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Borrowing From Your Retirement Plan: New CARES Act Rules

4 min read

Borrowing From Your Retirement Plan: New CARES Act RulesIt’s been nearly half a year since Americans first became widely aware of the coronavirus contagion within the United States. While for a brief month it looked as if we had the virus in hand, since then it has spread wildly out of control in many areas.

People who did not suffer dramatic financial consequences in the early stages of the pandemic could see some hard days ahead. For this reason, it’s a good idea to become familiar with the new relaxed rules associated with withdrawals from tax-advantaged retirement plans.

In late March, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act). This bill offered provisions related to distributions from retirement accounts such as an IRA or 401(k). One of the key goals was to enable workers to make penalty-free withdrawals from a retirement plan to help sustain them while out of work due to the coronavirus.

To be eligible to make penalty-free withdrawals, plan participants must meet one of the following criteria:

  • The account owner, spouse or a dependent is diagnosed with COVID-19
  • The account owner experiences one of the following financial consequences due to the virus:
    • Furloughed
    • Laid-off
    • Work hours reduced or place of business closed (including for self-employed)
    • No access to childcare
    • Quarantined

The Act stipulates that workers can self-certify that they meet at least one of the criteria. Be aware, however, that if it is later discovered that the account owner did not meet the criteria for a coronavirus-related distribution, he might be required to pay the early withdrawal penalty.

Also note that while this penalty is waived for qualified workers, they must still pay income taxes on the amount withdrawn. However, there are a few ways to mitigate the income tax burden on those withdrawals. The first is to through a regular distribution. These are the parameters:

  •  You have up until Dec. 30, 2020, to make a distribution
  • The total aggregate limit is $100,000 from all plans and IRAs
  • The distribution waives the 20 percent income tax withholding requirement
  • Income taxes will be due when filing a 2020 tax return
  • Retirement account owners who no longer work for an employer are free to take a distribution
  • Current employees may take a distribution only if the employer plan allows for a hardship or in-service distribution (note that the CARES Act permits employers to amend plan documents to allow coronavirus-related distributions)

While a retirement plan distribution does trigger income taxes for the tax year withdrawn, you can spread the tax burden out over three years. For example, let’s say you withdraw $18,000 this year. You may report the full amount as income on your 2020 tax return; or you can claim $6,000 a year on your 2020, 2021, and 2022 returns. This strategy reduces the chances of bumping your income into a higher tax bracket.

The second way is to pay the distributed amount back into your retirement plan. Initially, you will have to pay income taxes on the amount withdrawn. However, if you pay it back within three years, you can file to get the taxes you paid refunded. One caveat with this plan is that eligible retirement plans will treat repayment of this type of distribution as a rollover event for tax purposes. Be aware that if the retirement plan does not accept rollover contributions, it is not required to change its terms for this purpose.

Your third option is to withdraw money as a loan if your employer permits loans from the retirement plan. This is another scenario in which you must repay that money within a specified time period. You do not have to pay income taxes on the loan, but you do have to pay interest on the amount borrowed. The good news is that the interest you pay also goes into your account.

Under normal circumstances, retirement account loans are limited to $50,000 or 50 percent of the account balance, whichever is less. But for a coronavirus loan, you may borrow up to 100 percent of your vested balance or $100,000, whichever is less. You will need to repay that loan within the plan’s stated repayment period, although the CARES Act gives 2020 borrowers an additional year to repay this type of loan from an eligible retirement plan. Be aware though that you’ll owe both income taxes on the outstanding balance and the penalty for withdrawals made before age 59½ if you do not repay that loan in time.

Note that these CARES Act provisions are available only for the first 180 days after the Act was passed, which was on March 27, 2020. As Congress debates new legislation to aid struggling Americans suffering from the pandemic, this provision could be extended.

Relief and Funding for Human Rights, Emergency Aid, Cash-Flow Assistance and New Infrastructure Projects

3 min read

Relief and Funding for Human Rights, Emergency Aid, Cash-Flow Assistance and New Infrastructure ProjectsLaw Enforcement Suicide Data Collection Act (S 2746) – This bill authorizes the establishment of a new Law Enforcement Officers Suicide Data Collection Program to be administered by the FBI. The program will gather data related to suicides and attempted suicides of current and former officers, as well as the wrongful detainment of U.S. nationals abroad. The purpose of the Act is to help understand and prevent law enforcement suicides. The bill was introduced by Sen. Catherine Cortez Masto (D-NV) on Oct. 30, 2019. It was passed by the House and the Senate in May and was signed into law on June 16.

