Connect with us

Business Finance

Proposal seeks to simplify tax code for small businesses

Did you know that under the current tax code, small businesses actually pay more money to stay compliant than large businesses do? One proposal seeks to simplify the code and do away with this imbalance.

Published

on

taxes

tax code

Small businesses actually spend more on tax compliance costs

Tax filing takes a lot of time and work as filers go line by line to ensure that everything is accurate and meets government specifications, and that difficulty increases significantly for business owners. Corporate expenditures for professional tax services can be quite costly – in fact, according to the National Federation of Independent Business, small businesses spend $18 billion to $19 billion per year on tax compliance costs alone, a number that is 65 percent higher than what larger businesses spend.

In order to decrease this burden, Ways and Means Committee Chairman Dave Camp (R-MI) recently proposed plans to simplify the tax code for small businesses, which, if implemented, would decrease the amount of time and money these companies dedicate to tax preparation, and instead allow them to reallocate those funds towards job creation and higher wages. For instance, companies could more easily file for the section 179 tax deduction, which allows businesses to claim equipment costs, and also implement a “cash accounting method,” which simplifies accounting processes for companies with less than $10 million in gross receipts.

To options to reform corporate taxes

Camp has proposed two options to reform current corporate tax processes – one option would revise current tax rules and make it easier to operate as a S corporation and gain capital, the other would do away with existing tax rules for S corporations and partnerships, and instead create a singular pass-through process for both. Steven Rosenthal, a visiting fellow at the Tax Policy center says the proposed reform may end up costing the government money as it will provide incentive for C corporations to become a pass-through company and bypass the double taxation they currently operate under. However, those in support of either of the proposals are hopeful that a reduction in tax preparation costs, and an increased ability to more easily and accurately file taxes without outside help, will promote job growth.

If either proposal passes, the simplified tax filing process for small businesses will help owners more easily claim deductions that can in turn be poured back into the company, and ideally increase the accuracy of corporate returns by removing some of the complexities that are currently present.

Comments on Camp’s proposals can be submitted to Tax.Reform@mail.house.gov and indicate in the Subject field “Discussion Draft 3: Comments regarding pass-through entities.”

Destiny Bennett is a journalist who has earned double communications' degrees in Journalism and Public Relations, as well as a certification in Business from The University of Texas at Austin. She has written stories for AustinWoman Magazine as well as various University of Texas publications and enjoys the art of telling a story. Her interests include finance, technology, social media...and watching HGTV religiously.

Business Finance

Is the convenience of payment apps worth the risk of fraud?

(FINANCE) Peer-to-peer payment apps like CashApp and Venmo are quick and convenient – for users and scammers alike. What are Square and PayPal doing to help?

Published

on

CashApp open on phone one of payment apps susceptible to fraud.

More and more people are using peer-to-peer payment services, like Square’s Cash App and PayPal’s Venmo, to make purchases, handle their banking, or just to pitch in on the pizza you and your friends had delivered last night. These payment apps have been particularly useful for folks who may not be able to afford bank fees or have other barriers preventing them from accessing a bank account.

That’s because they are very easy to set up, requiring nothing more than an email address or phone number. Even folks with bank accounts are using these payment apps more as folks are trying to stay home and reduce their in-person contacts during the COVID-19 pandemic. The number of daily users on Venmo has grown 26% since last year.

While these apps bring a lot of convenience to our lives, they have also made running scams more convenient for cybercriminals. According to experts, the rate of fraud on Venmo and Cash App is three to four times higher than with credit or debit cards. While PayPal and Square don’t provide statistics about scams, there are some telling signs. The New York Times and Apptopia, a mobile services tracking firm, found that the number of users mentioning frauds or scams in Venmo customer reviews had increased by four times in the past year.

It seems that Cash App has the most fraudulent activity, with the Better Business Bureau reporting twice as many complaints about Cash App as Venmo, even though Venmo has more users. Zelle has a better track record when it comes to fraud, most likely because it requires a more thorough authentication process when setting up an account. It also has better legal protections for folks who have been scammed.

Some of the things that make these payment apps so quick and easy are exactly the reasons it’s so easy to scam users. The instantaneous payments mean that there’s not much of a vetting process, and not much time to catch a fraudulent transaction before it’s too late. Because you only need an email address or phone number to set up an account, it’s easy for criminals to set up dummy accounts for running scams.

Other scams have been facilitated by the marketing choices of the companies. For example, Cash App regularly runs a Cash App Friday promotion, in which users are rewarded for sharing their username, or $Cashtag, on social media. Unfortunately, this has essentially created a Rolodex of potential victims for criminals.

Square and PayPal are doing what they can to address the problem. Lena Anderson of Square says that they are “aware that there has been a recent rise in scammers trying to take advantage of customers using financial products, including Cash App. We’ve taken a number of proactive steps and made it our top priority.”

One “proactive step” Square has taken is to roll out a customer service phoneline, not only to make it faster and easier for customers to vet potentially fraudulent transactions or report scams, but also because scammers have been creating fake customer service phonelines to target users and collect their personal information. The phoneline is currently available to only some customers, but Square plans to scale it up to be available for all users over time.

