Cybersecurity Awareness Month: Timely Tips to Protect You and Your Business

By Office Staff|2026-10-08T15:31:32-07:00September 26, 2026|Categories: Fraud Prevention|Tags: Cybersecurity, Cybersecurity Awareness Month, Password Management|0 Comments

Think about all the sensitive information that passes through your computer or phone every single day. You might check your bank account, open an investment statement, send a tax document, approve a payment, access payroll information, make a purchase, or receive an email from someone who appears to be a customer or vendor.

Each interaction creates another reason to pay attention to cybersecurity.

October is Cybersecurity Awareness Month, an annual campaign led by the Cybersecurity and Infrastructure Security Agency (CISA). For 2026, the theme is “Securing the Next 250,” recognizing the nation’s 250th anniversary and encouraging individuals and organizations to take practical steps that support a safer digital future.

For individuals, cybersecurity often starts with protecting the accounts and devices that contain personal and financial information. Businesses face those same concerns while also managing employee access, customer and vendor information, business systems, and the ability to continue operating after a disruption. Cybersecurity Awareness Month provides a good reason to review both.

For Individuals: Make Your Accounts Harder to Compromise

Many cybersecurity precautions begin with something familiar: the accounts you use every day. Your email account deserves particular attention because it often connects to other services. Password-reset messages, financial notifications, tax correspondence, and account verification requests may all arrive there. Someone who gains access to your email may be able to use that access in attempts to compromise other accounts.

Start by reviewing the accounts that contain sensitive information or provide access to it. These may include email, banking, investment, accounting, tax, shopping, and social media accounts.

Use Unique Passwords and a Password Manager

Reusing the same password across several accounts creates unnecessary exposure. If someone obtains that password from one compromised account, they can try the same credentials elsewhere. Even worse? They can sell your information to the highest bidder through the dark web.

CISA and the National Institute of Standards and Technology (NIST) recommend password management tools such as Continue reading… Continue reading… Continue reading…

Two Tax Developments Worth Knowing: Crypto Staking Rewards and a New Credit for Beauty Businesses

By Office Staff|2026-10-08T15:35:35-07:00September 18, 2026|Categories: Cryptocurrency, Legislation|Tags: FICA, Paschall v. Commissioner, Staking Rewards, Tips|0 Comments

Tax developments don’t always arrive neatly packaged around a single industry or type of taxpayer. Two recent changes speak exactly to that point. A new U.S. Tax Court decision addresses when cryptocurrency staking rewards become taxable, while an expansion of an existing tax credit could reduce income taxes for eligible salon, spa, barbershop, and other beauty industry employers.

Here’s what affected taxpayers need to know, starting with cryptocurrency staking rewards.

Receiving Crypto Staking Rewards? The Tax Timing Just Got Clearer

Some cryptocurrency owners can commit their tokens to help support the process a blockchain uses to validate transactions. In return for participating, they may receive additional cryptocurrency tokens as rewards. This process is known as “staking.”

If you receive those staking rewards, an important tax question follows: When do the new tokens become taxable? Is it when they arrive in your account, or when you eventually sell them for cash?

A June 2026 U.S. Tax Court decision provides an answer under the circumstances presented in the case. In Paschall v. Commissioner (PDF file), the Tax Court held that a cash-method taxpayer had to include cryptocurrency staking rewards in gross income when the taxpayer received the rewards and gained “dominion and control” over them.

For taxpayers who participate in cryptocurrency staking, that distinction has a practical consequence. Receiving cryptocurrency can create taxable income, even when you haven’t sold the tokens for dollars.

What Happened in the Paschall Case?

In Paschall v. Commissioner, Alvie and Patricia Paschall held a cryptocurrency named Cardano through an account that Mr. Paschall controlled with an electronic trading platform named eToro. The platform automatically enrolled its customers who held Cardano in its staking service, although they could opt out. The Paschalls stayed enrolled throughout 2021.

Each month, eToro added new Cardano tokens to Mr. Paschall’s account as staking rewards. Once those tokens reached the account, the Paschalls could keep them, transfer them elsewhere, or sell them for cash.

The IRS said the Paschalls should have reported $33,354 in staking rewards as income for 2021. They disagreed, leaving the Tax Court to decide when the rewards became taxable: when the tokens were received or when they were eventually sold.

Why “Dominion and Control” Matters

For cash-method taxpayers, income is typically reported in the earliest year in which it is actually or constructively received. With cryptocurrency, the ability to control the asset plays an important role in determining when that occurs.

The Tax Court in Paschall v. Commissioner found that the Paschalls had dominion and control over the Cardano staking rewards when they were received (i.e., they could access the tokens and sell them for cash without restriction). The rewards also increased both the Paschalls’ proportionate interest in the cryptocurrency and the value of that interest.

