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15 posts from July 2012

Estates and Trusts with 3.8% Medicare Surtax

The Supreme Court’s decision upholding the Affordable Care Act confirmed that trusts and estates will be subject to a new 3.8% Medicare surtax when net investment income exceeds a threshold amount. This year presents an unprecedented opportunity for you to differentiate your firm and services and show that you provide significant value to your clients by having all of their financial planning needs in mind, including retirement, estate, tax, investment and insurance planning. With so many unknowns in 2013 compounded by an election year, your clients need to take advantage of many financial planning avenues now to avoid missing crucial opportunities to protect their nest egg and increase their net worth. Listen to a recent podcast below from Bob Keebler, CPA, in which he points out issues surrounding this new surtax and how to plan for trusts and estates. Access other resources to help you educate your clients and proactively plan now in preparation for 2013.

Estates and Trusts with the 3.8% Medicare Surtax

Robert S. Keebler, CPA, MST, DEP, Partner, Keebler & Associates, LLP. Bob is a 2007 recipient of the prestigious Distinguished Estate Planners award from the National Association of Estate Planning counsels. From 2003 to 2006, Bob was named by CPA Magazine as one of the top 100 most influential practitioners in the United States. He is the past Editor-in-Chief of CCH's magazine, Journal of Retirement Planning and a member of CCH's Financial and Estate Planning Advisory Board. His practice includes family wealth transfer and preservation planning, charitable giving, retirement distribution planning, and estate administration.  

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5 Steps to Writing Effectively

Writing effectivelyYou’ve got a big problem. You provide lots of documents to your clients and customers, but the information in the documents is very complex, and hard to understand. You know that most of your clients and customers don’t read the documents.

This could cause some big headaches down the road. Your clients and customers might claim not to have received critical information, if that information was buried in a big, ugly, confusing document somewhere.

Now there is a more immediate issue. In the wake of the financial scandals of recent years, the government is pressuring all financial companies to write their documents in plain English. The documents need to be clear enough for everyone to understand them.

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343,020 Reasons CPAs Should Talk Up Their Tax Expertise Now

Competition aheadNearly three years ago, the IRS launched the tax return preparer oversight program and seeds were planted in the landscape of tax return preparation services.  Today, those seeds are starting to sprout. 

In June, the IRS estimated there are 717,161 PTIN holders, many of which (212,975, or 29.7%) are CPAs, outnumbering Enrolled Agents (42,895) and attorneys (31,189) combined.  While CPAs have dominated the regulated tax preparation arena, that landscape is about to change. More and more people are completing the final step to becoming a Registered Tax Return Preparer, or RTRP (they have until 12/31/13 to pass the competency exam).  Currently, there are 4,893 RTRPs.  That leaves an estimated 338,127 “provisional preparers” who may join the RTRP ranks. 

That means more competition is coming and it will influence the public perception of tax return preparers.  Unfortunately, the public doesn’t really understand the difference between a CPA and other tax return preparers.  We have all seen the advertisements by the big box tax preparation and software chains that inflate the qualifications of their employees.  They often compare them to CPAs or perhaps they feature a CPA in the ad, implying that every customer representative will have similar qualifications.

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Outlook for the Global Economy Declines in Latest CGMA Forecast

CGMA accounting management businessOn July 10, the AICPA and CIMA released the results of the most recent CGMA Global Economic Forecast, which showed the world’s CEOs, CFOs and senior management accountants hold an increasingly pessimistic outlook for the global economy over the next 12 months. The shift to a more negative sentiment appears to reflect the worsening of the sovereign and financial crisis in Europe and its effects on other regions, as well as slower growth in China and political and fiscal uncertainty in the U.S.

The CGMA Global Economic Index – a comprehensive gauge of executive sentiment within the Forecast – declined 7 points to 58 from the first quarter 2012 reading of 65. The Index is a composite of 10 equally weighted survey measures on a scale from 0 to 100, with 50 considered neutral and numbers above that signifying positive sentiment.