Uyghur Human Rights Policy Act of 2020 (S 2744) – Sen. Marco Rubio (R-FL) introduced this legislation on May 14 as a means to condemn human rights violations of ethnic Turkic Muslims in Xinjiang. The bill calls for an end to the arbitrary detention, torture and harassment of these communities inside and outside of China. The Act was passed by both the Senate and the House in May and was signed into law by the president on June 17.

Hong Kong Autonomy Act (HR 7440) – Introduced by Rep. Brad Sherman (D-CA) on July 1, this legislation authorizes the president to sanction foreign individuals, entities and financial institutions that materially contribute to China’s failure to preserve Hong Kong’s autonomy in response to a written report to be submitted by the State Department each year. While the bill also gives the president the authority to waive or terminate sanctions, it permits Congress to override such an action by passing a joint resolution of disapproval. The Act was unanimously passed in Congress and signed into law by the president on July 14.

Emergency Aid for Returning Americans Affected by Coronavirus Act (S 4091) – This bill was introduced by Sen. Chuck Grassley (R-IA) to amend section 1113 of the Social Security Act. The Act authorizes funding for fiscal year 2020 in order to increase payments for temporary assistance to U.S. citizens and their dependents who return from foreign countries due to the COVID-19 crisis and are without available resources. The legislation enables the Department of Health and Human Services to provide monetary payments and medical care on a temporary basis. The Act was introduced and passed in both the House and Senate on June 29 and signed into law on July 13.

Protecting Nonprofits from Catastrophic Cash Flow Strain Act of 2020 (S 4209) – This bill is designed to improve emergency unemployment relief for governmental entities and nonprofit organizations by amending Title IX of the Social Security Act. The bill was introduced by Sen. Tim Scott (R-SC) on July 2. It was passed in the House and in the Senate on July 9, and is currently awaiting signature by the president.

Moving Forward Act (HR 2) – On June 11, this Act was introduced by Rep. Peter Defazio (D-OR). This bill would authorize funding for federal highways, highway safety programs and transit programs. It also addresses climate change strategies to reduce weather impacts on surface transportation by conducting a vulnerability assessment and recommending ways to enhance resilience for highways, mass transit and rail. The bill would allocate a grant program to help improve the safety, state of good repair and connectivity of transportation infrastructure in rural communities. It also directs the Department of Transportation to establish a pilot program for a national motor vehicle per-mile user fee to restore and maintain the long-term solvency of the Highway Trust Fund to uphold a state of good repair for the future. The bill passed in the House on July 1 and is currently in the Senate, where it enjoys considerable bipartisan support for infrastructure projects.

How Will the Market Price in Q2 Earnings?

4 min read

Q2 Earnings 2020The New York Fed Staff Nowcast predicts a negative 14.3 percent (-14.3 percent) growth of real GDP for Q2 of 2020 and a positive 13.2 percent growth of real GDP for Q3 of 2020. Clearly, the Fed is expecting a rebound in the second half of 2020.

This forecast, presented in the July 17, 2020: New York Fed Staff Nowcast, attributes better than expected results for industrial production, capacity utilization, and retail sales data categories, resulting in the upward revision.

For June 2020, the forecast for the Industrial Production Index was 2.48, but the actual figure was 5.41. As the Board of Governors of the Federal Reserve System defines it, this index gauges the real output in the U.S. economy’s industrial sector on a month-over-month basis as a percentage change.

For June 2020, its Capacity Utilization measure was 3.54, versus the original forecast of 1.84. Coming from the Board of Governors of the Federal Reserve System, this measures the percentage of resources consumed by businesses to create goods for all domestic production.

Also for June 2020, the U.S. Census Bureau reported a figure of 7.50, compared to the forecast of 2.17, for the month’s retail sales data, on a month-over-month basis as a percentage change. It looks at the sales from more than 12,000 retailers with paid workers, including food.

