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Jun 01
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Rushing Baby Formula supplies, Helping Ukraine and Punishing Russia

By Blog, Congress at Work

To amend the Child Nutrition Act of 1966 to establish waiver authority to address certain emergencies, disasters and supply chain disruptions, and for other purposes. (HR 7791) – In response to the recent nationwide shortage of infant formula, Congress passed a bill authorizing $28 million to fund emergency supplies and to address the potential for future shortages due to emergencies, disasters or supply chain disruptions. The bill was introduced by Rep. Jahana Hayes (D-CT) on May 17. It passed in the House on May 18 and unanimously in the Senate on May 19. It is currently awaiting signature by the president.

Ukraine Democracy Defense Lend-Lease Act of 2022 (S 3522) – This legislation was introduced on Jan. 19, by Rep. John Cornyn (T-TX). It passed in the Senate on April 6, the House on April 28, and was signed into law by President Biden on May 9. The bill waives certain requirements that constrain the president’s authority to lend or lease defense articles intended for Ukraine’s government or other Eastern European countries affected by Russia’s war. For example, prohibiting a loan or lease period of more than five years. Furthermore, the president must establish procedures to ensure quick delivery of defense articles loaned or leased to Ukraine. The provisions of this bill are scheduled to terminate at the end of FY 2023.

Additional Ukraine Supplemental Appropriations Act, 2022 (HR 7691) – Introduced by Rep. Rosa DeLauro on May 10, this bill authorizes $40.1 billion in emergency funding for U.S. agencies to aid Ukraine’s response to Russia’s invasion. The funding is available only through fiscal year 2022 (which ends Sept. 30). The appropriations are designed to provide defense equipment, migration and refugee assistance, support for nuclear power issues, emergency food assistance, economic assistance, and property seizures related to the invasion. U.S. agency recipients include the Department of Justice, the Department of Defense, the Nuclear Regulatory Commission, the Department of Health and Human Services, the Department of State, the U.S. Agency for International Development, the Department of Agriculture and the Treasury Department. The bill passed in the House and Senate on May 19 and awaits the president’s signature.

Ukraine Comprehensive Debt Payment Relief Act of 2022 (HR 7081) – This bill is designed to advocate debt assistance for Ukraine among domestic and international financial institutions. Specifically, the legislation calls for an immediate suspension of Ukraine’s debt service payments to respective institutions, offering concessional financial assistance to Ukraine, and providing economic support to both refugees from Ukraine and to the countries receiving them. The bill was introduced by Rep. Jesus Garcia (D-IL) on March 17. It passed in the House on May 11 and is under review in the Senate.

Russia and Belarus SDR Exchange Prohibition Act of 2022 (HR 6899) – The purpose of this legislation is to prevent financial assistance to Russia or Belarus. Specifically, it prohibits the U.S. Treasury Department from making transactions that involve the exchange of Special Drawing Rights held by the Russian Federation or Belarus. Special Drawing Rights (SDR) are reserve assets contributed by member countries and maintained by the International Monetary Fund (IMF). The act was introduced by Rep. French Hill (R-AK) on March 2. It passed in the House on May 11 and is in the Senate.

Isolate Russian Government Officials Act of 2022 (HR 6891) – Introduced by Rep. Ann Wagner (R-MO) on March 2, this bill is designed to exclude Russian government officials from certain international meetings, such as the Group of 20, the Basel Committee for Banking Standards, and the Bank for International Settlements. The bill’s mandate is scheduled to end either within five years, or 30 days after the president has reported (to Congress) the end of the Russian-Ukraine war. The act passed in the House on May 11; it currently resides in the Senate.

Asset Seizure for Ukraine Reconstruction Act (HR 6930) – This bill would authorize a task force to identify legal actions that can be used to confiscate the assets of foreign individuals affiliated with Russia’s political leadership. The work group also is directed to report (to Congress) its recommendations for more energy-related sanctions on Russia’s government, as well as any additional authority the president can use to seize assets. The act was introduced by Rep. Tom Malinowski (D-NJ) on March 3. It passed in the House on April 27 and is under consideration in the Senate.

May 01
Love0

Secure 2.0 Retirement Bill

By Blog, Tax and Financial News

At the very end of March, the House of Representatives passed a version of the bill known as Secure 2.0. The bill passed the House with overwhelming bipartisan support in a 414-5 vote. The House version still needs to pass in the Senate, where there are differing ideas on exactly what the bill should contain. There is strong support, so it is less of a question of if Secure 2.0 will become law than what exact version.

