Improving Federal Hiring Processes, Foreign Election Influence and Natural Disaster Protections

4 min read

Disaster Resiliency Planning Act (S 3510) – Introduced by Sen. Gary Peters (D-MI) on Jan. 13,this Act details guidelines for federal agencies to incorporate natural disaster resilience with regard to real property asset management and investment decisions. The bill passed in the Senate on June 22, in the House on Nov. 14 and is awaiting signature by President Biden.

Disclosing Foreign Influence in Lobbying Act (S 4254) – This Act is designed to combat attempts of foreign adversaries, such as Russia and China, from trying to influence U.S. political elections. Specifically, the bill closes a loophole used to conceal lobbying efforts frequently used by the Chinese Communist Party (CCP).The bill was introduced by Sen. Chuck Grassley (R-IA) on May 18 and passed in the Senate on Sept. 29. It is currently under consideration in the House.

Chance to Compete Act of 2022 (HR 6967) – This legislation was introduced by Rep. Jody Hice (R-GA) on Jan. 25, 2021. The bipartisan bill attempts to improve the federal civil service hiring process by waiving education degree requirements. The focus would shift to an evaluation of skills, aptitude and experience. Furthermore, the bill would enable agencies to share applicant assessments and permit interviewing by subject matter experts. The bill passed in the House on Sept. 29 and is now being reviewed in the Senate.

A bill to allow for alternatives to animal testing for purposes of drug and biological product applications (S 5002) – This bipartisan bill was introduced by Sen. Rand Paul (R-KY) on Sept. 29, 2021, and was passed in the Senate on the same day. The legislation requires that certain alternatives be utilized in animal testing in order to receive an exemption from an investigation of the safety and effectiveness of a drug. Alternatives may include cell-based assays and computer models. The Act also waives the requirement of using animal studies to get a license for a biological product that is interchangeable with another biological product. The bill’s fate currently lies in the House.

Fairness for 9/11 Families Act (HR 8987) – Introduced by Rep. Jerry Nadler (D-NY) on Sept. 26, this bipartisan bill authorizes funding for catch-up payments from the United States Victims of State Sponsored Terrorism Fund. The Act passed in the House on Sept. 30 and is currently being considered in the Senate.

Stop Tip-Overs of Unstable, Risky Dressers on Youth Act (STURDY) Act (S3232) – This legislation directs the Consumer Product Safety Commission to revise the safety standards for freestanding dressers, bureaus and chests of drawers. The new manufacturing standards would require testing related to tip-overs for all products sold in the U.S. market. The bill was introduced by Sen. Robert Casey (D-PA) on Nov.18, 2021. It was passed in the Senate on Sept. 29 and is presently under consideration in the House.

Prevent All Soring Tactics (PAST) Act of 2021 (HR 5441) – Introduced on Sept. 30, 2021, by Rep. Steven Cohen (D-TN), this bill addresses soring horses. Soring is the practice of making adjustments to horses’ limbs in order to produce a higher gait for showing at horse shows, exhibitions, sales and auctions. These alterations can cause pain, distress, inflammation or lameness. Specifically, the bill seeks to expand soring regulation and enforcement by establishing a new system for soring inspections and increasing penalties for violations. The bill passed in the House on Nov. 14 and currently lies with the Senate.

Speak Out Act (S 4524) – Introduced on July 13 by Sen. Kristen Gillibrand (D-NY), this Act would waive enforcement of nondisclosure agreements (NDS) involving sexual assault or harassment disputes. The legislation would allow any survivor to share his or her story regardless of a previously signed NDA. The bill passed in the Senate on Sept. 29 and is in the House for consideration.

The 2022 Tax Guide

4 min read

Now is the time of year to do everything you can to minimize taxes and maximize your financial health with proper year-end planning. In this article, we’ll look at several actions to consider taking before the end of 2022.

Thoughtfully Harvest Losses and Gains Before Year-End

Tax loss harvesting by selling securities at a loss to offset capital gains is a classic year-end planning strategy. Just make sure not to violate the wash sale rules. This means you can’t buy back the same security or a substantially identical one within 30 days of the sale.

Reinvest Capital Gains into Opportunity Zones

Another way to offset capital gains is to reinvest those gains into a qualified opportunity fund (QOF). To be eligible, you must make the investment within 180 days of the sale of the asset-bearing gains. QOF investments allow you to defer the recognition of the capital gains tax on the original investment. The details and exact rules can be tricky, so it’s best to check with your tax advisor before making this type of transaction.

Consider Installment Sales Where Applicable

When a taxpayer sells a private asset such as real estate, a business, or private equity in exchange for a series of payments over multiple years through a promissory note, this can constitute an installment sale. Installment sales are generally taxed, with each payment representing a portion of the proceeds; return of basis, interest, and gain are recognized over the life of the note.

