How to stay safe after the Equifax data breach

Equifax disclosed last week that the personal financial information of up to 143 million users had been exposed in a massive hack last July. This represents roughly two-thirds of all credit card holders, so you may be affected.

The delay in disclosing is troubling, and the hack raises questions about oversight of the credit bureaus and even about the impact on their management. We can see the impact on investors: the Equifax share price has dropped over 20%

While we can discuss these issues and more, the priority is shoring up your personal credit.

Impact

Was your data taken? There are links from Equifax, Norton and others where you can attempt to determine the impact on you personally. However, these sites seem to default to “you may be affected,” even if you put in bogus information.

The good news is that Equifax has responded to consumer pressure to make certain services free.

Act now

You will want to act as soon as possible to keep your financial information safe.

“There are so many entities who need to check your credit: when you’re renting an apartment, getting insurance, a new cell phone, utilities,” Liz Weston, a financial planner and columnist at NerdWallet, told BuzzFeed News. “But at this point the breach is so great” that taking measures to safeguard your identity is worth it. She recommends instituting credit freezes.

Equifax free service – sign up on line for the complimentary service being provided by Equifax, which provides the following:

  • three-bureau credit file monitoring with alerts,
  • credit report lock,
  • scanning of suspicious sites for use of your social security number,
  • Equifax credit reporting, and
  • $1 million identity theft insurance covering certain out-of-pocket expenses.

Monitor your cards – review your monthly credit card, bank and loan statements for suspicious activity. You have a right to free credit reports so obtain them and review for unauthorized activity.

Also, watch for unexpected calls or mail, such as debt collectors or people posing as IRS agents, because these may be signs that your information may be in the hands of thieves.

Credit freeze – request a freeze on your credit from all three agencies: Equifax, TransUnion, and Experian. Equifax will not charge you but the others will.

Requesting a credit freeze prevents thieves from using your identity to get loans or credit cards in your name, even if your personal information was compromised by the hack. You essentially pay to bar each of three credit reporting agencies — Equifax, TransUnion, and Experian — from providing a credit report without both your explicit permission and a personal identification number (PIN) that temporarily lifts the freeze. (Freezes do not affect financial institutions or companies you have an existing relationship with, only new ones.)

Make sure to place the freeze with all three bureaus and to keep your PINs for unlocking the freezes in a safe place.

“A credit freeze with only one bureau is incomplete protection,” Mike Litt, the consumer program advocate at the US Public Interest Research Group, a consumer group, said. Consumer experts recommended getting a freeze with all three agencies.

There are companies such as LifeLock that provide bundled services. If cost is not an object, that may be the best course of action. Here is the Lifelock response on Equifax.

Fraud alert – if you are certain that your information has been taken, place alert all three credit bureau websites. You can access the TransUnion site here. Some protection is free, but their premium package costs $9.95

If you are the subject of identity theft, there are many resources now that help you report and recover. The Federal Trade Commission website can help devise a recovery plan to implement.

PINs and passwords – the passwords and PINs you use could be the next issue. You may want to change what you use now and update annually, if not more often.

Updates – Equifax continues to provide updates on the status of the hack and their response.

And news sites continue to report on the hack – see this NY Times article.

Summary

There are many steps to take, and the information taken may not be used for some time. So, you will want to take some if not all the steps outlined above. If you have trouble doing so, or if you have questions, let us know.

And for more reading, the Better Business Bureau is one resource for tips on avoiding scams. And, the FTC is a good resource for identity theft.

Good luck and stay safe!

Team THANKS Rides Again – 2017 Pan-Mass Challenge message

Hello all

As promised, I wanted to let you know the outcome of the 2017 Pan Mass Challenge ride that took place last weekend. Team THANKS rode for the second year and had a 2017 goal of raising $40,000. Thanks to you all, we’re on track for hitting our stretch goal of $50,000 – every cent of which will be on its way to Dana Farber to help spark innovation in cancer treatment, save lives, and actually do something about cancer.

