7 posts categorized "Andrea Millar, CPA/PFS" Feed

Vast Majority of CPAs Manually Calculate Cost Basis

How do you accurately calculate cost basis when purchase information is unknown or when securities have complicated histories? That's a dilemma many CPAs face today when calculating capital gains and losses for their tax clients – and the question we posed to readers in a recent Financial Planning Digest poll. The results of the reader poll show that despite a variety of software options on the market, 91.61% of practitioners continue to manually calculate cost basis by researching history. Only 5.64% of practitioners said that they use cost basis software and the remaining 2.76% said that they don't run into issues where client cost basis information is missing or inaccurate. 


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New College Planning Opportunities for Upper Income Clients

College financial aidFinancing the cost of college is a significant issue for families and for recent graduates saddled with huge student loans. The total amount of outstanding student loans—around $870 billion, according to the Federal Reserve Bank of New York—is greater than the total level of outstanding credit card or auto loan debt. It is also growing, while the size of other consumer debt is shrinking or remaining the same. However, practitioners may not be aware that, in a surprising new wrinkle, more upper-middle-class families are now turning to student loans to help finance college costs. In fact, the greatest expansion in the percentage of student loan debt was among families with annual incomes between $94,535 and $205,335, according to a Wall Street Journal analysis of recent Federal data. A total of 25.6% of them had student loan debt in 2010, up from 19.5% in 2007. The average amount they borrowed jumped to $32,869 from $26,639 in 2007, after adjusting for inflation.

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From Tax Preparer to Financial Planner

Financial planning consultation

Congratulations on making it through another tax season! As you helped your clients prepare their tax returns, did you ask yourself any of these questions?

  • Who, if anyone, is looking at their overall financial picture?
  • What can I do to help remove financial obstacles so they can accomplish their goals?
  • Can I offer financial knowledge, analysis and a framework to make this person’s dreams a reality?

From those long hours, including rigorous reviews and meetings with clients, you’ve gained unique insight into their lives – insight into their incomes, spending habits, investments and life events. While reviewing those 1040s, you are able to envision potential tax impacts of financial decisions and begin considering tax planning opportunities for your clients. This is a great first step in helping them meet their overall financial planning needs, including making estate, retirement, tax, investment and insurance planning decisions to move them toward meeting their long term goals.

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In the News: Optimism on U.S. Economy hits Post-Recession High

CPA Outlook Index

The Wall Street Journal’s CFO Report covered yesterday’s release of the AICPA’s Economic Outlook Survey results, noting that 14 percent of those surveyed plan to hire this quarter – up from 10 percent in Q4. The AICPA Economic Outlook Survey polls chief financial officers, controllers and other CPAs in executive and senior management roles about their thoughts involving the economy and their hiring plans in the next year. The Triangle Business Journal cited the rise of the CPA Outlook Index,  a composite of nine indicators, which measured a 69, a post-recession high (see the chart to the left) that matches the index score from the first quarter a year ago. The Raleigh News & Observer, noted that the CPA respondents’ views are seen as a leading economic indicator because they oversee corporate finances and help devise strategy. Carol Scott, CPA, CGMA, AICPA vice president for business, industry and government, was quoted by WRAL.com in their article on the survey. Scott said "optimists now outnumber pessimists on the U.S. economy by an almost 2-to-1 margin, which is a striking change from six months ago." The results of the survey will be discussed on a webcast 2012 Economy: Real Recovery or Roller Coaster Ride?, scheduled from 2:00 to 3:30 p.m. ET on March 22. The webcast has free CPE for the first 2,000 AICPA Members who register.

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In the News: Clients Increasingly Turn to CPAs for Financial Planning

Financial planning consultation

While economic uncertainty persists and conflicting economic indicators make predicting the progress of the recovery tough, stocks have been on the rise since late 2011. With the Dow crossing the 13,000 threshold earlier this week, many investors may be considering a return to the market. Before making any important financial decision, it’s essential to develop a plan that addresses the specific situation and ensures alignment with one’s goals for the future. As a number of recent news articles below demonstrate, individuals are increasingly turning to their CPA for help making investment decisions and planning their financial future, and the AICPA is ensuring that CPAs have the tools they need to best advise their clients.

Investment News reports that, as a result of increased demand from their clients, more CPAs than ever before are offering financial planning services. CPAs, who are trusted advisors to their clients, may have an advantage on other investment professionals. “We're in a natural position of trust with clients to expand into financial planning,” said Lyle Benson, CPA/PFS, of the executive committee of the AICPA's Personal Financial Planning section. The economic conditions in the U.S. have only added to the perception that CPAs are one of the best options for financial planning, and the AICPA is ensuring that members who wish to expand their financial planning services have the resources they need. “With the uncertain times, our members are seeing a lot more demand from clients for financial planning services,” said Andrea Millar, CPA/PFS, senior technical manager of the AICPA’s Personal Financial Planning section. “In recent years, we've expanded our efforts to help them add that to their practices.”

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Tax Time is the Right Time for Financial Planning

If you’re like any of the CPAs I know, you’re probably fishing receipts from shoeboxes right about now, brewing coffee like it’s a second job and greeting the sun most days from your office chair.

It is, after all, that most taxing of seasons: tax season.

But in those long hours and rigorous reviews you’re also getting fresh insight into the lives of your clients – insight into their incomes, spending habits, investments and life events. That’s why tax season is a great gateway to financial planning. And why CPAs are uniquely positioned to excel as financial planners.

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CPAs to the Rescue

 As Hurricane Irene spun her way up the East Coast, the spotlight brightened on disaster planning.

And on CPAs.

CPAs have long been leaders on emergency preparation. Members of the AICPA’s Personal Financial Planning section a few years ago partnered with the American Red Cross and the National Endowment for Financial Education to produce guides to help consumers prepare for and recover from disasters. You can see the expertise included in these guides and the insight of our members on display throughout the media when natural disasters occur.

In the aftermath of Hurricane Irene, for instance, CPA financial planners Michael Eisenberg and Mitchell Freedman were quoted in this Wall Street Journal story: Insurance, Records Are Key In Storm's Wake.  Eric Rigby, a CPA financial planner in New Orleans, was interviewed live on the Weather Channel about disaster preparation.

The PCPS Section today is hosting a webinar, “Disaster Losses: From Start to Finish,” to empower AICPA members with information to help clients during a disaster. Louisiana practitioner Jerry Schreiber, who has presented numerous seminars on disaster loss, will cover topics including:

  • The emotional toll on clients
  • Accumulating the information to document a loss
  • Reporting the loss on the tax return.

The free webinar will take place from 2:00 p.m. to 3:30 p.m. EDT today. Be sure to register and reserve your space.

Be sure to check out other disaster planning and recovery resources available from the AICPA, including the guides and checklists from 360 Degrees of Financial Literacy. It is powerful information that you can use with clients or in your communities to demonstrate the value that CPAs deliver every day.

Andrea Millar, CPA/PFS, Sr Technical Manager - PFP, American Institute of CPAs. Andrea leads the AICPA Personal Financial Division. Her responsibilities include working with the PFP Executive and PFS Credential committees to drive the advocacy, education and other initiatives on behalf of the 7,500 AICPA members who specialize in providing estate, retirement, tax, investment and insurance advice to their individual clients.


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