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14 posts from February 2016

From the Frontlines: Meet Kimberly Ellison-Taylor, CPA, CGMA

Welcome to the first post in a series focused on sharing the perspective of diverse CPAs

Kimberly Ellison-TaylorFull disclosure: All through my years in school, I was known as a teacher’s pet. Some kids may have been discouraged by this status, but it didn’t bother me. I had my heart set on a career—at the ripe old age of 8—and that was to become a CPA.

So I went out of my way to surround myself with educators — teachers, principals, librarians — that set high expectations for me and helped get me closer to that goal. Moreover, they returned the favor by setting high expectations for me. There was always a voice in my childhood saying, “This little girl has potential.”

Of course, having potential is just the beginning. Moving the needle to accomplishment takes hard work and the right people in your corner, a combination I’ve wholeheartedly embraced on my path to success.

Continue reading "From the Frontlines: Meet Kimberly Ellison-Taylor, CPA, CGMA" »

Writing Off Expenses on a Martian Farm: The Trouble with Oscar-Nominated Clients


LeoIt’s Oscar season, and this year’s list of nominated films includes many characters you definitely wouldn’t want to meet in your reception area on a frantic Saturday morning. As busy season gets into full swing, here are some potential nightmare clients from current and past Oscar-nominated movies that you’ll be happy you don’t have to face in person.

Hugh Glass, “The Revenant.” The bearskin coat kind of says it all, doesn’t it? It’s certainly going to set this man apart from most of the usual clients. Glass is a fur trapper who’s left for dead and faces extraordinary hardships during a long, harrowing journey through the wilderness. At some point he wins a tough fight with a grizzly and uses its skin as a coat. Understandably, he’s not a big talker, so it will be hard to determine his long- and short-term financial goals. You also have to expect that much of his documentation for income and expenses is hard to locate.  

Mark Watney, “The Martian.” Talking about working with a client remotely! This takes virtual services to a new level. And while you may have wrestled with the complications of filing for U.S. expatriate or foreign clients before, when you deal with interplanetary tax situations you’re really breaking new ground. Another wrinkle: Where and how are you supposed to report information on income and expenses from Watney’s Martian farm?

Continue reading "Writing Off Expenses on a Martian Farm: The Trouble with Oscar-Nominated Clients" »

Expert Advice on Not-for-Profit Board Service


Board membersThe AICPA Not-for-Profit Section recently hosted a Facebook chat providing advice for those looking to join a board of directors. The event was an opportunity for the public to engage in a conversation with experts working with not-for-profits and serving on boards.

Two members of the AICPA Not-for-Profit Advisory Council were online to answer participants’ questions during the chat. Carolyn Mollen, CPA, is the Chief Financial Officer at Independent Sector, a leadership network for nonprofits, foundations and corporations. Brian Yacker, JD, CPA, is the Managing Partner of YH Advisors, a CPA firm focused solely on addressing the tax, legal, audit and accounting needs of all different types of charitable and other tax-exempt organizations.

Since the chat was such a success, we wanted to share a few of the top questions on AICPA Insights.

 

Question: What are the challenges faced by nonprofits today?

Carolyn: Too many to list! In all seriousness, non-profits face many of the same challenges as the private sector, including information security issues, changing technology, talent recruitment and retention, and general economic pressures. However, not-for-profits also must deal with challenges unique to the sector, such as a changing funding landscape and how to find effective ways to measure impact and evaluate performance.

 

Question: Is it standard for not-for-profits to expect board members to act as fundraisers? If so, would it be better to turn down a position as a fundraiser if you aren’t confident in your fundraising abilities?”

Carolyn: In my experience, asking board members to assist with fundraising is very common in organizations that rely on donations as a revenue source. The board has a fiduciary responsibility to ensure that the organization has adequate resources to serve its mission, and fundraising is often a key component to this. Before joining a board, it is always a good idea to ask about fundraising requirements and make sure that it is something you can commit to comfortably. From an organization’s perspective, I’d recommend evaluating fundraising requirements carefully to ensure that you are able to recruit the right balance of skills and backgrounds, however. While having a well-connected board focused on fundraising can be a great thing in terms of bringing in revenue, it can lead to problems if the board lacks diversity and skills in other areas.

