States Moving to Conform Tax Due Dates with Federal Law

ConformityAs you recover from yet another grueling tax season, the optimist (and realist sometimes) in me says next year will be better with fewer practitioner frustrations. After many years of AICPA tax policy and advocacy efforts, Congress enacted several AICPA-supported federal due date changes and a de minimis safe harbor of $100 of income/$25 of withholdings for corrected Form 1099s that take effect for 2016 tax returns (2017 filing season).

New Federal Due Dates

As described in detail in the AICPA summary chart, these federal due date changes should provide a more logical workflow next year. Starting with 2016 returns, business entity investors’ Schedules K-1 are due before the investors’ returns are due, and foreign account information (FBAR) is due (and can be extended) when the individual returns are due. Here’s a brief recap of the new federal tax return deadlines: 

  • Partnership and S corporation information returns are due March 15, providing investor Schedule K-1 information to their partners and shareholders (including corporations) before the investors’ returns are due.
  • Tax returns for calendar-year corporations, individuals, trusts and estates, and FBAR are due on April 15.
  • The extended due date for partnerships continues to be September 15, along with corporations (until 2026). The extended due date for trusts and estates is September 30.
  • The extended due date for individuals and FBARs (and starting 2026, for extended corporations) is October 15.

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Use a Flowchart to Illustrate Client Wealth Transfer Goals

You consider yourself to be proactive. By age X, you have a well-thought-out estate plan. Your will states that 80% of your wealth will be distributed to your two children, while 20% will be donated to a charity close to your heart. All of this is set in stone, right?

Once estate documents are drafted, some may feel confident that their wishes and intent will always be carried out; yet, this is typically not always the case. While estate documents are static, a client’s life is dynamic and ever changing. CPA financial planners are uniquely positioned to ensure a client’s wealth transfer goals are continually being met.

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Asian and Pacific Islanders Have a High Degree of Cultural Diversity but Need Greater Visibility

Darryl NittaMay is Asian American and Pacific Islander Heritage Month, a celebration established in 1992 to recognize the culture, traditions and history of Americans of Asian or Pacific Islander ancestry as well as their achievements and contributions.

Did you know?

  • The term “Asian Pacific Islands” includes more than 50 countries and ethnic groups
  • According to the U.S. Census, Asian and Pacific Islanders are the fastest growing race in the nation
  • About 5.4 percent of the U.S. population is of Asian or Pacific Islander descent
  • As of 2007, there were 1.5 million Asian American-owned businesses in the United States—up 40 percent from 2002 (U.S. Census Bureau's Survey of Business Owners – Asian-Owned Firms: 2007, released May 2011)

Creating Environments Where Asian and Pacific Islanders Can Thrive

Within the CPA profession, there are more Asian and Pacific Islanders represented than any other minority group, including Hispanics and African Americans. Also, the numbers overall are increasing. However, the increase is small, and more can to be done to recruit and retain Asian and Pacific Islanders as well as other minority groups. In our firms, we can help promote Asian and Pacific Islanders by:

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How to Talk to Not-for-Profit Boards About Their Responsibilities


Board of directorsAs a CPA and community volunteer, I’m often asked to talk to not-for-profit boards about financial and governance topics. My presentations often generate lively discussions. Some people are surprised to learn that although it is not necessary to be a financial or business expert to serve on a board, there are some broad fiduciary responsibilities that apply to all board members. Most nonprofits are formed as corporations under their particular state’s law (I’ll leave the nuances to the lawyers), but a cornerstone of these laws is that board members owe a fiduciary duty to the corporation they serve on. A fiduciary responsibility is defined as the obligation to act in the best interest of another party, and this pertains to all matters regarding the not-for-profit, including its financial oversight. There are three basic responsibilities that apply to board members: the duty of obedience, duty of care and duty of loyalty.

Duty of Obedience

When I explain that all board members can be equally responsible and liable to safeguard the not-for-profit’s assets and interests, the response I often receive is, “The entire board? Even commissioners?” or “But I’m just a commissioner. I shouldn’t be held responsible!” The duty of obedience means board members are accountable for internal laws (that is, bylaws and policies) and all applicable external laws and regulations. For instance, the IRS can hold each board member personally liable for failure to pay certain taxes incurred by the organization. It does not matter if they are the Chair or President or “just” a member at-large; generally, all board members have responsibility.

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Have You Taken a Look at The New Clarified Attestation Standards?


ClarityIf you currently perform attest engagements—or expect to next year—you’ll want to check out the new standard sooner rather than later.

Like other standards released under the AICPA’s clarity project, Statement on Standards for Attestation Engagements No. 18 (SSAE No. 18), Attestation Standards: Clarification and Recodification, released last month, incorporates drafting conventions that make the standard easier to read, understand and apply. The new standard differs from SSAE No. 17.  

SSAE No. 18 introduces a “Common Concepts” section that applies to all attestation engagements. Additionally, the standard includes sections containing incremental requirements and guidance for the three levels of service in the attestation standards. These are: Examinations (reasonable assurance), Reviews (limited assurance) and Agreed-Upon Procedures. SSAE No. 18 also contains sections with incremental requirements and guidance for four specific subject matter areas, including Prospective Financial Information, Pro Forma Financial Information, Compliance with Laws and Regulations, and Controls at Service Organizations.

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One Man’s Journey From Poverty and Neglect to CPA and Inspirational Speaker

A conversation with Frank Thomas, keynote speaker at the 2016 AICPA Accounting Scholars Leadership Workshop

Frank ThomasOn May 18–20, about 100 minority accounting students will assemble in Durham, N.C., for the AICPA Accounting Scholars Leadership Workshop. The annual event draws accounting, finance and tax majors from across the country for an immersion into leadership development, CPA Exam preparation and the infinite benefits of earning the CPA credential.

