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14 posts from April 2015

CPAs Play an Essential Role in Improving the Financial Education of All Americans

As Financial Literacy Month draws to a close, it’s important to reflect on the essential role CPAs play in helping improve the financial knowledge of Americans.  Educating consumers about their finances is the volunteer cause of the CPA profession.  Through the AICPA’s 360 Degrees of Financial Literacy program (360), thousands of CPAs from all over the country volunteer their time to speak with consumers of all ages about their finances. Increasing our citizens’ financial education is critical to our country’s financial success, and the AICPA is leading the way for the CPA profession.

During my tenure as chair of the National CPA Financial Literacy Commission, CPAs across the country achieved much and celebrated many milestones in financial literacy.  I have been involved with developing and releasing several rounds of creative from Feed the Pig, the AICPA’s PSA campaign with the Ad Council, and, along with the rest of the Commission, participated in releasing the AICPA’s first consumer publication, Save Wisely, Spend Happily, authored by Commission member Sharon Lechter, CPA.  Commission members promote 360 and its related programs, and represent 360 before the media and national organizations. Our members are essential in promoting 360 with AICPA leadership, committees, state society leadership and key accounting organizations. I am proud of the work Commission members do and the leadership they provide.

 

 

CPAs in public service have also played an important role in the profession’s financial literacy efforts. On April 22, U.S. Representative and Congressional Caucus on CPAs and Accountants member Michael Conaway, CPA (TX-11) gave a speech on the House floor highlighting April as Financial Literacy Month. Representative Conaway noted the important role that CPAs across the country play in improving the financial literacy of Americans, and how, for over 10 years, the AICPA, members and state CPA societies have worked together through 360.

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5 Steps to Help You Manage Up

Managing up wordleHave you ever accepted a new project even though your plate was already full? Many of us have been in this position. We are so driven to succeed that we say yes to these new assignments without much thought. As a result, we find ourselves stretched thin, making us overwhelmed, discouraged and ineffective. This in turn affects our productivity, negatively impacts the firm or company and derails our priorities.

If you are a young CPA with aspirations—whether your goal is to take on a leadership role, move into management or simply make your current role align more with your vision of the future—there is an approach you can take that will help you get ahead without having to say yes all of the time. It’s called “managing up.”

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AICPA Celebrates 25 Years of Top Technologies for CPAs

TechnologyWhat was technology like 25 years ago? In 1989, when the AICPA conducted its very first Top Technology Initiatives survey (TTI), the most popular technologies discussed were the spreadsheet and, of course, something called the Internet.

It’s 2015; dial-up is a relic and cloud-based alternatives to physical backups are much more common. Today’s technologies thrive on a 24-hour, cloud environment that enables cross-platform collaboration.

The 25th anniversary North American TTI Survey conducted in 2014 expounded on this trend in the profession and broke down the top IT priorities in the United States and Canada, with more than 3,000 CPAs and chartered accountants weighing in on the most pressing issues affecting their delivery of service in firms, and in business and industry.

Here is a list of the top 10 U.S. initiatives ranked by priority. I will elaborate on the top IT concern below.

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Help Us Improve the “Service” in the Internal Revenue Service

Man on hold with IRSIt is no secret that IRS service during this past tax season plunged to a level that I can only describe as unacceptable.  The anecdotes from members keep coming in, and from what we hear, the predicted 53-minute average wait time to reach someone on the IRS Practitioner Priority Hotline is not so much an average as it is wishful thinking. That prediction came from IRS Commissioner John Koskinen, who said in November that the IRS will try “to do as well as we can. As well as we can is still going to be miserable.” 

Taxpayers trying to get through to a representative are not faring much better as discussed in recent news reports and shown in the chart below. In its annual report to Congress, the National Taxpayer Advocate deemed this to be the most serious problem facing taxpayers. 