 

Question: What has been the most rewarding aspect of being a not-for-profit board member for each of you?

Brian: For me, being able to play my part in the furthering of an organization’s charitable mission is most rewarding aspect to me.

Carolyn: Board service has been a way for me to connect with organizations and causes that I feel close to and feel like I'm able to add value. I've been drawn in particular to theater organizations because in my past life, I was a theater major and thought for a long time that would be my career. Board service has allowed me to take my professional skills and apply them to causes I care about.

 

Question: What is a conflict of interest and how do I know if I have one?

Brian: A conflict of interest exists when the personal or professional interests of a person affects his or her ability to be objective. In the board context, a conflict of interest arises when a board member (or anyone considered to be related to the board member) undertakes a transaction with the organization, even if the transaction involves the board member providing a discount for their services. Conflict transactions need to be highly scrutinized by the board before they are undertaken. Some conflicts may need to be reported on an organization’s IRS Form 990, the annual information return filed by most tax-exempt organizations, so it is important to have a conflict of interest policy. The AICPA Not-for-Profit Section has addressed the most common conflict-of-interest issues and crafted sample language for inclusion in a policy document you can download here.

The AICPA’s Not-for-Profit Section is a community that supports not-for-profit professionals and business advisors. For more information visit aicpa.org/NFP.

Sandi Matthews, CPA, Technical Manager, Not-for-Profit Content Development, American Institute of CPAs.

Board of Directors image courtesy of Shutterstock

Pumping Up the CPA Pipeline with AICPA Legacy Scholars Program

College can be very expensive – I’ve got reams of cancelled checks to my student loan provider to prove it - but it’s also the best way to increase one’s chances of economic mobility. A college degree is essential if you’re planning to earn a CPA license.

The AICPA has long been committed to ensuring that there is a strong supply of talented CPAs in the pipeline to help the profession continue to meet the needs of U.S. capital markets. One of the ways the AICPA does this is through our AICPA Legacy Scholars Program.

The program, established in 2011, awards recipients with a one-year scholarship. It uses on-campus service work to help them develop the soft skills, including leadership and communications, needed to thrive in the accounting profession. Scholarship recipients plan, promote and execute specific on-campus events each semester that promote the value of the profession to others. To date, more than 300 students have participated in the AICPA Legacy Scholars program

14089-331 AICPA Legacy Scholars Seal_color_FThe AICPA Legacy Scholars program comprises four distinct awards:

AICPA/Accountemps Student Scholarship

AICPA Foundation Two-Year Transfer Scholarship

AICPA John L. Carey Scholarship

AICPA Scholarship for Minority Accounting Students

Continue reading "Pumping Up the CPA Pipeline with AICPA Legacy Scholars Program" »

CPAs Well-Positioned to Help Manage Cybersecurity Risk

CybersecurityCybersecurity is becoming a critical issue as consumers increasingly entrust their most confidential information – including Social Security numbers, tax identification numbers and financial information – to companies that store this data electronically. As companies look for third-party assessment and verification of their cybersecurity risk management program, CPAs are well-positioned to provide these services – and the more comprehensive definition of attest that many states have adopted ensures that only CPAs can provide cybersecurity attest services in accordance with the AICPA’s high standards.

Attest services are those services that are limited to licensed CPAs and can only be performed by licensees through CPA firms. They include audits, reviews of financial statements and examinations of prospective financial information.

Continue reading "CPAs Well-Positioned to Help Manage Cybersecurity Risk " »

Two Lies & One Truth about Personal Financial Planning

Personal Financial PlanningFriends and colleagues ask me all the time, “Why do you specialize in personal financial planning (PFP)?” That’s easy to answer, but let’s see if you can figure it out based on a game you’ve probably heard of: two truths and a lie, or in this case, two lies and one truth.