While there’s no definitive way to determine how each community, state, or region will be affected, the Brookings Institution did an analysis that provided an interesting insight into how and why certain areas may be more impacted economically than others. It looked at sectors more prone to interruption by COVID-19, resulting in less business, more closures and layoffs. It found that areas reliant on energy and in the southern part of the country were more likely to be negatively impacted.

Brookings found that by looking at 2019 employment figures for these industries, there are approximately 24.2 million jobs that are ripe to be disrupted. Looking to Moody’s, Mark Zandi found that the following five industries are most vulnerable: mining/oil and gas, transportation, employment services, travel arrangements, and leisure and hospitality.

Conversely, Brookings found that more mature manufacturing locales, agricultural centers, and already economically challenged areas are less prone to negative impacts. However, it’s noteworthy that because of the proliferation of technology, which has seen an uptick in computer sales and IT/cybersecurity due to increased remote working and learning, the potential for a rebound will be easier.

While the COVID-19 pandemic has the world in its grip, it’s noteworthy to discuss how past pandemics and infectious disease outbreaks have impacted markets. Over the past 40 years of global epidemics, according to FactSet and Charles Schwab, there have been mixed results when it comes to the impact of disease outbreaks on market performance, using the MSCI World Index as a reference.

In June of 1981 during the HIV/AIDS outbreak, the index fell 0.46 percent during the first month; falling 4.64 percent over the three months after the start of the outbreak, and down 3.25 percent six months after the initial outbreak.

As for the 2006 avian flu outbreak, the index dropped 0.18 percent one month after the start; then the index was up 2.77 percent three months after the outbreak; and up 10.05 percent six months after the outbreak. 

Looking at these figures, it shows that more often than not, these types of events are short to medium term pullbacks, presenting investors with buying opportunities.  

According to Zacks & Nasdaq, Q2 earnings’ projections for the S&P 500 is a negative 43.7 percent, with a drop of 11 percent in revenue. While Q2 is expected to be the worse, Q3 and Q4 are expected to experience smaller, but still noticeable drops in earnings due to the coronavirus. The transportation sector is expected to decline by 152.4 percent; autos is expected to decline by 224.2 percent; and energy is projected to drop by 138.4 percent, on a year-over-year basis.

While these were some serious declines for Q2, the one bright spot was technology. The technology sector declined by only 13.2 percent year-over-year, with a drop of 1.2 percent in revenues. However, it’s noteworthy that, much like technology has seen shallow losses along with the medical sector, it’s projected that in 2021 the technology sector will earn 8.8 percent more while the medical sector is expected to grow its earnings by 12.8 percent in 2021.

The coronavirus is unique in that there’s been mass stay-at-home orders and closures. However, based on past disease outbreaks, the economy and markets generally seem to find a way to balance themselves out.

How To Use Qualified Charitable Distributions For Charitable Giving

3 min read

How To Use Qualified Charitable Distributions For Charitable GivingEach year, millions of Americans make donations to charitable organizations and receive something in return – a tax break. However, the 2017 Tax Cuts and Jobs Act curbed this tax advantage because it reduced the number of people eligible to claim a charitable deduction by raising the standard deduction. For 2020, the standard deduction is $12,400 for individuals and $24,800 for married couples filing jointly. If your list of deductions is not greater than those amounts, there is no tax benefit to itemizing – which means you might not be able to claim your charitable donation.

Without the ability to claim a deduction, some retirees just take their normal required minimum distribution (RMD) and bank the money, pay taxes on it and then make charitable gifts or tithe to their church on a monthly basis. For example, say your RMD is $10,000 and you pay 15 percent in taxes on this distribution. If you want to donate the money as a charitable gift, you’ll have only $8,500 left to do so.

However, there is a way to do this that will give you a tax advantage. A Qualified Charitable Distribution from an IRA enables retirees to claim their standard deduction and receive a tax benefit for their gift. The key is to arrange for the distribution to be made directly from your account custodian to the qualified 501(c)(3) charitable organization so that you do not take possession of the assets.