There are situations in which installment sales can be structured so that gains are not recognized until principal payments are recouped. If you are considering selling an asset via an installment sale this year-end or next, consult with your tax advisor to determine if it’s possible to structure the sale to defer gains.

Funding Retirement

If you can contribute to a retirement account, now is the time to see if you need to make additional contributions or top-up to the full amount allowable. As you review your situation, keep in mind the annual maximum contribution limits for 2022.

IRAs – $6,000. If you are 50 or older, it’s $7,000.
401(k)s/403(b)s — $20,500. If you are 50 or older, it’s $27,000

Also, converting assets from a traditional IRA to a Roth IRA may be a smart move if: you believe your tax rate will be higher in the future; you can afford to pay the taxes now with spare cash; and you don’t plan to leave the IRA assets to charity.

Take Your Required Minimum Distributions

The annual deadline to take required minimum distributions (RMD) from your own or inherited retirement accounts is Dec. 31, 2022. It’s important to take RMDs because there is a 50 percent penalty on amounts not distributed. The amount needed to be taken were determined on Dec. 31, 2021, even though the value of the investment has likely fluctuated significantly since that time. RMDs are based on a calculation of age and amount of assets. There are online calculators to help you figure out the amount you need to take.

Giving to Charity

Some taxpayers believe that the deduction for charitable donations is no longer applicable to them since it can be hard to make donations large enough to exceed the standard deduction. One strategy to overcome this challenge is to cluster your donations. Instead of making equal gifts every year, consider making more substantial gifts all in one year instead.

When it comes to making donations around year-end, it’s important to understand the rules on timing and when a gift is effectively deemed given for tax purposes. Here are the basic rules on timing of charitable donations.

To give to charity by check => the date the check is mailed
Gifts of stock certificates => when the transfer occurs, according to the issuer’s records
Gifts of stocks by electronic transfer => when the stock is received, according to the issuer’s records
Gifts by credit card => date the charge is made

Conclusion

As we enter the final part of the year, now is the time to take stock of your financial and tax situation to see if there are any moves you can make to minimize your 2022 tax liabilities and maximize your wealth.

The 2022 Tax Guide

December 1, 2022 · Blog, Tax and Financial News, Uncategorized

4 min read

The 2022 Tax Guide Now is the time of year to do everything you can to minimize taxes and maximize your financial health with proper year-end planning. In this article, we’ll look at several actions to consider taking before the end of 2022.

Thoughtfully Harvest Losses and Gains Before Year-End

Reinvest Capital Gains into Opportunity Zones

Consider Installment Sales Where Applicable

Funding Retirement

IRAs – $6,000. If you are 50 or older, it’s $7,000.
401(k)s/403(b)s — $20,500. If you are 50 or older, it’s $27,000

Take Your Required Minimum Distributions

Giving to Charity

To give to charity by check => the date the check is mailed
Gifts of stock certificates => when the transfer occurs, according to the issuer’s records
Gifts of stocks by electronic transfer => when the stock is received, according to the issuer’s records
Gifts by credit card => date the charge is made

Conclusion

Disclaimer

Tax Planning Guide for Disaster Area Victims

4 min read

The recent hurricane Ian impacted much of the southeast United States. As a result, it is good to know the general tax rules related to disaster victims. Below, we look at several tax topics for disaster area victims.

1. Tax Returns and Filings

Q: I am a disaster area victim and needed to move from my home. I might not be back for a long time or even at all. Which address should I use on my tax return?

A: A taxpayer should always use their current address in filing a tax return. In the situation where you move after filing your return, you need to update your address with the IRS. You can do this either by filing form 8822 or calling the IRS Disaster Hotline at 866-562-5227.

Q: I filed an extension for my form 1040, giving me until Oct. 15 to file. Are there any further extensions available?

A: Taxpayers who already filed for an extension until Oct. 15 and live in a federally declared disaster area of the recent hurricanes receive an automatic extension due date of Dec. 31.

2. Payments

Q: I have a balance due on my 2021 tax return and am currently accruing interest on it. Is there any relief for disaster victims on interest charges?

A: No, the IRS is not giving any forbearance or cancellation of interest on tax balance liabilities. The IRS is, however, willing to waive late payment penalties when the taxpayer can prove the reason they are late is caused by issues related to the disaster.

3. Property and Casualty Loss

Q: During a recent disaster, we lost electricity, and all the food in my refrigerator and freezers spoiled, and I had to throw it away. My homeowners’ insurance reimbursed me, and it was for more than the food cost me. Do I have to report any income on the amount over my food costs?

A: No. The tax code makes a distinction between scheduled property and general reimbursements. For unscheduled property (general reimbursements), the taxpayer does not need to recognize income for reimbursements on personal property, even if it was more than the cost of the lost property.