Frank Thomas, a renowned inspirational speaker, author of RISE: Even Death Can’t Stop Me and previously a practicing CPA, is this year’s keynote speaker. Insights recently spoke with Thomas about his journey to becoming a CPA, overcoming profound childhood obstacles and observations on the future leaders of the profession.

Insights: What memories stand out to you on your path to becoming a CPA?

Thomas: Becoming a CPA is not the easiest thing in the world. Take the CPA Exam for instance, it’s one of the most rigorous exams in the world. It’s a difficult exam to prepare for, and it’s a difficult career path. I just remember how incredibly challenging it was.

I say that as someone who grew up in a home environment that was not ideal. My brother and I were raised by a single mother who gave her best but faced demons of her own. Drugs, alcohol, you name it. We were forced to raise ourselves. So I always knew it was up to me to face challenges and that I had to work twice as hard to make something of myself.

Becoming a CPA was the road I took.

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Hitting it Out of the Ballpark with the IRS’s Future State

Baseball IRSBaseball is ninety percent mental and the other half is physical.

-Yogi Berra

Spring time.  The first busy season is done – that’s when CPAs can catch their breath, relax a little, maybe even catch a baseball game. Speaking of baseball, CPAs are in a league of their own, no question about it, and our Tax Section helps get you there. Baseball also brings me back to my childhood when I was a huge Washington Senators baseball fan. But the future for the Senators was never bright; thoughts of the playoffs, let alone the World Series, were out of the question. But now with the Nationals in town, the future is much brighter.

I’m hoping that’s the case with the IRS as well.  Unlike Yogi Berra’s concept of accounting, the numbers have just got to add up for the IRS and, well, the IRS has dropped the ball in service.  We all know that, including the IRS. With two strikes against them in the realm of public opinion, the IRS has unveiled its Future State Initiative. You may know from reading my recent blog on IRS service levels that I thought the signs were starting to look good in terms of possibly starting to move the IRS service needle back in the right direction. 

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The One Career Move That Changed My Life

David Oransky - hi resQ&A With David Oransky, CPA/PFS

Pilot … sailor … entrepreneur … CPA financial planner. David Oransky, CPA/PFS, is open for an adventure in both his personal and professional life. Embodying the ‘can-do’ spirit and desire for ownership that defines the millennial generation, David left public accounting to begin a career in financial planning and now serves as principal and founder of Laminar Wealth. In order to help other young CPAs understand the career possibilities in financial planning I sat down with David to learn how one career-defining move changed his life.

 

Sarah Bradley: What is the one career move that changed your life?

David Oransky: It would have to be when I made the decision to leave my job and join a wealth management firm. I felt I was doing well in my role there, but realized my natural curiosity was in personal, not corporate, finance. When I gave my notice, partners and colleagues expressed concern about my decision. Looking back, I’m glad I listened to my heart. Today, I get out of bed every morning excited that I get to not only do work I find interesting, but also get to make a direct and positive impact on the lives of my clients.

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Not-for-Profit Section Celebrates One Year Anniversary


NFP team photoOn May 2, the AICPA’s Not-for-Profit Section marked its one-year anniversary. Today, as I write this article, our community is more than 3,600 members strong and counting.  As I reflect on my team’s work and that of all the tireless staff and teams of volunteers throughout the Institute who helped us nurture and grow this initiative, I am deeply grateful. I am also inspired by their commitment to providing high-quality specialized resources and learning opportunities for not-for-profit professionals.

About 52 percent of our current members are business advisers to not-for-profits, such as consultants, auditors and tax professionals. The remaining 48 percent are leaders working within the not-for-profit sector, including charities, human service agencies, faith-based organizations, associations, educational institutions and a whole host of other causes that are united by one common focus: achieving a mission to make a difference.

In the last decade, the growth rate of the not-for-profit sector surpassed both the private and government sectors. However, they face unprecedented challenges-- economic, regulatory and financial. Among fundraising organizations, competition for contributions is fierce. At the same time, the donating public wants accountability from not-for-profits. From a regulatory standpoint, state attorney generals are acting aggressively, prosecuting - and making an example out of organizations associated with or involved in wrongdoing. The resulting negative publicity does not just affect the entities involved, but can affect entire communities. It can trigger a ripple effect that becomes an impediment to attracting financial support for not only that specific entity but also related causes. Strong governance oversight and risk management are important for all businesses, especially not-for-profits because they live in the public eye.

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CPA Brand Research: The Good, the Challenge and the Opportunity

Brand infographicWhen most people think about a strong brand, Disney or Apple come to mind.  But when we at the AICPA think of a strong brand, we think of the CPA.  And we are pleased again to report that independent research confirms that CPA stands stronger than ever.

We are always pleased to hear from business decision-makers and investors that CPAs remain the most highly regarded and trusted business professionals, and we look forward to sharing that news with you.

The 2015 independent research commissioned by the AICPA again reveals a long list of affirming statistics about the value that the CPA brings to clients and the value the CPA credential offers the profession. The study also provides insight into global forces at play that both challenge the profession and point to areas of opportunity.

First, the good news: CPAs continue to inspire confidence across our key constituencies. Results of our focus groups, in-depth interviews and four nationally distributed online surveys, conducted by Applied Research & Consulting, show:

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Your Client’s Tax Return is a Gold Mine for Planning Opportunities


Gold mineNow that we’re past the April tax filing deadline, looking ahead to helping clients survive the upcoming 2016 tax year may very well be the last thing on your mind. Nonetheless, proactive CPA financial planners and tax professionals know that Form 1040 is a virtual gold mine with many nuggets of information to offer. The individual income tax return will not only yield opportunities to lower your clients’ tax liability and help them plan for their retirement, but is also beneficial for your practice.