IRA owners may gift up to $100,000 each year, or $200,000 for a couple that files a joint tax return. Note that this option is available only for IRA owners over age 70½; it is not allowed for 401(k)s, 403(b)s, thrift savings plans, or other qualified plans. The QCD will be reported to the IRS and should be claimed by you on Form 1040 as an IRA distribution, but it will not be taxable. Another perk of this strategy is that the QCD can satisfy your annual Required Minimum Distribution (RMD). Be aware that if your QCD does not meet the full distribution amount required, you will have to withdraw and pay taxes on the remaining balance.

Another benefit of using an RMD for a charitable donation instead of receiving it as income is that this could keep you in a lower tax bracket. Consequently, it can help minimize taxes on Social Security benefits and keep your Medicare premiums low.

Thanks to the Coronavirus Aid, Relief and Economic Security (CARES) Act, RMDs are not mandatory in 2020. That’s because the initial market losses triggered by the COVID-19 outbreak were substantial; by not requiring distributions this year, retirement accounts have more time to potentially recover those losses.

Since it isn’t necessary to take an RMD this year, you might want to just make charitable gifts in cash. The CARES Act also enables this option by increasing the adjusted gross income (AGI) limit for individuals who qualify to itemize on their tax return. In 2020, you may deduct up to 100 percent of donations (up from 60 percent) against your AGI. For example, if you earn $500,000 in income, you may donate $500,000 and the entire amount is tax-deductible. This strategy is available to people younger than age 70½ and offers a benefit similar to the QCD.

Even if you don’t qualify to itemize, you may claim up to a $300 charitable gift deduction on your 2020 tax return. As always, it’s best to seek the advice of a tax professional in order to figure out what is best for your situation.

HEROES ACT Can Combat Economic Downtown

3 min read

HEROES ACT, Health and Economic Recovery Omnibus Emergency Solutions Act The HEROES Act, otherwise known as the Health and Economic Recovery Omnibus Emergency Solutions Act, can greatly improve the benefits for the earned income tax credit (EITC) for eligible workers who don’t have children. This legislation would also help wage earners in the business-to-consumer and leisure sectors of the economy impacted severely by the coronavirus pandemic.

Looking at the HEROES Act legislation and how it would help childless wage earners, we need to examine the rules surrounding the EITC and how many additional filers may qualify. While childless students pursuing formal education are still required to be 25 for EITC eligibility, filers as young as 19 (down from 25 years old), as well as filers aged up to 67 (up from 64), are now able to apply for the childless EITC. This legislation would also increase the credit’s ceiling to $1,487, from $538.

Looking at these proposed amendments to the tax code, this would act as a one-time stimulus to the economy when the credit is disbursed to eligible filers, specifically focused on low-income wage earners. Based on a review by the Tax Policy Center, 75 percent of the benefits created by the HEROES Act legislation for the EITC would be directed toward the lowest fifth of U.S. earners. Sectors of the economy that will benefit from this effect include health care, manufacturing, construction, and professional services.

However, there is one consideration that must be taken into account, especially in periods of low economic growth. If eligible wage earners see their earnings fall, then the EITC also will become smaller. There is a possibility that the U.S. House and Senate may work together to modify this legislation to speed up or get rid of the phasing-in process, thereby correcting this flaw.   

Another piece of the HEROES Act changes how people can claim the EITC when they file their 2020 taxes. The legislation will allow filers to claim their EITC according to their 2019 or 2020 income, permitting filers to choose the tax year that gives them a more favorable credit. This takes inspiration from other tax years when victims of natural disasters were able to obtain more favorable tax credits. The HEROES Act will give this choice of tax years to all filers eligible for the EITC, not exclusively for childless workers.

Regardless of the process, this could aid in stabilizing economic conditions now or in the future, regardless of why the economy suffers. This is because this legislation would ensure a falling EITC doesn’t increase a wage earner’s overall losses.

Making this type of change to how the EITC is awarded to childless workers would give greater certainty for more predictable financial help and streamline things for legislators and government officials to distribute monies during the next economic downturn.

No matter what form this legislation ultimately takes, if and when it’s signed into law, there are other pieces of legislation containing similar amendments to the EITC found within the HEROES Act. Elements proposed for improving the EITC for eligible filers are contained within the Working Families Tax Relief Act, the Middle-Class Act, and the Cost-of-Living Refund.