Q: I need to prove the reasonable value (FMV) of my home. Am I allowed to use property tax assessments to substantiate the FMV of my home?

A: No, the only way a taxpayer can establish the FMV of a property is either with an appraisal by a credentialed appraiser or using the cost of repairs method.

4. Sale of Home

Q: My primary residence was destroyed, and the cause was deemed to be a federally declared disaster. After clearing the lot, I sold the land alone for a gain. Do I have to pay taxes on the gain or is there an exclusion since it is where my primary residence used to be?

A: Selling a vacant lot does not qualify for the exemption on gains from primary residences. The exception to this rule is if the land previously had the taxpayer’s main residence on it. In this case, if the taxpayer would have qualified for the main residence exemption before the disaster, the gain on the sale of the vacant land would be exempt here as well.

5. Expenses

Q: I worked in a federally declared disaster area and had to move for my job at my own expense. Can I deduct my travel and related expenses?

A: The answer depends on whether or not the move is expected to last for more than one year. If you expect the move to be temporary, defined as less than one year, then there is no change in your tax home. In this case, you can deduct travel and related expenses to get you both to and back from your temporary work assignment. If the move is long-term, defined as more than one year, then the expenses are not deductible, regardless of whether your employer reimbursed you.

Auditing: What it is & Why It’s Done

4 min read

The Importance of Auditing

Auditing typically refers to an objective review of a company’s financial statements, which consists of the cash flow statement, the income statement and the balance sheet. It analyzes the level of accuracy that the business has characterized its financial records. The process looks at how a business documents investing, financing and operating ventures.

Depending on the type of audit and what it aims to accomplish, it can be conducted by internal employees or independent, third-party examiners like a Certified Public Accountant (CPA) firm or a government agency such as the Internal Revenue Service. When it comes to the United States, the Generally Accepted Accounting Principles (GAAP) is what auditors look to when analyzing financial statement preparation. External audits are guided by the American Institute of Certified Public Accountants’ (AICPA) Auditing Standards Board (ASB). The AICPA requires that the generally accepted auditing standards (GAAS) are followed by external auditors to ensure proper protocol is followed.

When it comes to regulations, the Sarbanes-Oxley Act of 2002 requires publicly traded companies to have their internal controls’ impacts reviewed. It also states that companies that do not implement and enforce their internal controls may be subject to criminal charges.

Defining Internal Controls

These can be thought of as how businesses can manage operations by regulating permissions, documentation, congruency, protection/safety and partitioning of responsibilities for business processes. These are broken into preventative and detective activities.

Sometimes referred to as protective activities, responsibilities are compartmentalized and distributed among different individuals to dissuade mistakes or deceit from occurring.

It also integrates highly detailed written procedures and validation procedures for further cautionary measures. It’s meant to verify that no sole person is able to approve, document or be responsible for monetary transactions and final products. Permitting invoices and validation of expenses are examples of internal controls. Only permitting appropriate access to the fewest employees necessary and the fewest required business equipment is one way to implement this type of internal control.

Detective Controls Defined

These are redundant systems that are put in place to intercept issues that might have fallen through the initial round of quality control measures. Looking to reconciliation procedures, which matches data in question against known accurate data sets, it’s used to fix discrepancies.

Internal Audits

This type of audit is usually conducted by the business’ employees, primarily performed as a way to evaluate internal operations and internal controls. It looks to identify any deficiencies or weaknesses in the business’ operations, often occurring before an external auditor reviews its financial statements. It’s also meant to review and identify any legal or regulatory compliance issues.

External Audits

This type of audit occurs when an independent auditor, such as a third-party CPA firm, assesses a business’ internal controls and financial statements. It is performed to provide an objective opinion that an audit conducted by the business itself cannot. With a “clean opinion” or “unqualified opinion” provided by the independent auditor, businesses can provide those looking at financial statements confidence that such financial statements are reliable. It enables the outside entity to focus on the financials, the business’ internal controls, etc. by providing a conflict-of-interest-free perspective.

Government Audits

This type of audit is done to ensure that businesses have accurately reported their taxable income to respective government agencies. This can include federal agencies such as the Internal Revenue Service (IRS) and Canada Revenue Agency (CRA), which are the U.S. and Canada’s respective tax collection agencies.

When an IRS audit has concluded its review, there may be a few different preliminary results and resulting paths. The tax return may see no modification. There may be a modification the taxpayer agrees to, which could result in additional money being owed. The third result occurs when the filer doesn’t agree with the change, and it is worked out through an appeal process.

Whether it’s an investor for a publicly traded company or a business looking for creditors for help with money, materials, etc., having audited financial statements provides confidence that they’ll see a return on their investment or a high likelihood of their debts being satisfied in the future.

