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11 posts from June 2018

Ones and zeros aren’t always heroes

Shutterstock_161746904In 1984, an entire profession that had survived more or less intact for 600 years found itself facing a monumental, earth-shattering change. It was that year Apple Computer released the Macintosh. Laughably underpowered by today’s standards, it nonetheless represented the literal future of computing with its graphical user interface (something the consumer market had never seen before) and suite of creative software.

Quickly following its release, industrious programmers took advantage of the available printing abilities of the machine—robust for its time—and created the first desktop publishing software. Just like that, businesses, government agencies, churches and even families who once turned to professional print houses to design, typeset and print everything from flyers and post cards to catalogs, were able to bring at least the design portion of the equation in-house. Suddenly, everyone was a “designer.” It was a game-changer for markets, but it also led to a lot of truly awful design and typesetting, perpetrated by amateurs with little to no training in visual arts.

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Goooooooooal: Planning your way to financial victory

AICPA_LifeDecisions_Info_FinalHave you ever been to the gym the first week in January? It’s usually packed with folks looking to improve their health. Many of these newcomers are there as part of their New Year’s resolution, while others may be trying to rebound after a particularly indulgent holiday season. And that’s a noble pursuit. However, very few of them are likely to still be going to the gym a few months later. I’m not a psychologist, but it seems to me that human nature responds to a setback or feeling of being stuck in a rut with a flurry of positive changes. Unfortunately, once our memory of what caused us to want to make those changes fades, we tend to slip back into our old ways.

I sat down with Neal Stern of the AICPA’s National CPA Financial Literacy Commission to talk about how Americans can make some positive changes to their financial plans – and stick with them for the long term.

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IRS guidance still needed on key tax reform issues

GettyImages-621474914As a CPA in tax, you know it’s vital to stay on top of tax reform. That means you’re watching the news coverage. You’re reading the articles. You’ve subscribed to e-News and various news alerts. You’re joining webcasts and taking self-study courses.

But there’s still a lot to learn, and some information just isn’t available yet.

The U.S. saw the most significant overhaul of its tax code in more than three decades at the end of last year. And when the Tax Cuts and Jobs Act was finally signed, it set off a guidance chain reaction at the Internal Revenue Service (IRS).

While processing its typically heavy busy-season workload, the IRS also focused on issuing guidance on several high-priority changes to allow for effective implementation of the new law. The IRS continues to issue news releases, notices, instructions and other forms of informal guidance on the most pressing items.

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AICPA to IRS: we need guidance on virtual currencies

GettyImages-678790644More and more people are investing in virtual currencies (also known as “cryptocurrencies”), such as Bitcoin. A recent study says that one in ten Americans owns some kind of virtual currency. Given this rise in popularity, tax preparers need to ask their clients whether they own or trade any virtual currency.

The first thing tax preparers wants to know is, “what is virtual currency and how is it taxed?”  Most people do not know the answer to this question, and they’re not alone. The AICPA has developed multiple comment letters on this issue because we hear from our members across the country that virtual currency is an emerging area they want to understand and learn more about. 

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7 risks small businesses need to consider

Shutterstock_481198423Except for an expanding waistline, what could be risky about ice cream? Ask the small business owners overseeing an ice cream shop on the boardwalk that caters to summertime beach crowds. They’re a small, family-run business and their main revenue is generated in the months of June, July and August. The income from those months must sustain them through the slower months. What happens if they aren’t prepared for an event that affects their shop? Will their business survive? That’s where you come in.

Risk, schmisk?

Risk is a relative term to your clients. Some risks are minor and easily handled in the moment; for example, an employee fails to show up to work. Other risks pose an existential threat to the business, such as an accident, natural disaster or fire.

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4 tips to smart budgeting for new graduates

Shutterstock_690887317What if you put together a budget but forgot about income taxes that would be deducted from each paycheck? That’s what happened to me when I graduated from college, so I can tell you: It would be a disaster! My first paycheck was a huge shock, since I was taking home much less than I had expected. But incorporating a few easy budgeting tips can help set you up for a path to prosperity and avert potential disasters.

Start early. Right after graduation, create a budget before committing to long-term expenses – like rent – so you start with a clean slate. The largest part of any budget will likely be housing costs. A good rule of thumb is that they should not add up to more than 30% of your salary. For example, if you make $50,000 a year, your total rent should be no more than $15,000 a year, or $1,250 a month. If you live in a high rent area, then 30% may not be realistic for an entry-level salary – which means you may have to scrimp on other items or find roommates.

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3 tips to help your clients through hurricane season

Shutterstock_494660788With some areas still dealing with the impact of last year’s disastrous hurricane season, it’s hard to believe we’re yet again in the midst of another one. This year, the National Oceanic and Atmospheric Administration (NOAA) predicts there will be 10 to 16 named storms, including up to four Category 3 or higher hurricanes. This is slightly above the 30-year average of 12 named storms, including three major hurricanes.

The extent of devastation in 2017 may have your clients wondering how they can prepare financially for worst-case scenarios. As their trusted advisor, you can help. Share these helpful tips, all of which can be found in the Disasters and Financial Planning guide for preparedness and recovery:

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A Father’s Day wish list

Shutterstock_1059277193First celebrated in 1910, Father’s Day is a day that goes far beyond greeting cards. It’s a day everyone honors fathers and all that they do for us. Whether it be advice, help from a handyman or just a hug, they deserve to be celebrated.

We asked CPA dads what they’re hoping to receive on their special day. Here’s what they said:

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4 ways to jumpstart the career you really want

GettyImages-180409192Some career paths move in a straight line. Others take twists and turns. Opportunities sometimes crop up when we least expect them, and we have to weigh the pros and cons to determine our next steps. If you were asked ten years ago to accurately describe your career path over the next decade, could you? I know I couldn’t.

I started my career at a large firm in audit and now I’m on an entirely different path that I would have never predicted. The winding road that led me to where I am today was built upon a series of experiences and intentional decisions along the way. Could your career course use more direction? Here are some tips to get on track, based on my own personal experiences throughout my career:

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Public vs. Private Blockchains: What CPAs should know

GettyImages-917325314The word “blockchain” has been tossed around as if all blockchains are the same. Real-time access to information, increased transparency and encryption are standard benefits of any blockchain. However, there are two different types of blockchains: public and private, both of which are important for CPAs to understand so you can decide which option is better for your organization or firm.

Public blockchains

The idea of a public blockchain is what most people think is, and what technology purists would consider, the “real blockchain.” Completely decentralized and open to any individual or institution to join (known as members in blockchain parlance), the most well-known example of a public blockchain is the one that runs Bitcoin.

While a purely public option does include many of the benefits associated with blockchain technology, these same attributes can make implementing a blockchain less than ideal for business purposes. By allowing anyone and everyone to join a public blockchain, the approval and consensus process can take too long for it to be it useful for the volume of daily transactions. And depending on how data is approved, the electrical cost can be too expensive for practical use, considering the sheer volume of information processed by most organizations.

 

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We’re helping CPAs improve their audit quality—here’s how

In a rapidly evolving business environment with new technologies changing the way we work, it’s more important than ever for CPAs to commit to performing high-quality audits. That’s why the AICPA launched the Enhancing Audit Quality initiative, or EAQ, in 2014. Through EAQ, the AICPA analyzes data to determine the areas where firms need to improve quality most. Then, we develop relevant, free resources and education firms can use in their practice.

In the past few months, EAQ has helped the profession make further progress toward improved audit quality. Read the “Enhancing Audit Quality: 2018 Mid-Year Progress Report” below to learn more about that progress and to access free resources you can use to improve your audits.

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