This year, my nephew and two daughters took a year off but we added two new team members Kathy Carlson and Nancy Serpa.  We met Kathy on the ride last year through the PMC Pedal Partner program. Her daughter Maddie was battling Ewing’s Sarcoma and is now cancer free.  We encouraged Kathy to join our team this year and she did!  Nancy has been a long time sponsor of our team, and lost her sister to cancer last year.  We also encouraged Nancy to ride with us to do something about cancer and she joined in for the Sunday leg from Bourne to Provincetown.  I crashed while training and had to sit this one out with a broken collar bone, but Jonathan Lilienfeld returned to ride with Kathy from Wellesley to P’town, while Steven Branson and Kevin Lewis rode from Sturbridge.  The five of them met up in Bourne at the end of Day One to continue on to P’town Day Two.

Here’s Kathy with daughter Maddie – our Pedal Partner – at the Lakeville stop on Day 1 with Kevin, Jonathan, and Paul Kennedy of Team PwC.

Here’s Kathy posing with Maddie’s sign at the Pedal Partner stop – what an amazing turn of events to see Maddie beat cancer, graduate from high school, and be getting ready for college in September – all with the help of Dana Farber, her family and friends, and generous people like you.

In Bourne, riders get a chance to share the many personal reasons they ride – Nancy’s post for her sister Sue is below the “D” near the bottom:

Next morning started before dawn, Nancy was ready to ride her first PMC…

But she hit a road grate in the dark that gave her a flat, and the team had to take over the rescue.

Here’s Steven working on the tire:

With that small bump in the road behind them, team THANKS took on the 20 mph winds of Wellfleet and finished strong at P’town!

This victory picture has become a tradition for every PMC ride.

Though I didn’t have a bike to hoist, I was able to join them all – together we did the hard part – raising nearly $50,000 (so far).

Celebrations followed at our favorite P’town beach bar…

Jonathan, Kathy, Kevin, and Steven were treated to a hero’s welcome on their way back into Boston Harbor on the slow ferry.

Thanks again for joining us – we couldn’t have done it without you.

For Team THANKS with much appreciation,

Mark, Captain

___________________________________________________
We’re fighting cancer with Dana Farber by supporting the Pan Mass Challenge

Team THANKS

 

Pan-Mass Challenge, a fun ride for a serious cause

My post-tax season training for the Pan-Mass Challenge, or PMC, did not start off as planned. However, I think I made up for that:

On June 10th, I rode the B2VT from Bedford, MA, to Okemo Ski Resort, Vermont. The 133-mile ride covers 20% more distance than day one of the PMC and has more than double the elevation change (please see my team salute photo above).

I continue to train and promise to be prepared for the PMC weekend in August.

On that weekend, more than 6,000 riders and 3,000 volunteers show our commitment to raising money to battle cancer; 100% what we raise goes to Dana Farber for on-going cancer care, treatment and research.

Please support my ride so we can help make cancer a bad memory; read “why I ride” and donate.

Thank you,

Steven

Tax Law change under the new Trump Administration? Maybe, but too soon for planning

Enacting Major Changes Will Take Time

President Trump made tax reform a key issue in his campaign. He is now president and Republicans are in charge of the House and Senate, so the likelihood of overhauling the federal tax system is better than they have been for decades.

However, President Trump and Congress are trying to enact changes to the Affordable Care Act as well as addressing budget issues and foreign relations. Also, dealing with all the recent hearings involving the FBI have diverted attention. Finally, there are many details that need to be worked out, making it unlikely that major changes will happen until 2018.

Change in IRS Regulations

President Trump has already made changes in IRS regulations. On his first day in office, he temporarily froze tax regulations and then shortly thereafter, ordered that two existing regulations had to be removed for each one that was added. What is the impact?

  • The Trump administration has stated that the two-for-one exchange rule only applies to significant regulatory actions. The rule may not affect the many IRS regulations that are procedural in nature or are needed by taxpayers.
  • One new regulation that has been threatened is the Department of Labor’s new fiduciary rules for retirement advisers. This updated regulation requires retirement advisers to act in their clients’ best interests, which is a stricter standard than was previously required.
  • Also affected are the new partnership audit procedure. A 2015 law streamlined the exam process of large partnerships. The IRS released proposed regulations which implemented the regime on January 18. However, it later pulled the regulations in response to the freeze.

Possible Tax Law Changes – Lower Corporate Tax Rate

Currently, the corporate tax rate tops out at 35%. House Republicans want to lower it to 20% with 25% for businesses that pass income through their owners and for those that are self-employed. President Trump is calling for a 15% corporate tax. In 2014, nearly 25 million Americans filed taxes as sole proprietors (Schedule C), so the change affects many taxpayers.