Hiring in the Age of Coronavirus

4 min read

Hiring in the Age of CoronavirusThe U.S. job market gained 2.5 million jobs during the month of May, dropping the unemployment rate to 13.3 percent, according to the U.S. Bureau of Labor Statistics. There’s likely been a lot of rehiring, with more to come as the economy continues reopening. However, until social distancing becomes a thing of the past, hiring effectively will take some pivoting during the pandemic.

Finding Candidates Virtually

Employers looking to interview and hire candidates can take advantage of LinkedIn during the pandemic. Along with providing a branding opportunity, the platform gives businesses a hybrid social media and marketing tool. Leveraging 1st Connections on LinkedIn, participating in discussion groups, demonstrating one’s industry knowledge, or simply looking for prospective candidates are effective uses of LinkedIn.

Much of the LinkedIn user base is comprised of people looking for work, either as an employee or on a contract basis. Businesses can reach and retain an audience by distributing content through LinkedIn. Along with taking advantage of using LinkedIn advertising, sharing new content with existing followers can be direct and unimpeded. The site also provides a connection to a business webpage to start the application process, in addition to listing the job requisites on the business’s LinkedIn profile.   

A good way to engage applicants virtually is by encouraging interested candidates to produce one-way video interviews through digital and social media requests that they can record on their own, detailing experience, education, etc. Then hiring managers can review these submitted videos remotely on their own time and arrange initial (or additional) interviews for select candidates. Other recommendations include refreshing job postings and posting links to jobs via the company’s social media.

Safely Finding and Interviewing Candidates

Because the ongoing pandemic requires certain safety practices, such as social distancing, interviewing candidates in-person might not be practical or safe. Instead, conducting interviews remotely is the next best thing. Speak with candidates over real-time video conferencing, such as Zoom or Skype.

A survey from Gartner found that 48 percent of employees will work at least some portion of the time remotely, post COVID-19. This is compared to 3 in 10 workers who performed some of their work remotely pre-pandemic. Gartner has a few ideas on how Human Resources professionals can on-board employees virtually to increase efficiency and optimize their performance.

Another way to help employees is to recommend different modes of communication. For example, if there are too many email exchanges when working on a project, it might be more effective to hold a brief virtual meeting.

When working remotely, especially for the long-term, employees might not have adequate technology at home. It might sound intuitive, but if the company is dropping off/sending laptops/phones/microphones to remote workers, they must first ensure that all software and apps are downloaded and working. While this may be a one-time use of time for employees, it’s an important point to reduce distractions for workers when they could be spending their time on productive work. As the University of California-Irvine found, it can take 23 minutes for someone to refocus their attention after being distracted. This shows just how destructive distractions are to workers, especially when they are working remotely and in a less structured environment.

Onboarding Recommendations During COVID-19

While the following recommendations are applicable for remote workers, they can be helpful even if there are employees in the office when social distancing is in force.

Leveraging video for new employees is a useful approach. Along with taking advantage of non-verbal language, this will help share information, schedule meetings, and build trust by facilitating the ability to ask questions. Video can be a good introductory meeting, with a follow-up email that provides links to resources, how-to guides, etc. Depending on how people learn, these resources will reinforce their knowledge.

While each organization will have different needs for work arrangements during the COVID-19 pandemic, businesses can use technology to work safely and efficiently during these times to maintain business continuity.

Sources

https://www.forbes.com/sites/vickyvalet/2020/03/12/working-from-home-during-the-coronavirus-pandemic-what-you-need-to-know/#5615d77d1421

https://www.bls.gov/news.release/empsit.nr0.htm

https://www.gartner.com/smarterwithgartner/9-tips-for-managing-remote-employees/

https://business.linkedin.com/marketing-solutions/blog/best-practices–thought-leadership/2016/5-free-ways-to-build-your-personal-brand-on-linkedin

Best Part-Time Jobs During Corona

4 min read

Best Part-Time Jobs During CoronaEven though unemployment is still relatively high, there are still some great part-time jobs you can do that will help cover basic expenses. Here’s a list of the industries that are hiring right now:

Paid Survey Participant

If you like to share your opinions (and who doesn’t), this job is perfect for you. Companies are always looking for consumer opinions on a variety of things such as products, services, etc. Best of all, it’s completely online, so you can work from anywhere. Here’s a list of companies that are looking for your feedback: Swagbucks, PrizeRebel, SurveyJunkie, SurveyPolice, Inbox Dollars, and Toluna. Grab your laptop, kick back, and start earning!