You can expand your scope of services by adopting a more holistic financial planning approach. Portfolio managers, estate attorneys and insurance professionals focus on their specialized fields. However, a client’s CPA is likely the only professional on the team who is going to take the time to analyze the 1040.  This is nothing short of “having the window into everything going on in a client’s life”. For the practicing CPA financial adviser, it provides a natural springboard into deeper client conversations and provides opportunities to discuss new service offerings.

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When it comes to Financial Literacy, Small Steps Add Up Quick

Stacking cake

When I was just starting out my career, I was in the same boat financially as a lot of recent college graduates. My primary focus was making ends meet. For me, this meant making decisions about how much I could afford for rent and managing my day-to-day expenses so that bills got paid on time.

In the back of my mind, I understood that my student loans and a few thousand dollars in high interest credit card debt also needed to be addressed, and that paying the monthly minimum was a bad look. In those days saving for retirement and building up a nest egg was a nice, if seemingly unattainable idea, like summering in the South of France or playing professional baseball. Surely there are people who do these things, but I had no idea how they made it happen.

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Are You Cybersecurity Ready?

Cyber compliance

 

The interconnected digital world has been referred to as the wild, wild West. Hackers are eagerly looking to exploit the weakest line of code in mobile devices, applications and operating systems. And those are just a few of the types of technology at risk in today’s environment.

You’ve probably heard the old adage, “you don’t bring a knife to a gun fight.” Cybersecurity is no exception. In a cyber “gunfight,” only the most prepared organizations can survive a security breach. To assist organizations in preparing for cyber incidents, the Department of Justice’s (DOJ) Cybersecurity Unit released Best Practices for Victim Response and Reporting of Cyber Incidents, out lining steps to take before, during and after a cyber attack or network breach. 

The DOJ document provides best practices and indicates that organizations connected to the Web should evaluate cybersecurity readiness by preparing prior to, in response to and for recovery from an intrusion.  

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3 Things You May Not Know About Not-for-Profit Board Leadership

NfpIt is an honor to serve on a nonprofit board. In fact, financial professionals often serve in a leadership role as treasurers or finance committee chairs within the board itself. Though board leadership is certainly a meaningful way to give back in your community, it is not without its challenges. Finance committee chairs and treasurers assume additional leadership responsibilities that go beyond the responsibilities of board members at-large. 

Here are three things you may not know about not-for-profit board leadership:

1. Listening skills are paramount and require constant improvement.

You will be working alongside professionals from other fields, typically those with expertise related to the organization’s mission. For example, if your organization serves homeless youth, you may work with professionals from the social-work field. To lend your expertise to business planning and strategy, you will need to spend time talking with your colleagues who are experts on the subject matter and understand the organization’s theory of change. With different viewpoints the board, as a whole, will make better decisions.

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The Benefits of Globetrotting as a Way of Life

PassportJapan, China, Turkey, Italy and the Czech Republic are just five of the 23 countries I’ve visited during my ten years as a CPA in the forensic services arena. In a world that has become increasingly connected, more and more CPAs will find themselves working with clients whose interests and connections lie in one or more countries around the world. Although I’m based in PwC’s Forensic Services practice in Washington, D.C., globetrotting has become a way of life for me.

I believe that international business experience can be a significant enhancement to a CPA’s skill base—and my travel has been personally enjoyable as well. If you’re interested in discovering new places and broadening your career opportunities, here are some things to keep in mind. 

Have your passport ready. When I started with PwC, I was immediately drawn to forensics. After completing some initial assignments in the United States, my Director asked if I had a passport. Since I did (and it was current), he immediately sent me to Dublin to work on a contract compliance engagement. Beginning with that first trip, I learned quickly that by being on the scene, I could establish a personal relationship outside of work with the U.S. or international staff.

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The CGMA Program: Adding the Right Tools to Your Career Basket

GlenneyLucky for me, my career has taken me through several different jobs in manufacturing, and one thing I’ve noticed across the board is that companies are increasingly looking for more diverse skillsets in their management accountants. For CPAs to meet the demand, we have to take a critical look at our own professional development to make sure we foster key talents like strategic thinking, communications, leadership and business partnering. A manager once told me that you have a “career basket,” and you need to fill the basket with the skills that will get you ahead. It’s not always easy to find the resources to develop and hone these skills, but it’s very necessary to getting—and staying—ahead.

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Prince’s $250 Million Mistake

PrinceWith songs like “Purple Rain” and “Little Red Corvette,” Prince wrote the soundtrack of a generation.

However, his failure to write a will could spell trouble for his $250 million fortune. Last week, people around the world mourned the death of this gifted singer and songwriter, and many were shocked to hear that Prince didn’t have a will or an estate plan in place. Even though he was a notoriously hands-on negotiator who meticulously controlled the intellectual property rights of his song collection, this unfortunate lack of planning has left uncertainty for Prince’s heirs. The future inheritance process could cost tens of millions of dollars in legal fees, and state and federal estate taxes. Surprisingly, he’s not the first famous person who left this world without a plan.

Not yet famous with a quarter billion dollar estate to leave loved ones? It’s still important to draft a will and keep it up-to-date based on changing personal and financial situations. Here are a few tips to make sure you have an effective will:

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How to Clean Your Data and Make it Look Slick


HouseEvery day we are inundated with articles, infographics and news reports that quote statistics that we are just supposed to accept at face value. Consider online real estate prices. If you search in your local area, you will find varying figures for median price, price per square foot and return on investment. The volume and variance in data leads to many questions: Who is supplying this information? What types of property does it include? What period does it cover?