The Secure 2.0 bill in any version aims to help Americans save for retirement through a variety of mechanisms and changes in tax law. Here are some highlights of what the bill hopes to accomplish and how. We’ll also note differences between the House and Senate plans throughout.

Sign Up More Workers for Retirement Plans

One way the House version of the bill aims to help people save for retirement is to simply get them into a plan. The law would automatically enroll workers in 401(k), 403(b) and SIMPLE IRA retirement plans in their workplace; however, they can opt out. It’s been shown that most people simply won’t take action, meaning they won’t enroll if they have to proactively sign up –  and similarly won’t opt out. The Senate version does not require auto enrollment, but it does give companies incentives to structure plans so that they auto enroll workers.

Auto enrollment in the House version starts at three percent contributions and increases yearly until participants are contributing 10 percent of their pay. Business with 10 or fewer employees are exempt.

Encourage Small Employers

Workplace retirement plans come with administrative, financial and legal burdens just to set up and offer the plan. This is before any type of employer contributions and is often a roadblock to small employers offering plans to their employees. To help encourage small employers, the bill offers a retirement plan start-up tax credit of 100 percent for the first three years to cover these costs.

Bigger Catch-Up Contributions

Right now, 401(k) plan catch-up contributions for workers 50 and older are capped at $6,500 for 401(k) plans. Both the House and Senate versions offer to increase these amounts, but in different ways.

The House version increases 401(k) catch-up contributions up to $10,000 for those 62, 63 or 64 starting in 2024. A more generous version is offered by the Senate, allowing the same $10,000 limit but to all who are 60 or older.

There is a “catch” to the catch-up, however. Under both versions, all catch-up contributions to 401(k) plans will be treated as Roth contributions; i.e., after tax contributions beginning in 2023. Currently, workers can make the contributions on either a pre-tax or post-tax (Roth) basis.

Push-Out Mandatory Required Distributions

The House version would extend the age for taking required minimum distributions (RMD) from retirements plans from 72 up to 75, incrementally over 3 years (73 in 2023, 74 in 2030 and 75 in 2033).

The Senate plan raises the age to 75 by 2032 and also waives RMDs entirely for those with less than $100,000 in aggregate retirement savings. It also reduces the penalty for not taking RMDs down to 25 percent (currently 50 percent).

Expand Employer Matching

The way the vast majority of retirement plans work is that employees contribute a portion of their salary and then the employer contributes a matching amount of  50 percent or 100 percent of what employee saves (up to a limit). The Secure 2.0 bill proposes to make student loan payments qualify as deferrals the same as plan contributions. This means that if you make student loan payments, your employer can now make a matching contribution to your retirement plan account even though you are not actually making any contributions into the plan itself. This is not a requirement, but an option for employers.

Create a Lost and Found for Retirement Plans

It’s common for workers to lose track of retirement plans from previous jobs when they move and change jobs. The bill would create a national lost and found to aid people in locating plans they may have inadvertently left behind or forgotten about.

Conclusion

In whatever form the final bill takes shape, it will give Americans more options to save for retirement and expand access to workplace plans.

May 01
Love0

Combating Employee Hesitancy to Return to the Office

By Blog, General Business News

According to the January 2022 Future Forum Pulse survey, there’s been a shift in what workers want post-pandemic. The report found that in Q4 of 2021, 78 percent of workers from six industrialized companies wanted location flexibility. The survey also found that 95 percent desired schedule flexibility. This is in light of the same survey finding that 72 percent of employees desire greater flexibility from their current places of employment. Those same workers reported that if they can’t find more flexible arrangements, they would seek out another employer that provides greater flexibility – compared to 57 percent expressing the same desire in Q3 of 2021.

According to a December 2017 Gallup report titled, “Thinking Flexibly About Flexible Work Arrangements,” along with helping develop and keep high-performing workers, creating and improving a flexible workplace also intensifies the tie workers have to their employer, as well as reducing employer expenses. While lowering costs is always attractive, it’s important to understand that not every role or type of business will have the same implementation opportunities.

When businesses formulate their flexible working arrangement, employers and employees must be on the same page, have clear expectations, and a way to measure that work is being completed in a manner similar to that in office. One important consideration is ensuring that remote employees are treated with the same consideration for potential promotions, projects, etc. Do managers and senior executives maintain the same level of treatment of employees whether someone comes into the office or works remotely and at different hours?