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In the News: Accounting Firms Regain 87% of Jobs Lost During the Recession

This week’s ‘In the News’ post comes from the AICPA and CPA/SEA Interchange conference in St. Louis. I’ve been learning a lot at the sessions and having a good time networking with my colleagues at the state societies and sharing ideas and information. There has been a lot going on in the profession recently and I’ve been trying my best to stay on top of it all. I’ve highlighted a few of the more interesting articles I’ve seen in the past week and shared them with you below. If you see something that you think was particularly important, send me an email or let me know in the comments section.

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CPAs Make Sure to Provide Financial Information that Makes a Difference

Financial_reportingIn these days of continuous information, it’s essential to give people and organizations precisely the details they need to make important decisions. What never fails to cut through the clutter is information that is relevant, understandable and useful (not to mention correct). As CPAs, we often are a conduit for complex technical information, providing analysis and guidance in the process. We currently are working on two critical initiatives that bring this hallmark of our profession to life.  

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Going on Vacation? Your Social Media Activity Doesn’t Have To

The word like on the beachKeep your social media channels afloat; schedule content while you are away from the office.

You’ve set your out-of-office message, changed your voicemail greeting and, in your mind, you may already be on the beach listening to waves crash against the sand. Back to reality…there’s one more thing to take care of before you go!

Continuing your activity will help you stay engaged with those fans and followers while you are away.

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National MAP Survey Provides Insight to CPA Firms

National MAP SurveyIt’s valuable to have a perspective on the current state of firms, no matter your role in the CPA profession. Knowing the existing best practices in areas such as staffing, training and technology is important. The 2012 PCPS/TSCPA National MAP Survey, which is being fielded now through July 20, provides you the opportunity to expand your knowledge base on these hot topics. This comprehensive look at CPA firms’ key strategic data is the largest firm practice management survey project of its kind. Contribute your answers to the survey and you’ll have access to the results when complete.

A unique benchmarking tool, the PCPS/TSCPA National MAP Survey reveals key performance indicators broken down by firm size and region so that it’s possible to make meaningful comparisons among firms. It also assesses how firms are doing and spots emerging trends.

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“Big Data” Presents Big Opportunities for Firms and CFOs

Big data 1950s computerIt is difficult to ignore the tremendous growth in information technology that has been occurring over the last few years and how it is transforming business. Technology is enabling data to be captured at a volume and prevalence never imagined. Among social media sites, websites, smartphones, customer profiles and purchase information, it seems that just about every part of our business or personal lives provides information about ourselves that someone is collecting. But where does it all go? What happens to it? How can you turn this data into something meaningful, and more importantly, profitable?  

Information like this is called “Big Data” and Big Data has been a high-profile topic in business media and even the mainstream press. It refers to data sets that grow so large that they are nearly impossible to work with using traditional database management tools, but yet offer a powerful tool when married with strategic use. Big Data has been called “The next frontier for innovation, competition and productivity.”

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Planning Strategies in Wake of the New 3.8% Medicare Surtax

The Supreme Court’s decision upholding the Affordable Care Act confirmed that taxpayers whose income exceeds a threshold amount will be subject to a 3.8% Medicare surtax on net investment income, effectively raising their marginal income tax rate. However, whether the Bush era tax cuts will be extended and, if so, for whom, remains an open question. In light of this uncertainty, CPAs may want to start planning for possible 2013 tax increases now, particularly for clients who will benefit from transferring assets to family members, decisions that can take time to make. Download a free Medicare surtax chart from Robert Keebler, CPA, and listen to his recent podcast on how to plan for the Medicare surtax below.

Understanding the 3.8% Medicare surtax under the healthcare law

Robert S. Keebler, CPA, MST, DEP, Partner, Keebler & Associates, LLP. Bob is a 2007 recipient of the prestigious Distinguished Estate Planners award from the National Association of Estate Planning counsels. From 2003 to 2006, Bob was named by CPA Magazine as one of the top 100 most influential practitioners in the United States. He is the past Editor-in-Chief of CCH's magazine, Journal of Retirement Planning and a member of CCH's Financial and Estate Planning Advisory Board. His practice includes family wealth transfer and preservation planning, charitable giving, retirement distribution planning, and estate administration.  