As accountants, this unsubstantiated reporting should make us uncomfortable. We are a profession that prides ourselves on transparency and disclosure. When that isn’t forthcoming, our red flags should go up. How can we trust what we are reading when we know nothing about the source and quality of the underlying data? With all the advances in technology, accountants are uniquely positioned to be the champions who set higher standards for reporting. By giving the audience access to the data, we achieve the ultimate transparency. It’s not as hard or expensive as you may think.

I recently challenged myself to create a case study that analyzed real estate sales in my community—Panama City, Fla. Like many other resort areas, our beachfront county experienced wild fluctuations in property prices over the past decade. I was curious about property values, whether they were selling at a gain or loss and if the values used for tax purposes were fair.

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Change: As Necessary as it’s Inevitable

Arleen Thomas Current Photo (2)At a state society member event in El Paso, Texas, an older gentleman told me about his daddy that had passed away 53 years ago, and if he were to come back today, he wouldn’t understand very much about the modern world. He wouldn’t understand the phone he had in his pocket, the computer he used every day, or the car he drove. But, he went on to explain, he would understand that times change and we have to let them.

The profound respect this gentleman had for his father continues to resonate with me as does the lesson his father imparted: Change can be scary and intimidating, but it is necessary — and it’s inevitable.

Consider for a moment what happens if we don’t embrace change. Consider Kodak. It didn’t fail because it did not create a product for the digital age. In fact, Kodak invented the first digital camera in 1975. It failed because it didn’t embrace new technology and adapt to a marketplace with new consumer attitudes.

There are many other examples, of course. The point is flexibility and adaptability are integral to remaining relevant. You need to focus on your market, your surroundings, and what your customers need in order to succeed.

That’s what the AICPA and The Chartered Institute of Management Accountants (CIMA) have done with a proposal to create a new accounting association to represent and advocate for the entire accounting profession, while preserving the member bodies of both organizations. The AICPA Board of Directors, governing Council, Business and Industry Executive Committee and Government Performance and Accountability Committee have all endorsed the proposal and 52 state societies have passed resolutions of support. It also has broad support from finance and firm leaders across the profession. Now they’re asking for you to vote ‘yes.’

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Say “Yes” to Advancing Our Profession


Barry and timFor nearly 129 years, the accounting profession has preserved an esteemed reputation through a commitment to protecting the public interest and upholding the profession’s core values of competence, integrity and objectivity. Each and every day, CPAs live those values through the work they do for their organizations, employers and clients. You now have a new opportunity to further strengthen our profession and play an integral part in its vitality for the future.  

On March 24, the AICPA governing Council voted to proceed with a member ballot on a proposal that would enhance our profession and position us for continued success far into the future. The proposal already has strong support: 52 state CPA societies; leaders from many CPA firms of all sizes; finance leaders from businesses and organizations worldwide; and the AICPA’s Business & Industry Executive Committee, Private Companies Practice Section Executive Committee, Government Performance and Accountability Committee, Women’s Initiatives Executive Committee, Pre-certification Education Executive Committee, and National Accreditation Commission. We urge you to vote “yes” as well.

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Tax Season Wrap Up

End of the roadCongratulations – you have made it through another tax season! 

Take the requisite time to mourn the loss of your time, sleep and missed social events.  Enjoy some much needed rest and relaxation with an activity of your choosing.  Then, if you have not already done so, take the advice of Kool & the Gang and celebrate!

No matter how many years pass, this song always manages to lift me up. So, whether this is your first or 50th tax season, it is an accomplishment and should be celebrated. Embrace the hard work that you have put in and give yourself a pat on the back.

Even as a perpetual optimist, I too fall victim to feeling down when I am exhausted, have hit a roadblock or have experienced a failure. In my many years in tax practice, I often came out of tax season telling myself this was my last. But guess what? By the beginning of the next tax season, I was hyped up and couldn’t wait for those first returns to come in the door.  

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Make Every Day Earth Day and Save Two Kinds of Green

Earth DayWhere I live in Queens, New York, recycling is mandatory. My husband and I keep a plastic sorting bin with two compartments—one for glass and plastic, the other for paper and cardboard—right next to our garbage can to make things easy…and messy, since our almost 20-month-old son thinks that the cardboard recycling is there for his entertainment. But a little mess in our living room is a small price to pay to help the planet. While recycling has become common practice in many parts of the United States, there are so many other things you can do that will help both the earth and your bottom line, and, in some cases, offer a tax break.

Water Conservation

  • Shut off the tap when brushing your teeth. Doing this twice a day saves up to 8 gallons of water.
  • Install low-flow shower heads in bathrooms.
  • If remodeling, consider low-flow toilets. These give the user the option of how much water will be used to flush based on the amount of waste.
  • Don’t buy disposable water bottles. Instead fill reusable water bottles.
  • Be sure sprinkler systems won’t go off when it has rained or during the sunniest times of the day and be mindful of drought conditions.
  • When running water to wash dishes, collect the initial cool water to water houseplants.

Potential cost savings: A family of four that upgrades and optimizes their water usage can save nearly $300 a year in utility bills and 32,000 gallons of water.  For more tips on water conservation and to calculate how much you might save, visit the Environmental Protection Agency website.

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The Growing Importance of Financial Literacy Month

Fin lit 2Every second, America’s trillion dollar student loan debt grows by nearly $3,000. This debt that people begin to carry at an early age often leads to more uninformed financial decisions, such as taking on credit card debt and other loans they can’t afford. Typically, this occurs because of limited access to financial education tools and resources. This alone points to the urgent need for financial literacy in this country.