The Paschalls argued that tokens created through staking amounted to Continue reading… Continue reading… Continue reading…

Qualified Small Business Stock: A Tax-Saving Opportunity for Business Owners and Investors

By Office Staff|2026-09-11T12:57:05-07:00September 11, 2026|Categories: Business Advice, Business Taxes|Tags: Investing in a Business, Qualified Small Business Stock, Selling a Business|0 Comments

Suppose you started a company with relatively little capital, built it over several years, benefit from a stellar reputation both on- and off-line, and now have a buyer interested in buying the business.

Now, if the value of your shares in the business has grown substantially, a sale could produce a sizable taxable gain. But your federal tax bill could look very different if those shares qualify as qualified small business stock (QSBS).

Section 1202 of the Internal Revenue Code allows eligible shareholders to exclude some or all of the gain from the sale of qualifying stock from federal taxable income, subject to specific requirements and limitations. And recent changes expanded those benefits for stock acquired after July 4, 2025, including potential exclusions after shorter holding periods.

For someone forming or investing in a growing company, those rules can influence decisions being made long before anyone talks about selling or acquiring the business. The choice of business entity, the timing of a stock issuance, changes in ownership, and even the company’s growth, can affect whether a future sale qualifies for favorable QSBS treatment.

In this SWC blog post, we cover what you need to know to take advantage of the benefits offered by the Internal Revenue Code (IRC), starting with how an ownership stake qualifies as qualified small business stock.

How Does Stock Qualify as QSBS?

Qualified small business stock (QSBS) treatment starts with the company that issues the shares. Generally, the company must operate as a domestic C corporation, and the shareholder must acquire the stock at original issuance in exchange for money, certain property, or services. The person claiming the exclusion must also qualify as a noncorporate taxpayer.

Timing Matters: The size of the company at the time it issues the stock plays an important role. For stock issued on or before July 4, 2025, the corporation generally must have aggregate gross assets of $50 million or less before and immediately after the stock issuance. For stock issued after July 4, 2025, the limit rises to $75 million.

The higher threshold could matter to a growing company considering whether and when to issue shares. A business that falls below the limit today could grow beyond it later, potentially changing the QSBS analysis for future stock issuances.

The corporation’s activities also have to qualify. During substantially all of the shareholder’s holding period, at least 80 percent of the corporation’s assets, measured by value, generally must support the active conduct of one or more qualified trades or businesses.

Section 1202 of the IRC excludes certain types of businesses. Among them are: Continue reading… Continue reading… Continue reading…

IRS Dirty Dozen for 2026: 12 Tax Scams to Watch Out For

By Office Staff|2026-09-02T11:46:04-07:00September 2, 2026|Categories: Fraud Prevention|Tags: AI Scams, Dirty Dozen, IRS, Self-Employment Tax Credit|0 Comments

Scammers and bad faith actors are always looking for ways to separate you from your hard earned money, personal information, real property, and identity. And when one scam stops working, they rarely pack up and find a new line of work.

That’s one reason that the Internal Revenue Service (IRS) publishes its annual Dirty Dozen, a list of tax scams and schemes that taxpayers, businesses, nonprofits, and even tax professionals like the team here at SWC, should watch out for. The 2026 list covers familiar threats and reflects how fraud is changing, with AI-enabled scams and other increasingly sophisticated attempts to steal from you.

The IRS issued its initial Dirty Dozen alert in January of 2002 and now, as part of a partnership with state tax agencies and the tax industry, continues to warn business and individual tax filers about the ever-evolving nature of tax scams and schemes. Although such deceptions often receive more attention in the spring when we’re fully engaged in tax filing season, we encourage our clients to remain cautious throughout the year.

In this post, we bring you up to speed on the 12 scams and schemes on the IRS Dirty Dozen list for 2026, explain the warning signs, and offer practical guidance for protecting yourself and your business. We’ll start with the fraudsters who impersonate the IRS using Artificial Intelligence.

1. AI-Enabled IRS Impersonation by Phone

Artificial intelligence is giving an old scam some new tricks. Fraudsters can now use computer-generated tactics, voice mimicry, and spoofed caller ID to make a phone call sound and appear more convincing. A call may look as though it’s coming from a legitimate source and may use urgency or threats to pressure you into responding.

The IRS points out several important warning signs:

It generally contacts taxpayers by mail first.
It doesn’t leave urgent phone messages.
It doesn’t leave threatening prerecorded messages.
It doesn’t call to demand immediate payment or threaten taxpayers with arrest.

Caller ID isn’t proof of identity, as today’s technology can make a fraudulent call appear to come from a legitimate source.

What to do: If you receive a suspicious IRS-related call, hang up rather than providing information or making a payment.

Related: We here at SWC — as well as officials at the IRS — caution taxpayers against relying on AI-generated responses for complicated tax questions. Any tax information or calculations produced by AI should be verified by a CPA.

2. IRS Impersonation by Email and Text

Phishing emails have been around for years, but scammers continue to find new ways to make them convincing. They may send an email, text, or direct message (DM) through a social media platform that appears to come from the IRS and use alarming language to convince you to act quickly.

Some messages contain links or QR codes that send you to fake IRS websites, where you’re asked to Continue reading… Continue reading… Continue reading…