As for jobs that cannot be performed remotely, flexibility may not be very realistic. However, businesses can offer employees compensatory approaches to flexibility. Examples include a relaxed dress code and the ability, within reason, to choose lunch and break times. Employers also may offer the option for both an open floor plan and traditional office space to provide variety that leads to creativity and innovation.

Additionally, employers can create digital spaces where in-person workers can communicate with co-workers to discuss covering and switching shifts in their work schedules, helping them attend to their personal lives better and foster camaraderie. Businesses also can gamify employees covering each other shifts; for example, by offering a reward system if they take on extra shifts.

Permitting workers to select their preferred variety of tasks gives employees an awareness of freedom and can increase capabilities. By switching tasks within a pre-determined time frame or permitting employees to work at different offices or sites, employers can similarly provide a flexible working arrangement. This lets employees take on new responsibilities, workplace flows, and engage with different co-workers.

 Variations on Flexible Working Arrangements

Another option is to work around employees’ personal circumstances. It could be a school system holding classes every other month or a mixed schedule. It also could take the shape of a four-day work week, whereby employees work 10 hours a day. This could similarly benefit families with children, parents, etc. that have medical or other special needs that can be addressed efficiently by a shorter but equally productive work week.

Splitting a Position

Having two (or more) employees perform duties of one full-time worker is called job sharing. This happens via employees performing a part-time schedule, combining to create a single full-time position. It’s able to satisfy the role of a full-time job while meeting the needs of workers looking for part-time work.

Legal Considerations

One consideration for employers to maintain compliance with the Fair Labor Standards Act (FLSA) for non-exempt employees with flexible work arrangements is to strictly monitor hours worked. According to the FLSA, non-exempt employees must receive 1.5 times standard wages when they work beyond 40 hours within any continuous seven-day work week. Ensuring that workplace guidelines are crafted and implemented equally, as well as documenting the implementation, is one way to reduce the risk of discrimination claims.

While providing flexible working arrangements is unique to every business, offering it can provide many benefits, especially the potential to attract and retain high-performing staff.

Sources

Pulse survey

https://www.gallup.com/workplace/236183/thinking-flexibly-flexible-work-arrangements.aspx

https://www.dol.gov/agencies/whd/flsa

May 01
Love0

How Will the Federal Reserve React to Increasing Inflation?

By Blog, Stock Market News

The Bureau of Labor Statistic’s Consumer Price Index rose by 8.5 percent year-over-year ending March 2022, leading most economists to agree that inflation is going to be with us for a while. With inflation seeming not to abate, at least in the near term, how will different types of investments react to inflation that is sustained and unknown when it will peak and begin to drop. Looking at a 2004 study from the Federal Reserve, an unexpected 25-basis point rate cut can be expected to see equities appreciate by one percent.

Defining Different Rates

The Federal Open Market Committee (FOMC) sets the federal funds rate – the overnight rate at which banks borrow from each other. This undoubtedly will impact the economy and the domestic and global stock markets. While it can take months, if not more than a year, for a change in interest rates to have a universal impact, the stock markets see the impact sooner. This is opposed to the discount rate, which is the interest rate banks are charged when loans come from regional Federal Reserve Banks – the so called discount window.

One main reason the Fed adjusts the federal funds rate is to shape inflation. When the federal funds rate is raised, it is trying to reduce the money supply available for consumers and businesses. With less money available to circulate throughout the economy, it costs more to borrow money as interest rates rise.

Another important reason to keep an eye on the federal funds rate is due to the fact that the prime interest rate is based largely on the federal funds rate. Whether a mortgage, credit card or other personal or commercial loan, the prime interest rate is an influential factor in these lending vehicles’ interest rates. As the Fed Board of Governors explains, the prime rate is how each individual bank determines its own interest rates. Their unique prime rate is based on the target level of the federal funds rate, which is how much other banks charge them for short-term loans. Once the prime rate is established, it is used as a reference base rate for a multitude of lending products, including personal and commercial loans and credit card lines.

FOMC and Federal Funds Rate Adjustments

As the Federal Reserve increases its discount rate, short-term borrowing costs for financial institutions increase. Financial institutions in-turn are pushed to increase borrowing costs for companies and consumers. Whether it is a credit card or a mortgage, rates increase. The higher the interest rate, the less spending ability the account holder has. The account holder also sees higher bills via the higher interest rates. The higher the bills, the less money they can spend elsewhere, often impacting the economy.