The AICPA and state CPA societies across the country are leading the effort to address this growing problem through new programs and initiatives. April is Financial Literacy Month, and we continue to be diligent in spreading the important message of financial literacy to millions of Americans. Through the AICPA’s flagship 360 Degrees of Financial Literacy program, the national volunteer effort of CPAs to help all Americans understand their personal finances through every life stage, we have combined grassroots advocacy with free public resources and tools for CPAs to educate Americans of all ages. Additionally, Feed the Pig, the AICPA’s award-winning public service campaign with the Ad Council, has provided 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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Elder Planning: Life’s Transitions After Retirement

Elder planningClients often fantasize about retirement; it becomes a sort of finish line for them. Get to retirement and you’ve made it. What they might not consider are the ways life may change once they’ve retired, and the financial, health care and other planning needs that go into preparing for the future.

Enter the knowledgeable CPA/PFS, who can go beyond retirement planning and assist with elder planning. There is a fine line between retirement planning and elder planning: While all financial planners help ensure their clients have enough savings to last until the end of their lives, elder planning also involves helping clients plan for life’s transitions after retirement.

You’re probably thinking, “Isn’t that the same as retirement planning?” Not really. Elder planning goes beyond financial independence and retirement to touch all areas of financial planning, including investment strategy, health care, estate planning, risk management (insurance) and end-of-life care.

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IRS Form 990 is an Opportunity for Not-for-Profits to Shine


Mission

IRS Form 990 is the information return that is filed annually by most tax-exempt organizations, including charities and fundraising organizations. Just like any other return, it is vitally important to comply with the IRS requirements. What makes Form 990 unique is that it reports extensive information on operations, programs and governance and contains not just financial data, but written narratives and opportunities to provide supplemental information as well. Because Form 990 is available to the public, fundraising organizations that view it as merely another compliance requirement are missing a golden opportunity to shine a light on their organization’s accomplishments and attract support for their causes.

Here are some tips to help you or your clients make the most of Form 990 as a promotional tool:

Be mindful of your audience. With few exceptions, organizations are required by law to make their Form 990 returns available to the public. There are several widely accessible online databases, the largest being GuideStar, from which the public can easily access that information at no cost. Also, many online fundraising platforms, such as CrowdRise, Network for Good and Kimbia to name a few, interface with GuideStar’s database to provide would-be donors access to Form 990 information. When preparing your Form 990, consider who is reading your return: your constituents, including clients, customers and citizens in the communities you serve, and others who put faith in your organization. Also, consider your current and prospective donors. These individuals have the expectation that their participation and contributions of time and money are put to good use. Other groups and individuals who may read your Form 990 include community leaders who influence local policy decisions, other not-for-profits and the media.  

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Jay-Z Learned the Value of a Good "Blueprint"

Jay zWhen New York-based rapper/producer/entrepreneur Jay-Z released his critically-acclaimed The Blueprint in 2001, he cemented his place at the top of the music industry with an album that serves as a model for his music genre and those who came after him.

Much has been written about The Blueprint and its impact on Jay-Z’s career, with critics noting that it was a defining moment. The album became the foundation of a young man’s rise from just another rapper to that of a world-renowned musician, entrepreneur and investor.

Now, I admit that pivoting from Jay-Z to the next version of the CPA Exam might seem like a stretch. But think about the figurative title of The Blueprint and what the album did for future rappers. Now compare that to what the new CPA Exam blueprints (unveiled on April 4) mean to a candidate in their quest to become a CPA. Both serve as a valuable guide and resource.

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Americans Need Financial Literacy More Than Ever

Financial literacy monthAmericans are delaying major life decisions, including buying a home, marriage or retirement in increasing numbers—for financial reasons. According to a recent survey, as many as 51 percent of college students say finances, such as the high cost of student loans, play a major role when making important life choices.

This staggering statistic points to the need to educate and help all Americans make smart financial decisions. As Chair of the AICPA’s National CPA Financial Literacy Commission, I help spread the message about the critical need for financial educational programs. The AICPA, state CPA societies and thousands of CPAs across the country share a common responsibility for leadership and promotion of financial education through the profession’s flagship 360 Degrees of Financial Literacy program and the public service announcement campaign Feed the Pig.

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Starting Here: On the Path to Assuring Sustainability Data


Esg2In terms of intangible accounting, there are no assets or liabilities more ethereal than those related to environmental, social and governance issues. Mother Nature does not send monthly balance sheets. An organization’s diversity and inclusion committee cannot easily sell its access to deeper talent pools on the open market. And yet, gaps in management structures can wreck value beyond any analysis.

As a result, an organization must account for these concepts with hard data to help manage and improve these often overlooked risks and assets. Furthermore, just as it can with an organization’s financial data, regular auditing (or “assurance” as it’s known by the CPA profession when covering subject matter other than financial statements) can strengthen environmental, social and governance data’s accuracy, collection process and reporting.

The environmental, social and governance assurance landscape

In 2014, more than 2,600 reports were produced applying the Global Reporting Initiative framework for sustainability reporting. And while the proportion of assured reports has been slowly growing, less than half of the reports published that year were assured.

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From the Frontlines: Kimberly Ellison-Taylor

Welcome to the AICPA’s series focused on bringing the perspectives of diverse CPAs to life.

Kimberly Ellison-TaylorAttitude. Aptitude. Appearance.

If I had to boil down the topics I focus on when I give advice to women in the workplace, the triple-A approach would be it.

Attitude, because people want to be around engaging, charismatic and nice people. Think about talent shows like “American Idol” or “The Voice.” Raw talent will get you far, but star power draws people in. The corporate world is the same. It is not enough to only be smart. Plenty of people who are smart have trouble growing their carreers and getting promoted. The difference maker? Confidence. Self-esteem. The ability to speak up and also work as part of a team.