Freelance Writers

If you’re a writer of any kind, this industry is really taking off right now. All you need is impeccable grammar and the ability to put together clear sentences. While having prior experience is always good, some companies might require candidates to have a bachelor’s degree in journalism, creative writing, or a related field like communications. Here are some sites for freelance writers to check out: Fiverr, Upwork, Freelancer, and PeoplePerHour.

E-Commerce

This is easier to pull off than you might think. While you need an initial investment, the cost of opening an online store is low – and it’s perfect for the entrepreneur or artist. Are you a life coach? Can you help college seniors write resumes? Do you make hand-poured candles? Really, anything can become an online business and this sector will only continue to grow as the pandemic prevents in-store purchases. Some sites to help you get started include Big Commerce, Shopify, and LinkedIn Learning.

Web Designers/Developers

If you have design or development experience, then you can make money online with this part-time gig. In addition to design, other skills you need include knowing how to create layouts and how to code. Knowledge of graphic design software and consumer recognition is necessary, as well as understanding the users, aka “personas,” of the audience. If you don’t know how to code, there are online classes you can take at Coursera, Pluralsight, and FreeCodeMap. What better time to pick up a new skill that can help you earn a living?

Delivery Jobs

Since many people are still sheltering in place, supermarket fresh delivery jobs are booming. Two places to inquire are Walmart and Amazon Fresh. All you need is a driver’s license and an ID. Food industry drivers are also in high demand. Check out Postmates, Uber Eats, Grub Hub, and Door Dash. Customers pay for their meals online or over the phone. All you have to do is leave the food on the front porch; the same is true for supermarket fresh deliveries. This way, you won’t have to interact with people face-to-face. Both of these are great interim jobs until you return after a furlough and/or get full-time employment. Plus, getting out and about just might do you a world of good.

Translator

Do you speak a foreign language? If so, this industry is ripe with possibilities. Plus, you can work at home (or anywhere) online and create your own schedule. Here are a few sites to look into: Gengo, Language Line, and Verbalizelt.

With all these industries that have grown in the past few months (and will continue to grow), it seems as if there should be plenty of job opportunities to go around. However, the key to landing a part-time job is persistence. Keep on keeping on. Never give up! There’s something out waiting for you.

Sources

https://www.salary.com/passages/recommended-part-time-jobs-during-coronavirus-outbreak/2/

https://www.creativebloq.com/web-design/online-coding-courses-11513890

How Businesses Can Help Protect Themselves Against Civil Unrest

3 min read

How Businesses Can Help Protect Themselves Against Civil UnrestIf the COVID-19 pandemic isn’t a big enough strain on businesses trying to engage in commerce, whether it’s retailers, restaurants, manufacturers, or those in the service sector, civil unrest puts another strain on surviving the downturn. Based on recommendations from the U.S. Department of Homeland Security and the U.S. Small Business Administration, businesses can prepare for civil unrest.

While the British firm Verisk Maplecroft predicts that 75 countries will see civil unrest in 2020, the United States has already seen its fair share recently. While the future intensity of civil unrest can’t be predicted, businesses can take steps to plan and mitigate such events.

For businesses, the first priority is to ensure employees and customers are not put in harm’s way. If a dangerous situation happens quickly and without warning, there are some steps business owners can take to mitigate the threat.

  • Plan ahead for travel disruptions by keeping an eye on local media reports and online/social media. This information can be helpful for informing employees and customers not to go to work or order online if a retail outlet or office location is subject to civil unrest.
  • Ensure that all workers are familiar with emergency and security plans. This might include having current contact information to reach employees before they go to work or giving them time to leave before the situation escalates.

Another recommendation is to take steps against arson, break-ins, and damage sustained to the property. Examples include maintaining employee vigilance against the out-of-the-ordinary activity. Review security and fire protection systems, how alarm companies will notify business owners, and what steps the monitoring companies will take to mitigate against burglary and/or fire. Reinforce locks and board up areas vulnerable to damage or provide easy points of access during civil riots (e.g., protect glass doors and windows).