Sources

https://www.congress.gov/bill/107th-congress/house-bill/3763

Do You Have an Investment Exit Strategy?

4 min read

Are you a trader or an investor? The difference is frequently discerned by how closely you monitor the stock market and how quickly you move in and out of investments. Traders are often referred to as market timers because they actively seek to buy into positions when share prices drop, and sell out when those prices rise.

Many financial planners and professional money managers are not strong proponents of market timing. The reality is that no one can predict market movements accurately over the long term, so success is often a matter of luck and opportunity.

However, market timing is not the same as having a carefully structured and disciplined investment exit strategy. One reason this is important is that it can help prevent investors from panic selling. If you have considered the growth potential and market risks of a particular security or type of investment, and you put parameters in place that reflect your comfort level, then you can control your losses to a great extent. Without this analysis, you may be subject to emotional responses and sell for a significant loss because you can’t take the stress of watching your investment lose money day after day.

Exit Strategy

When share prices drop unexpectedly – and continue to fall – many investors let their emotions get the best of them and sell prematurely. Having a preconceived exit strategy is a good way to prevent this type of panic selling.

An exit strategy basically means that you set a target sell price, but it’s important that you have the discipline to sell at that price. Often when a stock’s share price is rising quickly, it is tempting to “let it ride” and ignore your exit strategy. However, that tide could change quickly in the other direction, turning a profitable trade into a loss. When this happens, you may stubbornly hang on to that declining stock knowing that you missed your opportunity to cash in – and hope that it will come around again.

An effective exit strategy should have two plans in place; a price point to sell for a gain and a price point to sell for a loss. This tactic can help keep your asset allocation strategy on target by not letting gains or losses in any one position throw your target asset allocation percentages out of whack. At the same time, you can manage risk by not allowing your portfolio to lose too much money. There are certain tactics that can help implement your exit strategy. For example:

Stop-Loss – an order to sell a security when its price is declining at the point when it reaches your assigned stop price (sell-stop).
Stop-Limit – a limit order gives instructions to sell a stock at a minimum price point. Stop-limit orders can be set to expire at the end of the current market session or carried over to future trading sessions (GTC – good ‘til canceled).
Trailing Stop – a modified stop order that can be set as either a percentage or dollar amount below or above the market price of a security.

Tax Considerations

An investor’s exit strategy should take into consideration potential taxes on capital gains. The amount you pay depends on how long you hold a position. If held for less than one year, the short-term capital gains tax rate is the same as your regular income tax. If held for one year or longer, the tax rate is 0 percent, 15 percent or 20 percent – depending on income tax bracket and filing status. When determining your exit strategy, it is prudent to set a long-term perspective with a plan to harvest gains on positions more than a year old.

Risk Management

Setting up an exit strategy is one component of a risk management plan. The following are other complementary strategies you can deploy to set boundaries on how much money you are willing lose.

Risk/reward ratio – Set a minimum ratio. For example, 1:3 means you are willing to risk $100 for a potential profit of $300.
1 percent (or 2 percent) rule – Limit your risk to investing no more than 1 percent of your portfolio on any one trade.
By spreading your investments across a variety of assets, you can reduce portfolio losses through diversification.

Remember that investing is replete with uncertainty; not even the most experienced money managers can predict the direction of the markets. Developing an exit strategy for stock holdings is a way to minimize potential losses while strategically targeting specific returns to meet your goals.

How to Write Great Happy Holiday Emails

3 min read

There’s no better time than the holidays to show your employees and your clients how much you appreciate them. Here are five simple steps to help you craft the perfect email in no time.

Decide on the Audience and Purpose

Before you begin, determine who will be your recipients. For instance, if you’re writing to your team, it will be a bit different than writing to your clients. However, no matter who you are addressing, you’ll probably want to start by expressing your gratitude. After that, you can further refine your message. If it’s to your employees, acknowledging their hard work and dedication is a great place to start. After that, you might tout the many wins you’ve all experienced over the year. If you’re writing to your clients, you might want to share how great your partnership has been recently and that you’re hoping for an even better year ahead.

Keep it Brief

When expressing a seasonal message, less is more. Take time to think through exactly what you want to say. A good way to begin is to write what you want to say imperfectly. Get the thoughts out – it’s okay if it’s too long. Then come back and refine and cut. But be sure to give yourself enough time to do so. Few things are as challenging as trying to write a great message in a hurry.

Personalize Your Message

Craft your message as if you were talking to an individual, as opposed to a group. You don’t want it to be stuffy or overly corporate. Think about what you’d like to hear. Put yourself in the recipient’s place. Even if you feel your audience is more on the formal side, the holidays are the right time to be transparent and real. No one wants to receive a message that feels forced or fake.