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The Importance of Financial Literacy Month

Fin Lit Month 2015 2In a few short months, millions of new college graduates will enter the job market with an average of $30,000 in student loans. Student loan default rates are rising as recent graduates struggle to pay down their debt. The reason? New graduates will have degrees that have prepared them for careers or graduate school, but most will not have the knowledge to make sound financial decisions. That is why financial literacy is so important.

April is Financial Literacy Month and this year the AICPA marks the occasion with a renewed sense of purpose. With CPAs as our champions, the AICPA has advanced the financial literacy cause for over a decade, and we will continue to provide leadership in improving the financial understanding of future generations. It is critical not only for their individual success, but for the financial success of our country. For more than 10 years, the AICPA, its members and state CPA societies have been leaders in financial literacy by providing free programs, tools and resources for consumers, educators and more.  The AICPA’s flagship 360 Degrees of Financial Literacy program is the national volunteer effort of CPAs to help all Americans understand their personal finances through every life stage. The program combines grassroots advocacy with free public resources and tools for CPAs to educate Americans of all ages. In addition, Feed the Pig, the AICPA’s award-winning public service campaign with the Ad Council, provides tools and resources aimed specifically at Americans aged 25-34, an age group that is making major life decisions, often with little financial experience or guidance.

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Mine Client Tax Returns for Financial Planning Opportunities

Tax returnAs you transition from tax season and begin thinking about new business, you may find that some of your highest quality leads are right in front of you. Many CPAs tell me they want to begin offering financial planning as part of their practice, but just don’t know how to get started.

One of the best places to start is probably right in from front of you – your clients’ federal individual income tax returns. The return is your easily-accessible roadmap to their financial planning needs.

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Medicare, Blind Men and an Elephant

Blind Man and ElephantLearning about Medicare is similar to the story of the blind men and the elephant. The story of differing perceptions is said to have originated in India. In the tale, several blind men are allowed to touch an elephant, but each man may touch only one part. One man touches the tusk, one a leg, one the trunk and one the tail. After they are finished, they get together and discuss what they discovered. Of course, each man’s description of the elephant is different from the others. Each man is correct, but each man is also wrong.

Medicare is much like the elephant and the blind men. Each beneficiary has his or her own perception of what Medicare is -- or what it is not. One beneficiary may focus on the cost of Medicare, the monthly premiums, and the various co-payments and co-insurance that must be paid. Another beneficiary may focus on the freedom to select a physician or other healthcare provider without having to obtain prior authorization, while yet another person may focus on the prescription drug coverage and the problems in obtaining a particular prescription drug.

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Tax Season Wrap Up: How to Recharge, Regroup and Move Forward

BeachYesterday we asked CPA Letter Daily readers: “How do you celebrate the end of tax season?” More than a majority of the respondents stated that they would celebrate by either taking time off or planning a staff dinner, happy hour or party. Another 32 percent plan to continue working by moving on to the next task on their list. Here we share tips for how to rejuvenate, plan and prioritize the next steps for your practice.

Recharge

Figuring out how to rest can be stressful in itself, especially if you have a larger than expected backlog of work either from returns that still need to be prepared or non-tax work postponed until “after April 15.” Consider the following ideas to get your groove back:

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Broadening Our Definition of Financial Literacy

Micpa-logo-Here at the Michigan Association of CPAs, we’ve embarked on some projects that go beyond the traditional approach to financial literacy. We’ve had the fantastic opportunity to work with Michigan’s Governor Rick Snyder, CPA on several initiatives aimed at our most vulnerable populations, including Reinventing Mi Retirement and the Detroit Income Stabilization Fund Program.  

The Reinventing Mi Retirement initiative was introduced by Governor Snyder in June 2014, and it focuses on providing financial education to help Michiganders better prepare for retirement. The initiative officially kicked off in October 2014 with eight locations in Michigan offering free informational sessions for community members. CPA members participated at locations across the state to provide free financial checkups, helping attendees gain a better understanding of budgeting and financial preparedness. Attendees also received an incredibly thorough financial toolkit, which our members contributed to as well. The event came together in just a few months due to the strong partnership we have with the State of Michigan and the incredible commitment of our member volunteers. We look forward to new initiatives planned in 2015, including events targeting younger people who maybe aren’t thinking about retirement yet, but need to be!