If first responders take longer than normal to arrive, it’s important to take measures to reduce the chance of serious and unintended damages from the civil unrest. Be it water, gas, electrical or related systems, turning off all but necessary utilities (e.g., water for sprinklers; enough heat to prevent freezing pipes; power for an alarm system) could reduce the risk of additional damage.

Along with having a commercial insurance policy that includes looting as a covered peril, one other important part of a business continuity plan is how important documents are stored. Will they be stored on-premises in a safe? Will they be stored online, in the cloud and encrypted? Will they be stored offsite in a secure location?

Much like other disasters that often happen with little to no warning, businesses that prepare before civil unrest occurs can help reduce the amount of property damaged and help get their operations back to pre-crisis levels.

Sources

https://www.sba.gov/blog/seven-ways-start-your-business-continuity-plan

https://www.ready.gov/business-emergency-preparedness-social-media-toolkit

https://www.cnbc.com/2020/01/16/40percent-of-countries-will-witness-civil-unrest-in-2020-report-claims.html

Fileless Malware Poses New Threat to Computer Users

4 min read

Fileless Malware Poses New Threat to Computer UsersWith increased cyber threats, there is great awareness of malware that comes attached in files.  Individuals and businesses invest in security solutions to protect against malware. In fact, there are often company policies regarding opening attachments on emails; yet there is an increase in a type of threat (though not new), known as the fileless malware.

What is Fileless Malware?

A fileless malware attack is a type of threat that doesn’t involve executable files. Instead, these attacks include scripts that run on browsers, command prompts, Windows PowerShell, Windows Management Instrumentation, VBScripts, or Linux (Python, PERL).

In other words, fileless malware is a form of cyberattack carried out through software that already exists on your device, in your authorized protocols and in applications that you have allowed on your device.

As such, fileless malware is becoming a favorite of cybercriminals because they don’t have to look for ways to install malicious files in your device – they only need to take advantage of built-in tools.

Reported examples of fileless malware include PowerGhost, which has been used in crypto-mining and DDoS attacks.

How It Works

First, note that these attacks are termed fileless because they are not file-based; instead, they hide in computer memory.

The malware launches an attack in various ways. For instance, a malicious code is injected in an application already installed or a user clicks on a legitimate-looking link that loads a remote script.

Another scenario exists within a legitimate-looking website that a user visits; the attackers exploit vulnerabilities in the Flash plugin; and a malicious code runs in the browser memory of the user’s computer.

While file-based malware uses executable files, the fileless type hides in areas where it can’t easily be detected, such as the memory. It is then written directly to the RAM (and not the disk), where it carries out a series of events.

Once in your system, the malware piggybacks on legitimate scripts and executes malicious activities while the legitimate program runs. At this point, it performs malicious activities such as payload delivery, escalating admin privileges, and reconnaissance, among others.

Since it works in-memory (RAM), its operations end when you reboot your system. This makes it more challenging to trace attacks. The fileless malware also may work in cohorts with other attack vectors, such as ransomware.

Detection and prevention

Various security vendors claim to have products that can detect fileless threats, as well as protect endpoint systems.

Successful security solutions need to be able to put in place technologies that enable them to inspect different kinds of operating systems storage, as well as analyze in real-time the execution of patterns of processes in a system.

But even so, one thing is certain: traditional anti-malware software will not detect fileless malware because they are not file-based and they do not they leave footprints. Here are some tips that will help mitigate against fileless attacks:

  • Regularly update the software on your devices (especially Microsoft applications) to protect against attacks propagated through PowerShell.
  • Apply an integrated approach that addresses the entire full threat lifecycle. This is possible when you use a multilayered defense mechanism.  
  • Use security solutions that can detect malicious attacks against command prompt (CMD), PowerShell, and whitelisted application scripts.
  • Use anti-malware tools that include machine learning, as this will limit scripts from creating new polymorphic malware within your environment.
  • Practice behavior monitoring to help lookout for unusual patterns.
  • Use memory scanning to help detect patterns of known threats.
  • Be on the lookout for high CPU usage by legitimate processes and suspicious error messages that appear for no clear reason.
  • Disable PowerShell and Windows Management Instrumentation (WMI) if you are not utilizing them.
  • Avoid using macros that have no digital signatures or turn off macros if not being used.
  • Use endpoint detection and response tools.