Lie #1: PFP is only about product sales and investments.

Clients are looking for more than tax advice and tax planning. Based on my experience of working with clients, as well as networking with leading CPAs who offer financial planning and those who hold the CPA-exclusive Personal Financial Specialist credential, what clients really want is integrated advice on all of their financial affairs. This includes tax, estate, retirement, investment and risk management/insurance planning.

Continue reading "Two Lies & One Truth about Personal Financial Planning" »

Gaming for Change: How Technology is Changing Financial Literacy

Gaming for ChangeWith the financial landscape shifting seemingly every year, it comes as no surprise that consumer finance tools are also transforming and becoming more necessary. This is especially true when it comes to educating younger generations, and the AICPA’s Feed the Pig campaign knows this all too well.

Since the campaign’s launch in 2006, the promotion of our tools evolved from focusing on TV, radio spots and other traditional media to instead looking to the digital space. As much as this shift has followed advancements in technology, it has also tracked the developing needs of our audience. Young adults look to social media for socialization, news, advice, just about everything. Feed the Pig has taken our message and resources to where our target audience is already: Facebook, Twitter, Pinterest, Tumblr, and now Snapchat. Through these platforms, we can reach hundreds of thousands of people who are in need of personal finance tips.

Continue reading "Gaming for Change: How Technology is Changing Financial Literacy" »

As Estate Basis Deadline Looms, Executors’ To-Do List Spirals

To do listUpdate: Since this blog post was published, the IRS extended the due date for Form 8971 basis reporting from Feb. 29 to March 31. For more informaiton, see Notice 2016-19.

Who thinks being an executor (or trustee) of an estate is a glorified and envied position? Have you always dreamed of being an executor and having that wonderful title – and I guess a few fees?  Have you ever served as an executor or trustee and wished to never be in that role again? 

In case you didn’t know it already, executors have many duties and responsibilities, including:

  • Setting up a bank account for incoming funds and paying any ongoing bills;
  • Maintaining property until it can be distributed or sold, and then distributing assets and disposing of other property;
  • Dealing with the probate court – filing the will and an inventory of the estate’s assets with the probate court, and representing the estate in court; and
  • Dealing with liabilities and taxes – providing notice to creditors, paying the estate’s debts and taxes, and, starting at the end of February, preparing and filing estate basis statements with the IRS and beneficiaries.

Continue reading "As Estate Basis Deadline Looms, Executors’ To-Do List Spirals" »

Young Love Birds: Take Heed of Old Marrieds on Valentine’s Day

How to Celebrate Love While Staying on Budget

Valentine's day

This year, Americans will spend an estimated $17 billion on Valentine’s Day gifts for significant others, family members, and pets. (Don’t laugh—Americans spent more than $700 million on their pets last Valentine’s Day.) According to the National Retail Federation, the average person spends $142.31 on the day of love. Less likely to spend that much? Those married or coupled for more than five years. Whether they’ve lost that loving feeling or they’ve wised up about inflated prices on Valentine’s Day, young people can learn a thing or two from long marrieds and save a few bucks.

Continue reading "Young Love Birds: Take Heed of Old Marrieds on Valentine’s Day" »

Absurd Tax Break Requests: Darth Vader and Other "Clients" Weigh In

Darth Vader‘Tis the season that tax practitioners must break it to clients that no, you can't write off that trip to the Bahamas as a medical expense (yes, we understand it reduced your stress), claim the Golden Retriever as a dependent or tell the IRS that Botox use is a legitimate business expense because it helps you sell more homes. To put this annual ritual of wishful thinking in perspective, perhaps it would help to consider what types of tax breaks some of our most famous characters in film, TV and literature would try to claim.