Rising Rates and the Markets

Publicly traded companies can suffer in different ways. A company may bring in less revenue or have higher borrowing costs, cutting into its growth forecast or reducing its profits. Companies also may see lower growth expectations and a decline in future cash flow projections. Assuming no other changes, the stock price will likely fall. Depending on how severe the increase in interest rates, this can impact entire sectors – and depending on how much weight a particular company comprises within an index, an entire index.

Bond Market Dynamics and Interest Rate Fluctuations

Compared to corporate bonds, where bondholders are first in line to be paid if a company goes bankrupt, government securities, such as Treasury bills and bonds, are viewed as more likely to pay their investors back even in more challenging financial circumstances. This is because, according to the U.S. Securities and Exchange Commission, they are backed by the full faith and credit of the U.S. government.

As the Financial Industry Regulatory Authority (FINRA) gives an example, interest rates have a noticeable impact on bonds. Say a bond is sold for X and matures in Y years down the road with a Z percent coupon at par value. Twelve months later, interest rates have risen and another of the same type and amount of bond is issued at the same par value but is issued with a one or two percent higher coupon rate. Based on these two different bonds’ characteristics, the original bond is less attractive on the open market. If the original bondholder wants to sell a bond issued a year ago, he will have to sell for less than face value due to the more attractive interest rate of the newly issued bond.

While there is much uncertainty in the financial markets, including the FOMC and the bond and equity markets, understanding how past market moves have occurred can offer guidance to how increasing interest rate environments may evolve in this rate-tightening environment.

May 01
Love0

New Required Minimum Distribution Rules for 2022

By Blog, Financial Planning

Starting in 2020, new legislation increased the age to begin Required Minimum Distributions (RMDs) from 70½ to 72. More recently, the IRS updated the Uniform Life Table for alignment with longer life expectancies. Note that it takes years for actuaries to work up new data for this table, and the recent changes do not reflect the downturn in life expectancies resulting from the pandemic. These updates were established pre-pandemic and scheduled to take effect in 2022.

The good news is that retirees who prefer not to withdraw from their retirement portfolios now have a couple more years of growth opportunity before they are forced to take distributions.

Because retirement portfolios fluctuate based on market performance, and your life expectancy changes with each year you continue to live, your RMD amount also changes each year. To calculate your annual RMD, you need your retirement plan’s previous year-end account balance and the most updated Uniform Life Table. To determine the correct amount, divide the year-end value by the estimated remaining years of your lifetime, based on your age on Dec. 31. This is the formula: Account balance ÷ Life expectancy factor = RMD.

The new Uniform Life Table is updated with a longer average life expectancy than the prior table, so the divisors have increased. This means that the amount required to be withdrawn is now reduced from what would have been required under the previous table.

The following are some guidelines to keep in mind when calculating, withdrawing and managing your required minimum distributions.

  • Once you reach age 72, you have until March 31 of the following year to take your first RMD. After that, RMDs must be withdrawn before Dec. 31.
  • An annual RMD may be taken as a lump sum, on as-needed basis or as regularly scheduled payouts.
  • Consider that if you delay taking the distribution until the end of the year, your portfolio has more time to grow tax-deferred before you reduce the balance.
  • As long as you don’t own more than 5 percent of the company you work for, you may delay taking RMDs from the retirement plan sponsored by your current employer as long as you continue working and contributing to the account. RMDs are not compulsory from that account until you stop working.
  • If you have multiple IRAs, including SEP and SIMPLE IRAs, you can withdraw the combined RMD amount from just one account (or any combination thereof).
  • If you have multiple 403(b) accounts, you can withdraw the combined RMD amount from just one account (or any combination thereof).
  • However, if you have multiple 401(k) accounts, you must withdraw RMDs from each account starting at age 72.
  • Married couples may not combine their RMDs and withdraw them from one account.
  • RMDs from an inherited IRA also may not be aggregated unless they were inherited from the same decedent.
  • You do not have to take an RMD from a Roth IRA because the original contributions were already taxed.
  • In the year you first quality for an RMD, it may not be a good to wait until March 31 of the following year to take it because you’ll have to take your second RMD by Dec. 31 of that same year. Two RMDs in one year could yield a substantially higher tax bill.
May 01
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How to Save When You’re Broke

By Blog, Tip of the Month

If you think saving money is a waste of time, think again. It all comes down to having the right mindset and strategy – even if you don’t have a penny to spare. Here are some ground rules that have proven effective for many. All you have to do is be willing to dive in, change your choices, and revisit the way you approach your finances.