Proofread Your Text

This is critical. Read every single word; and do it out loud. This works. Why? When you don’t do this, your brains fills in missing words. When you speak the words you wrote, you’ll instantly discover your mistakes. Imagine sending a holiday message that says, “Season’s Gratings!” Of course, you’d never do this, but this is hyperbole to make a point.

Choose a Clear Subject Line

Straightforward, concise and professional is what you want to aim for. A few simple examples are:

Sending You Warm Holiday Wishes
Season’s Greeting From [Company Name]
Wishing You a Wonderful Holiday Season

However, you can always be more creative and weave in something that happened over the year that will resonate with the audience, something that is specific either to your company’s culture or the culture of your client.

At the end of the year, as crazy as things can get with schedules, parties and shopping, it’s always nice to open your inbox and receive a message that warms the heart. These days, with everything that’s going on around us, it can make a world of difference.

Sources

https://www.indeed.com/career-advice/career-development/happy-holidays-email

Quantum Computing Uses That Solve Business Problems

4 min read

Early technology adopters are more likely to gain better business results, including higher revenue growth and market position. With businesses facing complex problems every day, it is no doubt that they are always watching out for the next big tech that offers a better solution.

Although still in its infancy stages, quantum computing is a technology whose commercial use will disrupt the business environment.

What is Quantum Computing?

Quantum computing is a technology that focuses on manipulating and controlling different laws of physics. This non-classical technology uses quantum mechanical concepts like superposition and quantum entanglement.

The idea of quantum computing is not new and has come a long way. The first algorithm of large integer factorization for quantum computing was introduced in 1994. This algorithm intended to reduce the time it would take classical computers to find the prime factors of large numbers. It’s worth noting that the majority of the current infrastructure for encryption and information security is built on prime factorization.

Quantum Technology Monitor, funding from private and public sectors for this new technology is skyrocketing worldwide.

How it Works

Unlike classical computing, whose information is encoded by bits, in quantum computing a qubit is the basic unit of quantum information. Qubit allows all combinations of information to exist simultaneously so that quantum computers can solve problems exponentially faster and with less energy consumption than classical computers.

In 2019, Google, in partnership with NASA, achieved quantum supremacy by demonstrating that quantum computers can compute in seconds what would take advanced supercomputers thousands of years.

Advanced development in this technology has also seen the introduction of quantum-computing cloud infrastructure through Quantum as a Service (QaaS). QaaS provides access to quantum computing platforms over the internet to customers. Major technology companies, such as Amazon, Alibaba, IBM, Google, and Microsoft, have already launched commercial cloud services for quantum computing.

With the continued increase in the quantum computing ecosystem and emerging business use cases, business leaders must stay aware and prepare to adopt the new technology.

Business Use Cases for Quantum Computing

1. Quick Data Analytics

Today more than ever, businesses are faced with big data and a large quantity of information requiring analysis and storage. Since classical computers are built to solve one task at a time, it takes longer to solve these complex problems.

However, quantum technology has the potential to turn complex computations into simple calculations that are solved in less time.

2. Optimize Investment Strategies

Optimization is all about finding the most ideal solution in a situation. When many options are available, it takes a classical computer a long time to find a solution. Therefore, classical computers use shortcuts, and the final solution is partly optimal. But, with quantum computing, there will be better optimization.

3. Better Forecast and Prediction

Businesses rely on forecasts and predictions generated after analyzing complex and large data sets. Quantum computing is built to process huge amounts of data quickly and more accurately. As a result, better forecasts and predictions will enable better decision-making.

4. Solve Problems With Financial Services

There are various computationally intensive jobs in finance that could be facilitated by quantum computing, such as credit-risk management, financial crime reduction, and trading strategy optimization. These tasks will greatly benefit from quantum algorithms that increase the speed of financial calculations.

5. Improve Data Security

Quantum computers are built to break encryptions that ordinary computers cannot. This might become a problem if hackers were to acquire encrypted data and store it until large-scale quantum computers are operational. To handle this problem, postquantum cryptography, a type of cyber security that can be used by conventional computers, is currently being developed. Therefore, a switch to quantum-resistant cryptography will prevent the possibility of data being exposed. At the same time, it will ensure better protection of digital assets.

Final Thoughts

Quantum computers will not replace classical computers; however, the two will form a hybrid solution whereby each task will be assigned to the most suitable machine – either quantum or classical.

Achieving the aforementioned benefits will require businesses to have teams of experts who are knowledgeable about the implications of quantum computing and who can recognize the company’s potential future needs, opportunities, and vulnerabilities.

With signs of commercial quantum computing becoming a reality, it’s not too early for business leaders to consider how it will encourage digital investment, reshape industries and ignite innovation. Therefore, having a thorough understanding of quantum applications is essential for positioning a business to gain a competitive edge.