Below are excerpts from focus group interviews with these characters talking about the tax breaks to which they feel that they are entitled. It seems as if they didn't all get along, and maybe it had something to do with that good versus evil thing. Or maybe it was the "but my tax break makes more sense" philosophy that can infect anyone, even the good guys.

Focus Group 1

Facilitator: Thank you all for coming here today to share insights on how the tax code could be improved and made fairer for you. Our group includes Frank Underwood, from “House of Cards,” Sheldon Cooper, star of “Big Bang Theory”, Superman, and Cruella de Vil, of “101 Dalmatians” fame. President Underwood, we'll start with you:

Frank Underwood: Thank you, it's a pleasure to be here. I think with so many people needing help, let's eliminate any provisions that benefit people like Jackie Sharp. She's the Assistant House Minority Whip and married to a surgeon – now why would they need a tax break? You really need to take a look at what she's doing. And, I think, perhaps, I should get a deduction just for being me. Maybe even named after me.

Continue reading "Absurd Tax Break Requests: Darth Vader and Other "Clients" Weigh In" »

Estate Planning for the 99 Percent

Estate planningThe CPA financial planner has a new challenge: the majority of our clients’ estates will not be subject to the federal estate tax when death occurs. If this is true, then how do we help them plan for the future, as well as convince them that planning is still important and necessary?

I call this the “new reality” in financial and estate planning. In 2015, the applicable exclusion from the federal gift and estate tax was $5.43 million, indexed annually for inflation, and the 2015 applicable exclusion from the generation-skipping transfer tax (GST) was also $5.43 million. These numbers are now adjusted to $5.45 million for 2016. Clients whose estates fall below this threshold make up 99 percent of the clients we work with in our practices.

However, we can no longer say, “I will plan your estate and save you taxes.” With estate tax savings almost a non-issue, we must adjust, motivating the client to focus on non-transfer tax and income tax aspects of planning that have a large impact on their lives.

Continue reading "Estate Planning for the 99 Percent" »

What Do Super Bowl Commercials and CPA Marketing Have in Common?


Super bowlI don’t know about you, but my favorite part of the Super Bowl isn’t the first kickoff or the half-time show, it’s the commercials. They are known as being some of the best, and definitely the most expensive, in the industry. In fact, thirty second spots for Super Bowl 50 have sold for as much as $5 million apiece. Companies spend months developing commercials that will capture the audience’s attention during the game and be remembered long after the last touchdown. Brand recognition is key. However, what good is it if the viewer has a good laugh but can’t remember the product being promoted? This year’s ads are rumored to feature the likes of Christopher Walken, Alec Baldwin and Amy Schumer. Given that the Super Bowl is the most watched television event each year, it is no wonder that companies like Amazon, Budweiser and Doritos return with commercials time and time again.

The Super Bowl advertising phenomenon got me thinking about CPA marketing. Although CPA firms do not often have $5 million to spend on a thirty second commercial, there are several techniques firms can implement to raise awareness of the services they provide. In order to learn more about CPA marketing efforts, I spoke with two experts: Kari Schott from Inovautus Consulting and Brian Swanson from FlashPoint Marketing. Below are some tips on how to enhance your firm’s branding and marketing.

Personalized messaging is key. Some of the best Super Bowl commercials leave the viewer feeling as if they are being spoken to directly. Research has found that communicating 1:1 is more effective than communicating 1 to many. For CPAs, this might mean creating ads that speak to a specific audience, such as those placed in an industry association publication, and having personalized messages designed exclusively for that audience.

Continue reading "What Do Super Bowl Commercials and CPA Marketing Have in Common?" »

Chinese New Year Brings Business Relationship Lessons: 12 Tips

Chinatown londonChinese New Year, sometimes known as Spring Festival, is a centuries-old celebration of the lunar New Year. Widely celebrated in China, the festival is the pinnacle event of the year, also honored across Asia, particularly in areas with large Chinese populations, including Macau, Taiwan, Singapore, Thailand, Cambodia, Indonesia and the Philippines. It is considered a major holiday in Chinese culture, and is a time for families to be together.