Create a budget and track your expenses. Yes, you’ve probably heard this a million times and you might be thinking: how can I save money if I don’t have any? Here’s what you do. For the next 30 days, try this experiment: track every dollar that’s coming in and going out. Here are things to consider:

  • Except for the basics, where did you spend?
  • Were there items that were wants instead of needs that you might cut?
  • Did you buy name brands or lower-cost options?
  • How can you reduce your spending by 5 percent or 10 percent?

After you’ve digested all this, you’ll have a better picture of what’s going on. A good next step is to consider the zero-sum budget. This method gives every dollar a job and keeps money from slipping through the cracks. Yes, this is pretty micro – but it works.

Grow your income. This might sound like a beat-down since you’re already burning the midnight oil, but remember that this is temporary and a means to an end. If you have an extra room, you might think of renting it out for a few months. If this is outside your comfort zone, find a side hustle that’s fun like dog walking or pet sitting. Or think about jobs you can do on your computer like answering paid surveys. Part-time weekend jobs also are an option. Greeters at Costco make around $24 an hour!

Automate your savings. Again, you’ve heard this, but taking this money off the top before you even see it is key. You never see the money so you don’t ever miss it. And any amount saved can add up over time. Even $5 a paycheck can make a difference.

Have no-spend days. Of course, you have necessary expenses like food and shelter. But what about those days when you don’t want to cook and grab some drive-through grub? Or you see a Starbucks, your car turns around and suddenly, you’re there ordering a Double Mocha Frappuccino? Certainly, we all want – and need – treats every now and then. But be judicious about them because if you’re already broke, these spontaneous splurges can derail your savings dreams.

Sell things you no longer need. Start by cleaning out your closets and your garage. You’ll most likely find things you no longer have any use for, or want. Host a yard sale. Or even better, snap pics of your items and put them up on Facebook Marketplace, eBay, Craigslist or Nextdoor. For more pricey things like clothes or jewelry, try Thred Up or Poshmark. You’ll be surprised how quickly this all adds up. Then put this money toward your savings or your debt. Slow and steady always wins the race.

Write down your 10-year lookahead. How do you want to be living a decade from now? On the beach? In a townhouse in a European city? Completely out of debt? All of your dreams, no matter how crazy, can absolutely be achieved. All you have to do is take the long view. Have tunnel vision about your destiny. What this all comes down to is daily financial decisions.

So now that you have a few ways to get ahead, it all comes down to you. Take a deep breath and be intentional – embrace this new way of living. When you see yourself making new choices and realizing what you can achieve by tweaking how you spend, there’s no stopping you.

Sources

How To Save Money When You’re Broke: 15 Smart Strategies

May 01
Love0

Why Businesses Should Be Worried About Mobile Security and How to Keep Safe

By Blog, What's New in Technology

Cybersecurity has become more important than ever, especially with the rise in cyberattacks. However, much focus is put on computers, laptops, servers, etc. Mobile phones and tablets seem to be overlooked when talking about cybersecurity.

Today smartphones are integrated into the modern workforce as driven by work at home and remote working. To enhance mobility, these devices are installed with business mobile applications that enable access to company systems. They enable users to conduct different activities on-the-go, such as banking, connecting to company networks, business transactions, and other social operations. However, this is raising concerns about the security of sensitive corporate data and other personal information stored on phones.

Despite these concerns, businesses continue to be lax on enforcing solid measures to protect company data and networks.

Since the phones have less protection than computers, they have become an easy target for cybercriminals who are using different methods to gain access to phones.

Security Threats to Mobile Devices

Phishing is one common attack vector that uses fake emails and text messages to trick users into clicking links that download malware onto a user’s smartphone. For instance, cybercriminals may use SMS to mimic legitimate companies and send messages that contain harmful links.

Recently, cybersecurity researchers cited a WhatsApp phishing campaign that attempts to lead WhatsApp users to install an information-stealing malware. The senders impersonate the WhatsApp notification service and send an email to a user claiming they have received a private voicemail. A user who is unaware of this ploy and clicks on the play button in the email will download malware onto their phone.