Quantum Computing Uses That Solve Business Problems

November 1, 2022 · Blog, Uncategorized, What’s New in Technology

4 min read

Quantum Computing for business Early technology adopters are more likely to gain better business results, including higher revenue growth and market position. With businesses facing complex problems every day, it is no doubt that they are always watching out for the next big tech that offers a better solution.

Although still in its infancy stages, quantum computing is a technology whose commercial use will disrupt the business environment.

What is Quantum Computing?

Since the first algorithm was developed, more technological advances have been reported, and the field is continuously receiving funding. According to the McKinsey & Company Quantum Technology Monitor, funding from private and public sectors for this new technology is skyrocketing worldwide.

How it Works

In 2019, Google, in partnership with NASA, achieved quantum supremacy by demonstrating that quantum computers can compute in seconds what would take advanced supercomputers thousands of years.

With the continued increase in the quantum computing ecosystem and emerging business use cases, business leaders must stay aware and prepare to adopt the new technology.

Business Use Cases for Quantum Computing

1. Quick Data Analytics

However, quantum technology has the potential to turn complex computations into simple calculations that are solved in less time.

2. Optimize Investment Strategies

3. Better Forecast and Prediction

4. Solve Problems With Financial Services

5. Improve Data Security

Final Thoughts

Quantum computers will not replace classical computers; however, the two will form a hybrid solution whereby each task will be assigned to the most suitable machine – either quantum or classical.

Disclaimer

Saving Animals, Enhancing Government Efficiency, and Supporting Global Food Security

4 min read

Planning for Animal Wellness Act /PAW Act (S 4205) – Introduced by Sen. Gary Peters (D-MI) on May 12, this act instructs the Federal Emergency Management Agency (FEMA) to compile best practices and federal guidance for handling household pets, service and assistance animals and captive animals during emergencies and disasters. Initiatives include preparedness (e.g., sheltering and evacuation planning), response and recovery.The bill passed in the Senate on Aug. 6, in the House on Sept. 14 and was signed into law on Oct. 17 by President Biden.

Bulb Replacement Improving Government with High-Efficiency Technology Act/BRIGHT Act (S 442) – Presently, public buildings managed by the General Services Administration (GSA) must be equipped with energy-efficient lightbulbs and fixtures. This new bill expands requirements to ensure buildings are equipped with the most cost-effective and energy-efficient lighting systems available. Procurement must take into consideration factors such as motion sensors, fixture distribution and other elements. The act was introduced by Sen. Gary Peters (D-MI) on Feb. 25, 2021. It passed in the Senate on March 30, the House on Sept. 14 and was enacted into law on Sept. 17.

FTC Collaboration Act of 2021 (HR 1766) – Introduced by Rep. Tom O’Halleran (D-AZ) on March 10, 2021, this bill authorizes the Federal Trade Commission (FTC) to work with state attorneys general to evaluate procedures, such as accountability mechanisms, to better facilitate efforts to prevent and detect fraud and scams. FTC proposals must provide the opportunity for public comment, then submit legislative recommendations based on the results of the study. This bill passed in the House on April 14, 2021, and in the Senate on Sept. 29, 2022. It was signed into law on Oct. 10.

Expedited Delivery of Airport Infrastructure Act of 2021 (HR 468) – This legislation was introduced by Rep. Sam Graves (R-MO) on Jan. 25, 2021, to amend Title 49 of the United States Code. New provisions allow for incentive payments to expedite certain federally financed airport development projects, subject to an allowable project cost standard. The bill passed in the House on June 15, 2021, the Senate on Sept. 27, 2022, and was signed into law on Oct. 10.

Supporting Families of the Fallen Act (S2794) – This legislation impacts service members (or former members) covered by the Servicemembers’ Group Life Insurance program and the Veterans’ Group Life Insurance program. Specifically, it increases the maximum life insurance coverage amount from $400,000 to $500,000. The bill was introduced by Sen. Tommy Tuberville (R-AL) on Sept. 22, 2021. It was passed in the Senate on March 23, 2022, and in the House on Sept. 29. It was signed into law by the president on Sept. 17.

Global Malnutrition Prevention and Treatment Act of 2021 (HR 4693) – Introduced on July 26, 2021, by Rep. Michael McCaul (R-TX), this bipartisan bill directs the U.S. Agency for International Development (USAID) to develop initiatives designed to prevent and treat malnutrition globally. The USAID is charged with choosing recipient countries based on specified malnutrition-related indicators. These initiatives andcountry selections must be made within five years, and the provisions are scheduled to terminate seven years after the bill’s enactment. The bill passed in the House with a 90 percent vote on April 27, 2022, in the Senate on Sept. 20, 2022, and was signed into law on Oct. 19.