If you have clients or co-workers in China or of Chinese descent you may want to learn about do’s and don’ts during next week’s Chinese New Year, which begins officially Monday, Feb. 8 and lasts for two weeks. The holiday really kicks off on Sunday, with the traditional New Year’s dinner, which is thought to be the most important meal of the year.

Whether you have colleagues who celebrate Chinese New Year or not, this list of do’s and don’ts can help you have a luck-filled New Year.

Continue reading "Chinese New Year Brings Business Relationship Lessons: 12 Tips" »

4 Steps to Creating a Social Media Policy for Your Firm

Social media strategyOne way to deepen existing client relationships and connect with more prospects is to use social media. While LinkedIn, Twitter, Facebook and other applications will help your practice evolve, social media also presents several compelling challenges, especially when it comes to compliance.

If your firm is planning to use social media, you’ll want to create and maintain a social media policy. Keep in mind that this policy is not meant to restrict activity for tweeting and posting, but instead to establish parameters to meet these challenges and satisfy compliance requirements.

Four Steps to Your Policy

Your social media policy should outline what outcome you hope to achieve from social media and how you will achieve it. Here are four areas to consider:

  1. Vision. Your vision will detail how you and your team perceive social media, respond to engagement and think creatively for ongoing communications and initiatives. Consider it the extension of the culture of your business – the reason why you come to work and why clients stay with you.
  2. Planning. Having conceptualized and defined how you want to use social media, your plan should identify the platforms you will participate in, such as a blog, Twitter, LinkedIn, Facebook and others. During this stage, you should also determine who will manage these platforms. Will it be comprised of internal staff, external parties or both
  3. Purpose. Financial planners choose to use social media in different ways. How will you define your experience? Consider the following when determining how to engage:  
  • Do you want to use social media as a customer service channel?
  • Do you want to share educational tips, often delivered in client letters, conference calls and meetings, via social media?
  • Are you interested in leveraging the business development nature of social media? If so, you might focus on expanding your network of connections on LinkedIn.
  • Do you want to be known as a thought leader in your area of expertise? If so, developing credible content such as articles, videos and podcasts might be a good way to get your name out.

Certainly, it would sound natural to respond with, “I’d imagine we’d do all of those things at some point.” That is a safe assumption; however, in getting started, opting for a focused starting point helps you shape that voice and cultivate a rhythm to your use of social media.

  1. Goals. By the time you are ready to set goals, your social media vision has taken on a clear shape for you and your team. Like that financial plan, you can now start to envision mile markers and longer term goals you would like to achieve. Don’t neglect to consider how you could measure your progress of these goals, ensuring you factor analytics into your strategy.

Final Checklist

Social media policy is the ticket to entry to the use of social media. Start there and you will be more prepared to move ahead. In the meantime, here are a few areas to address:

  • When selecting a compliance solution for social media – think about ease of use. Choose a provider who can accommodate this with simplicity and meet your needs.
  • Recognize that content that gets shared widely and publicly may fall into the advertising and marketing materials classification. Understand who regulates you – FINRA, SEC, states – and know how advertising content is treated.
  • Keep in mind that testimonials are prohibited. We may not like it – and we know they are very valuable for word of mouth referrals, but when they are written, they are like ads. Just steer clear until the regulatory bodies change their minds.
  • If in doubt about what part of social media is static content (blog posts, articles, profile backgrounds and bios) versus interactive (tweets, status updates), have your content compliance-reviewed before you use it.

And, speaking of compliance, you’ll want to get some very clear direction from your compliance provider for social media. Some are stricter than others, so check to make sure you are following the rules. And, above all, have fun!

PFP members and PFS credential holders can listen to a podcast on this topic. 

Blane Warrene, MobileGuard. Recognized as an industry leader in financial services marketing, compliance and technology, Blane has worked in progressive roles for broker dealers, investment advisors and asset managers. 

Social media strategy image courtesy of Shutterstock

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