Attackers also take advantage of data leakage through malicious mobile apps. Users can get these apps by downloading fake versions of real apps, which are infected with malicious code that steals personal data stored on a phone.

Data can be stolen through legitimate solutions, as researchers found at the end of October 2021, when they discovered a banking trojan horse known as SharkBot in six phoneapps. These apps were designed as legitimate antivirus solutions. The malware could bypass multifactor authentication to steal credentials and banking information, and even transfer money. Although the six dangerous apps have since been deleted from the Google Play store, this goes to show that hackers do not tire of looking for ways to infiltrate mobile devices.

Mobile phones also are affected by web-based mobile security threats when users access affected sites that download malicious content onto a device.

Other security threats to phones include using unsecured public WiFi, lost or stolen mobile devices, mobile spyware, rooting malware and jailbroken phones that become more prone to attacks.

How to Keep Safe

Since phones are now primarily being used as business tools, business owners need to rethink their mobile strategies for both employer-provided devices and bring your own device (BYOD).

Businesses that deploy mobile device management (MDM) tools will block potentially harmful apps, automatically update software, and remotely wipe off data on stolen or lost phones.

Users are the weakest link in security issues; hence, a need for regular security risk-training on social engineering by learning how to differentiate suspicious emails and SMS messages. Users also need to learn to avoid downloading applications from third parties and other untrusted sources and use only authorized app stores. Furthermore, user training should include the dangers of public Wi-Fi, the importance of turning off a phone’s Wi-Fi when not using it, and locking the device with a strong password or biometrics, such as fingerprint detection.

Users also should avoid granting broad app permissions, especially for free apps that may be sending sensitive data to remote servers, where it can be used not only by advertisers but also by cybercriminals.

Keeping device operating systems and other software updated will reduce attack possibilities since cybercriminals use old bugs to hack devices.

It is important to install anti-malware and anti-virus programs on mobile devices since they now face the same threats as computers and laptops.

Businesses can introduce a mobile device policy that employees sign before accessing company resources on their devices or when receiving employer-provided devices. Such a policy includes the dos and don’ts of using phones.

Regular security testing is crucial for enterprise applications as it helps expose vulnerabilities in apps and especially those developed by third-party agencies to ensure the security meets required compliance guidelines.

Conclusion

Mobile phones now have capabilities similar to computers and store a lot of personal and sensitive data. As more devices access business systems, it creates more endpoints that put the business at risk of a data breach. Therefore, businesses of all sizes should take mobile security seriously through strong defensive measures, which can be enhanced with enterprise mobile security solutions.

May 01
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Restricting Trade Relations with Russia, Enhancing U.S. Export Pathways, and Bearing Down on Cybercrime and Human Trafficking

By Blog, Congress at Work

Suspending Normal Trade Relations with Russia and Belarus Act (HR 7108) – This legislation suspends normal trade relations with Russia and Belarus. The president may restore normal trade relations pending Congressional approval, and this authority is scheduled to end on the last day of 2023. The bill also permanently authorizes the president to impose visa- and property-blocking sanctions based on violations of human rights, as well as increase duty rates on products from these countries. These actions are designed to condemn Russia’s invasion of Ukraine by urging other World Trade Organization (WTO) members to suspend trade concessions to Russia and Belarus, and consider steps to suspend Russia’s participation in the WTO. The bill was introduced on March 17 by Rep. Richard Neal (D-MA). It passed in the House on the same day, passed in the Senate on April 7, and was signed into law by President Biden on March 17.

Modernizing Access to Our Public Land Act (HR 3113) – This bill was introduced by Rep. Blake Moore (R-UT) on May 11, 2021. It requires the Dept. of the Interior, the Forest Service, and the Corps of Engineers to digitize geographic information system mapping data relating to public access to Federal land and waters for outdoor recreation. This information, which must be made publicly available, will include status as to whether roads and trails are open or closed; the dates on which roads and trails are seasonally opened and closed; the types of vehicles allowed on each segment of roads and trails; the boundaries of areas where hunting or recreational shooting is regulated or closed; and the boundaries of any portion of a body of water that is closed to entry, watercraft or has horsepower limitations for watercraft. The bill passed in the House on March 15, the Senate on April 6, and is awaiting signature by the president.