Global Food Security Reauthorization Act of 2022 (HR 8446) – This act reauthorizes funding to support the government Global Food Security Strategy and the Emergency Food Strategy programs through fiscal year 2028. The first program is designed to promote nutrition and food security, with a newly enhanced focus on improving efficiency and reliability in agriculture production. The latter program provides market-based assistance throughout the world. The bill was introduced by Rep. Betty McCollum (D-MN) on July 20. With 78 percent of the vote, it was passed in the House on Sept. 29 and is currently under consideration in the Senate.

How to Increase After-Tax Returns on Investments

4 min read

It is all about how much you keep after taxes – not what you earn from your job, a business, or investments. While it is always great to see fabulous investment gains, the only financial metric that really matters is what is in your bank account at the end of the day. One of the ways you can influence this is by minimizing the taxes you pay on your investments.

Unfortunately, many people do not think about how taxes impact their investment returns until near the end of the year; however, you should act all year round. Taking part in investment tax planning throughout the year will give you opportunities to keep more of what you earn. Here are some rules and strategies to keep in mind.

Know When to Take Your Losses

Psychologically, many investors are averse to taking losses, holding out to “make their money back.” Instead of emotion, logic and investment acumen needs to be applied here. If an investment does not have a fundamental reason to turn around, then you are better off selling it and taking a tax loss.

Losses reduce taxes on either your capital gains for the year or, when losses exceed gains, up to $3,000 on other income. Excess losses can be carried forward to future years. Plus, you will have the proceeds to reinvest in something more likely to produce a return.

Let Winners Run

Unlike long-term capital gains, short-term capital gains are taxed as ordinary income. This means your marginal income tax rate (the highest rate applied to you) can impact your investment gains.

While you should not let the tax tail wag the investment dog, ideally you want to hold a winning investment for at least a year and a day to benefit from long-term capital gains tax treatment. This means you will pay only a 20 percent maximum tax versus whatever your marginal rate is.

As with losses, the fundamentals of the investment are key. Therefore you should not sell a holding if you think the gains are at risk just to save on taxes. If you believe in the investment for the long term, then holding out for preferred capital gains treatment can be a clever idea.

Give the Gift of Appreciation

Making charitable donations you would not otherwise give is generally not a viable tax strategy. However, if you are already charitably inclined then consider donating stock or mutual funds instead of cash.

When you donate property such as stocks, your charitable deduction is based on the fair market value of the asset on the date of the gift. It is much better to do this than donate cash.

For example, if you have a stock you purchased for $35 and it is now worth $135, when you donate it you will receive a charitable deduction of $135. If you were to sell the stock first, you would have to pay tax on the $100 gains and then have only $103 to donate in cash – assuming you are in the 32 percent tax bracket. The only winner in this situation is the IRS; both you and the charity lose. This is because the charity is excluded from paying capital gains taxes on the appreciation that occurred while you owned the asset.

Hold Until You Die

This strategy does not benefit you directly, but rather your heirs. When someone inherits an asset such as real estate, stocks, bonds, mutual funds, etc., the cost basis of the asset is reset to the fair market value at the date of death.

This means that if you have stock in company XYZ that you bought for $50 and now it is worth $500, you would pay tax on the gain of $450 per share. However, your heir would pay $0 if he sold it on the day you died. If your heir continues to hold the stock, the benefit still applies as his cost basis in the stock of XYZ would reset to $500, so he will pay taxes only on gains over that amount.

Conclusion

While you should never cheat on your taxes or do anything unethical, it is foolish to pay any more than legally necessary to the IRS. Engage in investment tax planning year-round and you may see better after-tax returns and more money in your bank account.

Financial Accounting Overview

5 min read

Financial accounting is how accounting professionals document, compile and outline how a business performs financially over a discrete period of time. Unlike cost accounting, which is used primarily for internal short and long-term strategic planning, financial accounting focuses primarily on producing relevant documentation for outside parties interested in short- and long-term financial performance.

Small businesses, large corporations and nonprofits use the following financial statements produced for relevant parties: the Balance Sheet, the Cash Flow Statement and the Income Statement. When it comes to publicly traded companies, their financial accounting standards are overseen by generally accepted accounting principles (GAAP). It’s one way to provide a standardized means to communicate the business’s monetary details to potential and current shareholders, lenders, government oversight and tax enforcement agencies.

Balance Sheet

As the U.S. Securities and Exchange Commission (SEC) explains, the balance sheet is a financial statement that informs readers about a business’s assets, financial obligations and shareholders’ equity. It’s how a business documents its asset valuation, its financial obligations and cash holdings. It provides owners, lending institutions and investors a way to analyze a business. The current ratio shows the ratio of current assets to current liabilities. This is a way to evaluate a business’ ability to manage financial obligations over the next year. Shareholders’ equity represents how much cash would remain if the business satisfied all creditors and all assets were liquidated; whatever remains would be the property of the shareholders.