Until these companies come up with more robust security systems, there are several things you can do to avoid scams. While you might get a cash bonus from Cash App, it’s probably not worth it to share your $Cashtag on social media. Only share your username with people you know. Never share your personal or banking information with strangers. Examine all transactions carefully. Some scammers are stealing money by making a payment request from an account that looks legitimate, but may have a slightly different spelling or one-letter change in the name.

No legitimate agents of these services should ever ask you for your sign-in code, or to download software, and you shouldn’t click on any links in messages promising cash prizes. Never send small payments in exchange for a promised reward – if it sounds too good to be true, it’s probably a scam. Don’t use digital payment apps to pay for or receive payment from sales on Craigslist, Offer Up, or Facebook Marketplace.

If you think you’ve been scammed, changed your PIN number immediately and contact the company and/or the FTC.

Continue Reading

Business Finance

Curbside pickup’s popularity shows we still like to go SOMEWHERE sometimes

(BUSINESS FINANCE) Online sales are soaring, but it’s not all delivery – the convenience of curbside pickup is widely enjoyed, even if only to drive somewhere.

Published

on

Curbside pickup order being loaded into the back of a van by masked worker.

The COVID-19 pandemic has undeniably altered how customers shop. Not wanting to step inside a store, most people are turning to the internet to purchase the things they need or want. I know I’ve seen more packages on my and my neighbors’ doorsteps this year alone than I have in the past few years combined.

In the first half of 2020, more than 10 million new guests shopped at Target.com. In Q2, Walmart’s U.S. e-commerce sales rose 97%. So, there isn’t a doubt that retailers have seen their online sales skyrocket. However, they have seen a decrease in the number of people shuffling through their doors. More people are hesitant to shop in-store due to health concerns, but this doesn’t necessarily mean they don’t want to venture outside their front porch.

Many customers are not inside a physical store, but a lot of them are right outside on the curb. Curbside pickup has risen in popularity. According to a New York Times article, as of August, three-fourths of the top 50 store-based retailers in the United States are offering curbside pickup. And, curbside is bringing in just as many sales as online ordering.

Walmart was one of the first chains to jump on the curbside pickup bandwagon. In May, Walmart executives reported that four-times more customers tried curbside for the first time. To keep up with what customers wanted, the company expanded its available products to more than 160,000 items, and items can be ready within four hours, as long as the time slot is available.

In August, Target reported that they saw the fastest growth in sales with their pickup service, Drive Up. Sales grew more than 700 percent. To meet the needs of customers, Target increased the number of parking spaces reserved for pickup, and it added fresh and frozen groceries to their service.

Curbside pickup services for most retailers are quite similar. You can order online or through the store’s app. Depending on what notifications you opted for, you will get an email or text to let you know when your order is ready. Once you’re at the store, an employee will place your order in your trunk or backseat.

I started using curbside pickup when everything closed down, and I don’t plan on going back to my old shopping habits anytime soon. For retailers, curbside helps cut expensive delivery costs that come hand in hand with online orders. For customers, curbside pickup not only lets you get your items quicker, but it allows you for a change of pace. Instead of a pile of packages on your doorstep, you can jump in your car. You can drive to the store to get your order with the added convenience of having someone else do all the shopping for you.

Continue Reading

Business Finance

H&M hit with $41 million dollar fine for breaching employee privacy

(BUSINESS FINANCE) Employees’ data privacy has been breached by the fast-fashion giant, invading personal lives by sharing confidential notes around management.

Published

on

H and M storefront where data privacy was compromised.

Swedish fast-fashion chain H&M has recently been fined more than $41 million (35.2 million Euros) for allegedly breaching privacy and tracking the personal lives of their employees on a company database.

The data includes but is not limited to: Workers’ illnesses, religious beliefs, family problems, and vacations. The notes, which were used to evaluate employees’ performances, were often based on workplace meetings and one-on-one conversations. The data collected was intimate, possibly confidential, and very much not meant to be seen and analyzed by others.

As many as 50 other managers were able to view the notes of each employee. Managers at H&M’s Nuremberg customer service center began these practices in 2014, at the very latest.

Regulators are calling H&M’s practices a “particularly intensive interference” with employees’ rights, while Johannes Caspar – the data protection commissioner – called the scandal a “serious disregard” to workers’ data privacy.

Regarding the scale and severity of the breach, Caspar also commented: “The qualitative and quantitative extent of the employee data accessible to the entire management level of the company shows a comprehensive research of the employees, which is without comparison in recent years.”

We live in a world where data is the most coveted commodity. Utilizing employees’ extensive personal details for company gain is morally compromising, as it allows for workers to be manipulated for profit. The situation H&M created has left their employees vulnerable, to say the least.

H&M has commented on the accusations, stating that these practices are “not in line with H&M’s guidelines and instructions”. All in all, the company seems to be cooperating with the investigation. Though they are not able to fully comment on the accusations at this time as the incident is still under legal examination, H&M has stated that they are offering financial compensation to those employees who were at Nuremberg for at least a month since May 2018. They have also stated that they have taken several steps to protect their workers’ data privacy from here on out.

Let’s hope that this multi-million-dollar fine sets a precedence for the rest of the industry – organized data collection and negligence at this scale will not be tolerated.

Continue Reading

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!