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Benchmarking Helps Not-for-Profits Achieve Greater Impact


BenchmarkingWhen I was first introduced to the not-for-profit world, I knew there would be a steep learning curve. I read everything I could find on nonprofit finance, but it wasn’t until I got involved in a networking group of peer organizations that I felt totally at ease in my new role. When a peer recommended that I participate in a benchmarking study, I had no idea what to expect. It turned out that the experience was very valuable. The goal of the project was to explore ways to provide apples-to-apples comparisons and trending reports on key data. The overall lesson was that by comparing operating data and identifying areas where relative performance can be improved, we can make our organizations stronger.

Our group’s first attempt at providing data in a comparable measure was difficult. Fortunately, we had the advantage of meeting face-to-face to explain anomalies in the data and discuss the qualitative aspects behind it. A decade later, our results have been refined for the benefit of everyone in the group and our respective organizations. 

I frequently speak on the topic of benchmarking, and folks ask, “How do you get started?” Often, they do not realize that benchmarking is quite simple. It can typically be performed in six steps:

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In the News: CPAs Say Presidential Election Will Have an Impact on Business Planning

Shutterstock_304155794It’s election season in the U.S. – perhaps you’ve heard?

As we inch closer to the picking our next president, the AICPA recently conducted a survey of CPAs who serve as CEOs, CFOs, controllers and other leadership positions in companies to learn their thoughts on the potential impact of the election on their businesses.

According to the survey, nearly two in three (64 percent) of business leaders said that the election will impact business planning forecasting or budgeting for the next fiscal year. Survey respondents also said that the election ranked fourth in overall impact, behind changes in economic conditions, outlook for their specific industries, and interest rates and borrowing cost.

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4 Cybersecurity Pitfalls to Avoid

HackerYou might break out in a cold sweat at just the thought of criminals on the other side of the world stealing your clients’ or customers’ account information. After all, if some of the largest corporations and agencies of the federal government can’t prevent their systems from being breached, what can a Main Street CPA firm or medium-sized business possibly do against such a threat?

Reality is that as a CPA you can probably do more than you think. At a minimum, as a trusted business adviser, you should help your clients or employer avoid these common pitfalls:

  1. Classifying cybersecurity as an IT issue. Although IT has a support role involving intrusion detection and prevention, cybersecurity involves much more than IT. Today’s hackers increasingly focus their attacks on human rather than technical vulnerabilities. Cybersecurity is an enterprise risk management (ERM) issue. With some specialized training, CPAs are uniquely qualified to systematically assess and report on cybersecurity risks and implement controls to mitigate those risks.

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7 Ways to Make Busy Season More Fun


MassageAlthough it can be a daunting and stressful time, busy season is also an extremely lucrative and productive one for tax practices, one that can be just as rewarding for them as the holidays are for retailers. What may be overlooked, however, is that it can also be a great time to build a sense of camaraderie and team spirit because a shared challenge can bring people together. That’s especially true if you add in some enjoyable activities that help maintain your team’s positive outlook and demonstrate your concern for their well-being.

To find out how CPAs are keeping the season upbeat—and even adding some fun to it—the AICPA recently engaged our social media audience and asked two questions: "How does your firm show appreciation for staff during busy season?” and “You get three wishes: What are the best ways to show staff appreciation during busy season?” We then put together the tips below based on their responses and what we’ve heard from other practitioners.

Be nice. This is the easiest and least expensive stress reliever available, so be sure to make the most of it by expressing appreciation for hard work and complimenting or publicly acknowledging outstanding efforts.

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Revised: CPA Exam Q1/Q2 2016 Score Release Timetables

Due to the 10-day extension of testing windows beginning April 1, a revised Q1/Q2 2016 score release timetable is now available. Score release timelines are updated biannually on AICPA Insights and on the CPA Exam website. For more information about score release and the scoring process, please visit the Psychometrics and Scoring page.

The National Association of State Boards of Accountancy releases the scores to candidates and state boards of accountancy based upon the target score release dates listed in the tables below.

Jan 2016 timetable

**The examination data files the AICPA receives after March 1 will be included in the final target score release date.

Apr 2016 timetable

**The examination data files the AICPA receives after June 11 will be included in the final target score release date.

Keep in mind:

  • All dates and times are based on Eastern Standard Time zone.
  • For the vast majority of candidates, the AICPA receives the examination data files from Prometric within 24 hours after a candidate completes the Exam.
  • The scores for the examination data files received after the AICPA cutoff dates will be in the subsequent scheduled target score release.
  • Some candidates who take the BEC section might receive their scores approximately one week following the target release date due to additional analysis that might be required for the written communication tasks.

We encourage candidates to visit the Psychometrics and Scoring page on the Exams website at www.aicpa.org/cpa-exam for information about score release and the scoring process, including the CPA Exam Score Release Timeline FAQs .

Acting Today for a Strong Profession Tomorrow

Christen_Tim_headshot_Every member of the AICPA plays a role in shaping the accounting profession.

The CPA’s reputation and profession’s success rely upon the actions each and every one of us takes every day. Our collective contributions can be seen in many forms. We collaborate to address the evolving needs of our clients and organizations, and to maintain the relevance of the services we provide. Through peer review, standard setting and other activities, we all contribute to helping firms maintain quality in an increasingly complex environment. And in the corporate environment, we work to embed our core values of quality, competency and integrity to improve management accounting which, in turn, enables stronger audits and financial reporting.

Now, there’s a new opportunity for us to play our part in the profession’s vitality for the future. Last week, the AICPA governing Council voted to proceed with a member ballot on a proposal that would enhance our profession across public and management accounting. Specifically, the Institute will be asking members to support a proposal to create a new association with The Chartered Institute of Management Accountants representing the entire accounting profession, while preserving our respective membership bodies. It will enhance advocacy and expand member resources and education opportunities.

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Appearances are Not Deceiving: Powering CPAs as Premier Tax Service Providers

The way to gain a good reputation is to endeavor to be what you desire to appear.