 

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CPAs: The Startup Community Needs You

BoardroomThere is a joke in Hollywood that no matter what one’s day job is, everyone has a headshot in their back pocket. In business, the back pocket accessory isn’t the headshot—it’s the business plan. The startup community is exploding across the U.S. Whether it’s Silicon Valley, New York City or Detroit, state and local governments are embracing startups and encouraging talent to call their fair city home. According to the Global Entrepreneurship Monitor, there was a 60% increase in startups from 2010 to 2011. But there is one important thing most startups are missing: financial guidance.

You and I know the value a CPA brings to any organization. But many startups don’t. The qualities a CPA possesses—integrity, competence and objectivity—are needed and missing from some startups. Not to mention the financial and business knowledge that makes CPAs trusted business advisers. Recently, a report was released that examined the appointments of accounting and financial experts to audit committees, exploring whether concerns about the status of these experts discouraged companies from appointing them.

Case in point: Groupon.

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Some Garlic Sauce for Your LinkedIn

Vegetarian personLima beans, broccoli, and mushrooms are among Americans’ most hated foods according to a recent survey.  I’m right there with them.  But I have found that mushrooms and broccoli are not so bad when smothered in garlic sauce or maybe topped with crabmeat. 

What does any of this have to do with social media? Many people think of social media as something they know they should do, like eating broccoli or Brussels sprouts, but it’s still difficult to swallow.  Perhaps you started a profile and joined a couple of groups at some point but you haven’t been active in months. Or years.  

Just like eating vegetables is a must to stay healthy, an online presence is a must for a healthy career, especially if you are considering changing jobs or want to expand your professional or client base.  “If you’re not on it [LinkedIn], you’re not in the game,” says Mark Lee, a tax director and author of blogs and professional journal articles about social media.

So here is my version of garlic sauce to tempt those of you who are leery of getting involved or have dropped out. 

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In the News: Preparing for the CPA Exam is Now Easier

The AICPA has recently taken steps to make preparing for the Uniform CPA Exam easier for international students and candidates on the go with two exciting new developments.

Recently, the AICPA announced it had expanded its website, ThisWaytoCPA.com to students overseas who may now register and create profiles.

The website, designed to educate college students and CPA-exam candidates about the path to becoming a CPA, now contains information to help international students understand the process of registering for the CPA exam and becoming a U.S. CPA while living overseas.

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Key Income Tax Planning Ideas for 2012

This year presents an unprecedented opportunity for CPAs to differentiate their firm and services and show that they provide significant value to their clients by having all of their clients' financial planning needs in mind, including retirement, estate, tax, investment and insurance planning. With so many unknowns in 2013 compounded by an election year, clients need to take advantage of many financial planning avenues now to avoid missing crucial opportunities to protect their nest egg and increase their net worth. Listen to Bob Keebler as he discusses how CPAs can use this uncertain time to help their clients plan for the future.

Key Income Tax Planning Ideas for 2012

Robert S. Keebler, CPA, MST, DEP, Partner, Keebler & Associates, LLP. Bob is a 2007 recipient of the prestigious Distinguished Estate Planners award from the National Association of Estate Planning counsels. From 2003 to 2006, Bob was named by CPA Magazine as one of the top 100 most influential practitioners in the United States. He is the past Editor-in-Chief of CCH's magazine, Journal of Retirement Planning and a member of CCH's Financial and Estate Planning Advisory Board. His practice includes family wealth transfer and preservation planning, charitable giving, retirement distribution planning, and estate administration.  

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International Banking Rules Making Their Way into U.S.

Basel capital requirements banksAfter the financial crisis of the late 2000s, the global public’s view of the banking sector took a severe hit.  This sparked a need to finalize the revisions to the Basel Accord (Basel II) in order to restore confidence in the banking system and gain the general public’s trust. One way of accomplishing this goal is by requiring banks to maintain strong capital positions to be able to withstand any future market shock.   On June 7, the U.S. Federal Reserve issued the Basel III documents for public comment.

If you have regulatory reporting responsibility over banks, you should assess the proposals to understand how your or your client’s daily operations could be affected. The Federal Reserve has posted a Q&A on its website to discuss the specifics of Basel III. Each of the three proposed rulemakings is discussed below. Banking organizations that are not active internationally or are not subject to the market risk rules only need to review the first two notices of proposed rulemakings.

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