Tax strategy: Under this change, individuals who are high-earning could become independent contractors or set up LLCs to shift income and advantage of the lower corporate tax rate. Additionally, those who own pass-through businesses could reduce their salaries and take higher profits.

This is how residents of Kansas responded to a similar state law. The state is now working to repeal a law passed in 2012 that exempted pass-through firms from state income tax. The result was that many individuals and businesses in the state restructured their business as pass-through entities or created new businesses to take advantage of the tax break. In just a few years, the number of pass-throughs in the state almost doubled. The state is now facing a large budget deficit as a result because the pass-through exemption is estimated to have cost the state $472 million in 2014 alone. The cost for 2015 was even higher.

The impact of this tax strategy on the 15% tax at the federal level would be expensive. It is estimated to cost up to $1.95 trillion in lost tax revenues over the next ten years. The Trump administration is considering ways to prevent abuse of this low tax rate but any attempt to prevent gaming the system will likely add more complexity to the tax code. Tax-savvy practitioners will likely still be able to find loopholes.

Tax only on Income Earned inside the US

Worldwide income is taxed presently, with credits for foreign taxes paid. The proposed law would generally tax only income that is earned within U.S.

Multinational Tax: A new, low tax on multinationals is part of the proposed tax, added to raise revenue to fund other rate reductions.

Estate Tax Repeal

Republicans would like to repeal the estate tax. President Trump would impose a tax on pre-death appreciation of assets, with a $10 million per couple exemption. There would be no step up in basis at death. And it is likely that gift tax rules would be retained.

Even if the federal estate tax law is repealed, many states will continue to impost a tax. Massachusetts only exempts $1 million of assets passing to someone other than a spouse, such as a trust. New York and other states have higher exemptions. Thus, planning is still important for most people.

Planning Opportunities

With the uncertainty of any change being enacted, this is not an easy year for planning. For example, this may not be the year for a Roth conversion, if tax rates will go down next year. It may not be the time for complex estate planning techniques involving irrevocable transfers, if the estate tax is eliminated in 2018.

We will keep monitoring this to assess any moves that do make sense and update this post when the likelihood of real changes becomes clear.

Divorce, do you litigate or mediate? Well, do you want to be right or happy?

Someone once said:

“You can be right or happy.”

It’s true; and it’s a choice!

Okay, but how does that apply to divorce?

Trying to prove you are right usually means going to court, hoping that the judge affirms your view and declares you the just one. When you try to persuade a judge to adopt your view of “right,” you enter lengthy and costly litigation. In contrast, seeking to be happy usually means using mediation to work out a settlement so you can move on with your life. You save time and money.

Leaving aside situations involving abuse or criminal activity, couples should choose mediation over litigation. When you separate and divorce, you are dissolving a partnership. As with any other financial separation, if you minimize emotional reactions, you are can reach a fair outcome more quickly with fewer lasting scars. And you have are more likely to find happiness in your new, separate lives.

When emotions guide your finances, the outcome is not often the best. Going to court for your divorce will certainly cost more and take longer, but it is also unlikely to result in an outcome with which you are happy.

Costs

The typical cost for mediation in Massachusetts is $3,500. If you choose to go to trial, your cost will exceed $30,000. Add in depositions and expert testimony, and your total will easily exceed $100,000.

Time

The time to complete mediation and sign a separation agreement to sign is up to you. Typically, you can be done in a couple of months. Litigated divorce depends on the judge’s schedule. This means that your first appearance could be six months or more from the date you file. If you have multiple days in court, the total time to completing trial and receiving a final decree from the judge could take well over a year.

Emotions

Litigated divorce involves a battle to show who is right. Attorneys vigorously representing their clients can make the process seem quite nasty. This can lead to anger and hurt feelings that mediation may avoid.

Children

Going to court to fight over finances does not project the best message to children who need love and understanding during the upheaval of their parents separating. The emotional impact of fighting in court can spill over into how parents interact when dealing with their children.

Better Outcome

Successful mediation often reveals possible solutions that other dispute resolution methods may not. If these solutions provide a better result for both parties, then mediation has created a better outcome. s

Save your time and money, use mediation. Then move on. You are likely to be happier this way.