--Socrates

2013_CPAGiveaway_Thumbnail (2)When I started college at the University of Maryland, I went in as a pre-med major, intending to be a pediatrician.  I wanted something meaningful, and I wanted to make a living, but all the sciences did me in. Luckily for me, my sister had just married a CPA and I spoke to him about becoming an accounting major. The rest is history. I thought, “Maybe it’s not the most glamorous job in the world,” but I had a very positive impression of CPAs and my brother-in-law reinforced that positive impression when I spoke to him.

Fast forward to my role at the AICPA, where a key mission is to position CPAs as the premier providers of tax services. This is not just about appearances – it’s about realities. It is why the AICPA Tax Section is the home for CPA tax professionals seeking the edge they need to achieve success – premier status, if you will – through the tax practice resources and the ethical guidance we provide. We believe “premier’ is defined by the high quality services and uncommon ethical conduct CPAs provide; and the AICPA has to do its part in helping CPAs achieve the reality.

But the appearances part is important too. It’s critical. I know that CPAs are the premier tax service providers, but I want the rest of the world to know it too. And so for a number of years, the AICPA has supported a public-facing communications campaign to position CPAs as the premier service provider. Two years ago, that campaign morphed into a social media push to engage consumers to tell their #CPAPOWERED life moment stories of financial success or goals met thanks to their CPA. Last year, the #CPAPOWERED campaign focused on establishing CPAs as essential to small business success and a strong economy. The campaign helped business owners and entrepreneurs understand how much the advice of a CPA can help them start, grow and thrive.

Part of that campaign showcased CPA expertise and tips through the “CPA Secrets to a Better Business” video series. This year, the push when the consuming public has taxes on its mind began on March 4 and will run during busy season. We will again be using the Tax Tip video series on YouTube and Facebook.

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The Insanity of Inheritance: How to Keep Your Clients Civil and Practical

InheritanceWhen you handle inheritance issues for bereaved clients, stop and put yourself in their shoes. Try to understand their emotions…loneliness, sadness, fear and possibly anger.

As a CPA financial planner, your role is to support your clients throughout their lives, including during the loss of a loved one. When it comes to inheritance, people’s judgment can become clouded. Even if dealing with an inheritance brings out the worst in your clients, you are helping them prepare for a secure retirement. Take a deep dive into their lives and look for an understanding of what they’re going through.

When clients lose a parent, they also lose their security blanket, leading them to cling to possessions that remind them of their loved one, such as a silver set, a gun collection or a folded veteran flag from military service. While these are all reminders of loved ones, lasting security really comes down to financial stability. Consider these three factors:

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Answers to 5 Common Cloud Questions for Not-for-Profits


CloudWith cybersecurity in recent news headlines, more clients are coming to us for advice on accounting software solutions. Cloud systems, especially, have increased in popularity among businesses in the private sector and not-for-profits alike. Organizations with decentralized operations, or with many remote workers that need access to information, can benefit the most from using a cloud system.

Here are the most common questions we encounter in our practices.

Q: What (and where) is the cloud?

A: When we talk about the cloud, it just refers to a system or application that is hosted somewhere outside of your office—usually accessed over the Internet. The term “cloud” comes from the shape used to represent the Internet on network diagrams. 

Some people may also be familiar with the term Software as a Service (SaaS).  The “as a Service” (aaS) suffix also refers to the cloud. There are several flavors of this: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and more keep coming up as additional services are delivered via the cloud.

Another term also often associated with the cloud is “hosted solutions.” This can be software, servers, or even desktop services. Unlike the “as a Service” model, which would be considered “pure” cloud and accessible directly from the Internet in a web browser, hosted solutions usually require a VPN network connection or specially configured client software to access.  However, for most intents and purposes, we can consider hosted solutions as part of the “cloud.”

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Social Security File and Suspend: Important Deadline and Changes

DeadlineUp until now, if a married couple had one spouse at full retirement age (66 or older), file and suspend allowed the other spouse and/or a dependent to enjoy short-and long-term benefits.  But after April 29, 2016, this will no longer be the case. After this date, if a spouse suspends his or her benefits, benefits for everyone involved – including the other spouse or qualifying dependent – will be suspended, too. Thus, a filer must take benefits and abstain from delayed retirement credits for the other person to also receive benefits.

With the file and suspend strategy, a married person – typically the one who makes the most money – can file for his or her own Social Security benefits at age 66 or older, and then immediately suspend those benefits, while their spouse can still file for spousal benefits. As a result, the couple collects an ongoing Social Security check, and, at the same time, the spouse earning the most money sees his or her benefits grow by 8% each year, allowing for a potentially higher benefit for the surviving spouse.

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Why “Extension” is not a Four-Letter Word for Tax Season

Tax extensionsUp until January, I worked in public accounting and remember all too well the feeling when the calendar flipped to March; it seemed like all I was hearing from my individual clients was that they still had not received their 1099s from their brokerage accounts. It seems every year the compression of when these 1099s are received and the deadline to file gets closer and closer. Not to mention the frustration of getting those amended 1099s right after the client’s tax return has been assembled. Talk about adding fuel to the fire!

There are strategies and processes you can implement to encourage your clients to bring in all of their tax return data (with the exception of the late 1099s) so that you will have everything ready to go and can quickly finish the return once the 1099 arrives. However, despite these well intended strategies, the reality is that it feels nearly impossible to move all the returns that have complicated, late arriving 1099s through the entire process before April 18th (or April 19th in the case of residents of Maine or Massachusetts).

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Management Accounting for a Healthy Bottom Line

Natural Food is a Natural Fit for Shan Staka

Shan StakaShan was brought up with respect for healthy food and living that influences him in his role as CFO of Western Foods, a gluten-free facility in Woodland, Calif. The company makes flour from rice and ancient grains like millet, sorghum and amaranth.  In this AICPA Insights profile, we look at what prepared Shan to guide the operations of a growing natural foods enterprise.

