contribute to a 401(k)?
When you start a new job and sign up for your company's 401(k) plan, you will need to decide how much to contribute to the account. This seemingly simple decision will affect how much is withheld from your paychecks, your annual income tax bill and how much money you will have in retirement. Here's how to determine the amount to save in your 401(k) plan.
Qualify for the 401(k) match. Find out how much you need to save to qualify for any 401(k) match your employer provides. The most common 401(k) match formula is 50 cents for each dollar saved, up to 6 percent of pay. Employees in this type of plan would need to contribute as least 6 percent of their salary to the 401(k) plan to get the maximum possible 401(k) match. Saving 6 percent of your pay in a 401(k) plan and earning a 3 percent 401(k) match means you are tucking away an amount equal to 9 percent of your salary each pay period for retirement.
Check your 2018 tax withholding — It may need adjusting
A lot of people like to receive a refund from the IRS, thinking of it as a form of forced saving. On the other hand, if you underpay your taxes by more than $1,000 and don't meet certain exceptions, you could be hit with a penalty.
Too big a refund or too large a tax bill is often a sign that you need to review your withholding. This is especially important in 2018 as it's likely that the Tax Cuts and Jobs Act has affected your tax rate.
Emergency funds: Why they're worth it
Emergency funds can be helpful for everyone. Any unexpected hit to your finances, and unanticipated illness or a natural disaster might all be reasons you may need money right away.
What is an emergency fund?
An emergency fund is designed to keep your life intact during temporary setbacks and to help you avoid unnecessary debt. That means things like car insurance premiums and regular home maintenance (and other anticipated bills) should not be considered emergencies. The same is true of credit card bills for vacations.
How much emergency savings is enough?
In general, your emergency fund should cover three to six months of expenses. How much you'll need will vary based on your financial situation, including the vulnerability of your income.
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Prep for an IRS audit using your 2017 tax return info
An IRS audit is kind of like a flat tire. It's inconvenient and frustrating, and if you're lucky you may never have to experience one. But if you do, you'll be sorry if you aren't prepared.
Fortunately, you can use the information you've already collected (or will collect) for your 2017 tax return to prep for an audit.
Go ahead and use the following as a checklist of items to keep on hand:
- A copy of your signed tax return and all supporting documents
- Copies of any worksheets that support your return
- Forms W-2
- Forms 1099 (all forms)
- Forms 1095 (to support having valid health insurance)