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The Secret to Retaining Top Talent? Development

Professional developmentWhat keeps CFOs up at night? Quite a few things, as it turns out. Increased global competition, the volatile economy, cybersecurity risks and an overwhelming amount of big data—to name a few topics. But it’s another subject which consistently comes up in my conversations with CFOs and other finance leaders, that hits even closer to home: talent. Today’s finance departments have a real need for the right team with the right mix of skills and competencies, not only in accounting, but in business, leadership, communications and other non-financial disciplines.

I’ve spoken to many executives whose organizations don’t have the resources or funding (or neither) to provide the full range of learning opportunities to their employees. According to a study by Deloitte, “Leadership and learning have dramatically increased in importance, but companies seem less capable to address those challenges. While the importance of learning and development quadrupled compared with last year, companies have struggled to redesign the training environment, incorporate new technologies, or employ digital learning tools.”

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Potential State Tax Law Changes on the Horizon

In and out of focusAs we get ready to put away our snow shovels, gloves and winter coats, and take out the sandals and sunscreen (yes – we probably should be using it all year), Congress and many state legislatures are considering some important tax changes. The AICPA and state societies are closely monitoring these issues and ensuring that the profession’s voice is heard:

  • State Sales Tax on Professional (Accounting) Services

With states searching to either expand their revenue base or reduce reliance on income taxes, several states are considering proposals to expand their sales tax to cover professional services, such as those provided by CPA firms. So far this year, 11 states (California, Connecticut, Hawaii, Indiana, Maine, Maryland, Mississippi, Missouri, Ohio, South Carolina, and Virginia) are considering the issue. Recently, Pennsylvania Gov. Tom Wolf (D) proposed a sales tax expansion that would include accounting services, but professional services provided to a business would be exempt.  The AICPA continues to work with state CPA societies and our profession partners to try to stop these proposals from becoming law.

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An (Instagram) Picture is Worth a Thousand Words: Tips for CPAs

Instagram 2 ImageIn the world of social media, new applications come and go every day. With all the different sites and apps out there, it can be hard to figure out which ones to use and how to use them. Instagram has taken the social world by storm and created a footprint that rivals big names like Facebook and Twitter.

When Instagram launched in 2010, it was unclear how successful it was going to be. In December of 2014, Instagram announced that its worldwide user base passed 300 million accounts, putting it ahead of Twitter and proving that it isn’t going anywhere anytime soon. It’s especially popular with Millennials, with 53% of people aged 18 – 29 using it every day.

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Due Diligence Reminders for Tax Extensions

Tax formOur hours get longer as we approach the downhill stretch of filing season, and it gets more tempting (if not mandatory) to file an extension for many clients. The proper preparation of an extension involves more than the entering of numbers on the extension form. And, the demands of filing season sometimes take over and quality control procedures and professional standards are overlooked in an effort to get everything filed.

This year will be especially complicated with Affordable Care Act items, a late start with extenders, many late documents from third parties and a culture that expects convenience and increasingly instant results. But the AICPA Code of Conduct, Circular 230, AICPA Statements on Standards for Tax Services (SSTSs) and the Internal Revenue Code (IRC) all still need to be considered in the preparation and filing of extensions for clients. The applicable standards include:

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Happy Financial Literacy Month

Fin Lit Month 2015Today, April 1, kicks off Financial Literacy Month. In addition to our year-round efforts, the AICPA, and CPAs across the country, participate in this annual event centered on improving Americans understanding of financial principles and practices. As part of this year’s festivities, 360 Degrees of Financial Literacy has launched a newly redesigned website with an updated set of tools and resources to better help Americans understand their personal finances and develop money management skills at every stage of life. 

Here are some of the other great, free events and resources to help your friends, family and clients improve their financial knowledge. 

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