Income Statement

Released once a month, every quarter or once per year, an income statement reports revenue, expenses, and net earnings or losses of a company for a given period. A company’s net revenue is calculated by subtracting allowances for uncollectable accounts, discounts, etc. from a business’s gross sales or revenues. From there, subtract the cost of sales, or how much the lot of products or services cost to make for the accounting period, from the net revenues figure. This results in gross profit or gross margin. Depreciation, along with amortization, or the cost of machinery and equipment losing life over time, is subtracted from the gross profit figure.

From there, operating expenses, which aren’t directly attributable to product or service production but are running day-to-day operations, are deducted from the resulting gross profit figure. This number is now called income from operations or operating profit before interest and income expense. Depending on the number, the interest income or interest expense is either added or subtracted from operating profits to arrive at the operating profit before income tax. Finally, income tax is deducted, resulting in net profit (net income or net earnings) or net losses. For publicly traded companies, it gives investors insight as to how much the company is making per share, so-called “earnings per share” (EPS).

Statement of Cash Flow

Per the SEC, a statement of cash flow features three sections that detail sources and utilization of the business’ operating, financing and investing cash flows. It paints a picture of inflows and outflows of the business’s cash levels. At the end of the day, it helps anyone interested in the company’s financials, especially potential and current investors, see the latest status and trends of cash flow.

One way to calculate cash flow, according to the SEC, is to look at a company’s free cash flow (FCF). This is calculated as follows:

Free Cash Flow = Operating Cash Flow – Capital Expenditures

Free Cash Flow = $50 million – $20 million = $30 million

This information is helpful because free cash flow can help determine a company’s financial health, how well (or not) the business model is performing, and its overall likelihood of success moving forward. Additionally, understanding the difference in accounting methods is another helpful piece of financial accounting analysis.

Accrual Method vs. Cash Method

Accrual Method

When it comes to the accrual method, according to the Congressional Research Service, when a business is paid for services or products to be rendered in the future, the payment is permitted to be recognized as revenue only when the product or service has been rendered. When it comes to accounting for expenses that are presumably deductible, under the accrual method, the expense can be recorded when it’s experienced by the business, not when payment has been made to the utility, raw material supplier, etc.

Cash Method

If a consultant gets payment immediately but isn’t expected to do said job until the following month, this approach requires revenue to be recognized when the cash has been received. Similarly, when expenses are paid is when expenses are recorded.

Considerations

For any business that handles inventory or sells to customers on credit, accrual accounting is required by the Internal Revenue Service. Similarly, for companies with average gross receipts of revenues greater than $25 million for the past 36 months, the IRS mandates accrual accounting. For companies with average gross receipt of revenues of less than $25 million, depending on the exact circumstances of the company’s business nature, cash or accrual may be used.

Financial accounting provides investors, business owners, and those providing businesses with legal and accountability a way to monitor performance and compliance.

Sources

IRS, IRS, IRS, FAS, SEC, SEC

Financial Accounting Overview

October 1, 2022 · Blog, General Business News, Uncategorized

5 min read

What are financial statements Financial accounting is how accounting professionals document, compile and outline how a business performs financially over a discrete period of time. Unlike cost accounting, which is used primarily for internal short and long-term strategic planning, financial accounting focuses primarily on producing relevant documentation for outside parties interested in short- and long-term financial performance.

Balance Sheet

Income Statement

Statement of Cash Flow

One way to calculate cash flow, according to the SEC, is to look at a company’s free cash flow (FCF). This is calculated as follows:

Free Cash Flow = Operating Cash Flow – Capital Expenditures

Free Cash Flow = $50 million – $20 million = $30 million

Accrual Method vs. Cash Method

Accrual Method

Cash Method

Considerations

Financial accounting provides investors, business owners, and those providing businesses with legal and accountability a way to monitor performance and compliance.

Sources

IRS, IRS, IRS, FAS, SEC, SEC

Disclaimer

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Financial Accounting Overview

Category: Blog

Improving Federal Hiring Processes, Foreign Election Influence and Natural Disaster Protections

The 2022 Tax Guide

Tax Planning Guide for Disaster Area Victims

Auditing: What it is & Why It’s Done

Do You Have an Investment Exit Strategy?

How to Write Great Happy Holiday Emails

Quantum Computing Uses That Solve Business Problems

Saving Animals, Enhancing Government Efficiency, and Supporting Global Food Security

How to Increase After-Tax Returns on Investments

Financial Accounting Overview

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