Final Thoughts

The cyber threat landscape keeps evolving. Every day, there are more sophisticated threats as criminals keep advancing to take on countermeasures that have been implemented.

Invest in security solutions that mitigate varying classes of threats, especially machine learning technologies. This will help protect against the latest and emerging threats. Also, keep your Windows OS and other installed software up-to-date to reduce the chances of fileless malware attacks.

Despite taking the mentioned measures, it’s important to stay informed of the latest threats and take necessary precautions.

Helping Small Business Owners, Seniors and U.S. Hostages, and Limiting Intrusive Domestic Surveillance

4 min read

HR 7010, HJ Res 76, HR 6172, S 712, S 149Paycheck Protection Program Flexibility Act of 2020 (HR 7010) – Rep. Dean Phillips (D-MN) introduced this legislation on May 26. This Act modifies provisions related to small business loans issued under the original Paycheck Protection Program. Specifically, the bill permits forgiveness of loans used to pay expenses incurred over a 24-week period, longer than the original eight-week limit, and extends the timeframe to pay off unforgiven loans from two to five years. This bill also increases the limit on non-payroll expenses up to 40 percent when used to pay for rent, utilities, mortgage interest, and similar fixed costs. Loan recipients have until the end of 2020 to rehire employees with full access to payroll tax deferment. The bill was signed into law by the President on June 5.

Providing for Congressional Disapproval Under Chapter 8 of Title 5, United States Code, of the Rule Submitted by the Department of Education Relating to “Borrower Defense Institutional Accountability” (HJ Res 76) – This bill was introduced on Sept. 26, 2019, by Rep. Susie Lee (D-NV). In response to a September 2019 rule issued by the Department of Education (ED), this resolution sought to reverse a process that no longer allows a borrower to be discharged from a student loan if an educational institution misrepresented material facts. The new rule also requires individual borrowers to apply to ED for a defense to repayment, whereas in the past an application could be submitted on behalf of an entire group (e.g. veterans). This resolution passed in both the House and Senate but was vetoed by the President on May 29. No attempt has been made to override the veto.

USA FREEDOM Reauthorization Act of 2020 (HR 6172) – This bill would reauthorize (through November 2023) provisions related to the Foreign Intelligence and Surveillance Act (FISA). Updated provisions mandate that the FBI may not seek detailed phone records on an ongoing basis, cellular or GPS location information, or any evidence in which there is a reasonable expectation of privacy. Other mandates include certifying that the Department of Justice (DOJ) has received any information that might raise doubts about the application, and imposes additional requirements for FISA authorizations that target a U.S. person, federal elected official or candidate. The bill would increase criminal penalties for unlawful violations of FISA electronic surveillance and expands the criteria for when a FISA court decision shall be declassified. The bill was introduced by Rep. Jerrold Nadler (D-NY) on March 10. It was passed in the House in March and in the Senate, with alterations, in May. The bill was recently put on hold during its second pass in the House.

Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act (S 712) – This bill addresses the wrongful detainment of U.S. nationals abroad. It authorizes the President to appoint 1.) a Special Presidential Envoy for Hostage Affairs to engage in U.S. hostage policy recovery efforts; 2.) an interagency Hostage Recovery Fusion Cell to assess and track all cases and coordinate agency efforts to safely recover hostages; 3.) a Hostage Recovery Group to develop, implement and recommend hostage recovery policies. The bill also gives the President the authority to impose visa- and property-blocking sanctions against foreign nationals responsible for or complicit in the unlawful or wrongful detention of a U.S. national abroad. The bill was introduced by Sen. Robert Menendez (D-NJ) on March 7, 2019. It was passed by the Senate on June 15 and is currently with the House.

Stop Senior Scams Act (S 149) – Sponsored by Sen. Robert Casey Jr. (D-PA), this bill establishes a Senior Scams Prevention Advisory Group to develop educational materials to help employees of retailers, financial services companies and wire transfer companies identify and prevent scams that affect seniors. It was introduced on Jan. 16, 2019, and passed in the Senate on June 10. The legislation is currently under consideration in the House.