Tell me about Western Foods and your role there.
The enterprise started five years ago and grew so fast that we were maximizing our capacity by year three. So we put forth additional resources and equipment to increase the production level, which has led to incredible growth. I am planning, forecasting and implementing financials to get the best use of those investments in Western Foods.

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ACA: Step Away from that Form 1095 ‘Til You Read This

“Never do today what you can as well do tomorrow” – Aaron Burr

Proceed with cautionThis statement, sometimes written in the context of postponing an unpleasant task, was originally expressed by our country’s third vice-president to acknowledge that in certain circumstances, a premature action may be regrettable. Alexander Hamilton would agree.

The same can be said for reporting on the Affordable Care Act: CPAs may regret completing any related forms without first taking some precautions. We are in the business of helping our clients with a full range of accounting and tax needs, so offering services in this space seems to fall neatly into the area of tax compliance. This is a compliance matter, but the nature of the material required to prepare these information returns adds an additional level of complexity. CPAs who aid clients with the completion of these forms need to consider the applicability of privacy rules under the Health Insurance Portability and Accountability Act (HIPAA).

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Advice from a CPA Client - How to Break the News That They Owe

Tax billLet’s just get this out of the way up front: I’m not a CPA. I’m a pictures-and-words kind of guy. Numbers never loved me. They were my bully in school. To this day, the sight of long columns of numbers causes me all manner of gastric discomfort. So when I started my own business and realized there would be bookkeeping involved, naturally I addressed the challenge by running to my CPA.

Now, I have to pause here a moment to say my CPA is the most patient guy in the world. A sample of things he said to me over the years:

“No, Adam, you can’t deduct Warcraft.”

“What do you mean you LOST the checkbook? Don’t you use Quicken? Wait—you DON’T TRACK EXPENSES???”

“No, a 1099. Not a W2. No, that’s a K1—no, not a K9, a K1. Look, just hand me the box of papers and I’ll figure it out. Go home.”

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Update on Taxes and Terrorism: Why Clients’ Data Could Become Vulnerable

Data breachSince this article was initially published in December 2015, the FBI has attempted to compel Apple, Inc. to defeat its own encryption for the purposes of accessing the information on the iPhone of Syed Rizwan Farook, perpetrator of the mass shootings in San Bernardino in December of last year. Apple has thus far refused to obey a federal court order to provide access to the phone, based in part on a first-amendment argument that code-writing constitutes free speech. A federal court in California will hear arguments on March 22, but promises from both the Justice Department and Apple, Inc. to appeal any decision against their respective cases mean the dispute is unlikely to conclude at that time. The case is certain to have far-reaching implications for the nature of digital security both here in the United States and abroad.

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Changes to Lease Accounting Have Been Announced. Are You Ready?


LeasesRegardless of the type of business that you are in, there is a good chance that you have been involved in a lease transaction. Whether you have rented space in an office building or leased vehicles or manufacturing equipment, you have most likely been exposed to lease accounting in one way or another.

While you may not have been required to recognize these leases on your company’s balance sheets in the past,  with the Financial Accounting Standards Board’s new leases standard, the accounting is about to change. In addition, you will want to pay close attention as the new standard applies to all type of entities— including public, private and not-for-profit organizations.

Under the new standard, lessees are required to recognize assets and liabilities arising from all leases, except for agreements that have a lease term of 12 months or less. Generally, lessor accounting will be similar to current GAAP; however, both lessor and lessee disclosures will change.

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6 Ways Women CPAs Can Accelerate Their Careers


WomenMarch is Women’s History Month, a worthwhile time to consider the many contributions that women have made to our country’s progress. In fact, this is also an interesting time in the history of women in the CPA profession. Given the retirement of the large Baby Boomer generation and the fierce competition for talent, it’s clear that the profession is evolving to create more opportunities and to attract and retain a more diverse range of professionals.


And that’s good news for women, because the accounting profession is a great place for us to be right now. The career opportunities for women are endless -- both in public practice and management accounting. How can you take advantage of these opportunities to find the success you’re seeking?


Here are a few tips for making the most of the options I believe are awaiting female CPAs today.

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5 Cybersecurity Precautions for Small CPA Firms

Cybersecurity small firmsWith busy season off to another running start, it’s important to remember that cyber attackers are busy too. With readily monetizable information on hand that can be sold easily on the black market, your practice is an especially attractive target for attackers.

Frequent news reports of breaches at large organizations and government entities might lead you to believe you don’t stand a chance if targeted. Fortunately, this is not the case. The following basic precautions can significantly reduce your risk and mitigate damage if you experience a cybersecurity incident.

  1. Locate, classify and separate information by risk level. The highest risk information for most firms is going to be financial account information such as bank routing and account numbers, credit and debit card numbers, and usernames and passwords for online account access. This information should be protected with a high level of security and stored separately from other client records. Because industry safeguards typically require names of authorized users, billing addresses, employer identification numbers and Social Security numbers to gain access to accounts, a system that stores information used to authenticate account numbers separately from the numbers themselves can mitigate losses should a security breach occur.

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What’s a Hooraycation, and How Can I Go on One?

GalapagosGetting Away from it All After Busy Season: Trips for Any Budget

As busy season finally draws to a close, your senses dulled by long nights staring at a monitor and routing through piles of disorganized receipts, you might understandably be thinking about taking a well-earned break. Recharging your batteries, getting acquainted once again with those people who share your house and enjoying a few days of relaxation mean different things to different people, but in the end it always comes down to budget. Here are three family-friendly vacation types you can plan today, designed for modest, moderate and extreme budgets.

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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.

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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?

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