Better Cybercrime Metrics Act (S 2629) – This bill authorizes various requirements to improve the collection of data related to cybercrime. For example, the Department of Justice must collect cybercrime reports from federal, state and local officials; include questions about cybercrime in the annual National Crime Victimization Survey; and evaluate current cybercrime data collection and reporting systems. The bill was introduced by Sen. Brian Schatz (D-HI) on Aug. 5, 2021. It passed in the Senate on Dec. 7, 2021, the House on March 29, and is awaiting the president’s signature to become law.

Bankruptcy Threshold Adjustment and Technical Corrections Act (S 3823) – The primary purpose of this legislation is to modify the eligibility requirements for a debtor to file for bankruptcy under Chapter 13. Specifically, only an individual (or an individual’s spouse, except a stockbroker or a commodity broker) with regular income that owes aggregated debt of less than $2,750,000 may file as a debtor under Chapter 13. The bill was introduced by Sen. Chuck Grassley (R-IA) on March 14 and passed in the Senate on April 7. It is currently under consideration in the House.

Countering Human Trafficking Act of 2021 (S 2991) – This bill authorizes the establishment of a Department of Homeland Security Center for Countering Human Trafficking. The goal is to address human trafficking with a victim-centered approach to increase the focus on and effectiveness of investigating and prosecuting forced labor cases. Specifically, the legislation centers on eradicating forced labor from both corporate and government agency supply chain contracts and procurement. The act was introduced by Sen. Gary Peters (D-MI) on Oct. 18, 2021. It passed in the Senate on April 16 and is under consideration in the House.

Ocean Shipping Reform Act of 2022 (S 3580) – This bipartisan act was introduced by Sen. Amy Klobuchar (D-MN) on Feb. 3. The bill increases the authority of the Federal Maritime Commission (FMC) to investigate late fees charged by common ocean carriers and otherwise find ways to promote the growth of U.S. exports through a more effective and economical ocean transportation system. For example, the bill prohibits common ocean carriers, marine terminal operators, and ocean transportation intermediaries from unreasonably refusing cargo space when available. This legislation passed in the Senate on March 31 and is under consideration in the House.

Apr 01
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What Every Taxpayer Needs to Know This Season

By Blog, Tax and Financial News

The IRS is currently suffering a severe backlog in processing returns from 2021 for the 2020 tax year. As of Dec. 31, there were still more than 6 million unprocessed individual returns with notices and pending refunds. There are a few things every taxpayer should know that can help them navigate any delays in filing or speeding up the process to make filing this year as smooth as possible.

Pass on the Paper

Nothing speeds up the process like electronic filing. Despite the uptick in electronic filing over recent years, the agency is still buried in paper, receiving almost 17 million paper filings last year.

When filing electronically, there’s a good chance you’ll see your refund within 21 days of acceptance. Just make sure you keep track of your submission and that it is accepted and not bounced back.

Validate Your Return Properly

To file electronically and have your return accepted, you’ll need to validate your return with last year’s adjusted gross income. As simple as this sounds, it’s not as easy as looking at last year’s return if your 2020 filing is still pending. In this case, you’ll need to enter $0 for your 2020 AGI or the agency may reject the filing.

Reconcile Your Child Tax Credits and Stimulus Payments

Returns with innocuous errors are one of the biggest causes of notices and held-up returns. Simple mistakes or the careless compilation of a return can causes matching errors and throw a wrench in the processing of a return, with two issues being prone for the average taxpayer: the advance child tax credits and stimulus payments.

Taxpayers should pay extra attention to and double check these areas of their returns to avoid delays. While taxpayers may receive a Letter 6419 for child tax credits or 6475 for stimulus checks, it’s still a good idea to verify your payments for these two areas online for the best accuracy.

Another snafu that can arise is for married couples filing jointly. You may each receive separate letters showing only half of your total payments. Make sure you verify and report the total amount in these cases. Remember that avoiding math errors can save a lot of time and headaches later.

New Questions on Page #1 – “Virtual Currency”

More and more taxpayers are also owners of some type of cryptocurrencies. If you are one of them, then this year, for the first time, you’ll need to answer a new “stand-out” question on page one of your tax return.

There is now a simple yes or no question on the front of every Form 1040, asking if you received, sold or exchanged any cryptocurrency.

Your answer should be “Yes” if you staked, sold, exchanged, mined or used crypto to purchase goods or services in 2021. If you only purchased cryptocurrencies and held them, then you should make sure you check “No.”

A “Yes” here is a flag to the IRS and they’ll be looking for you to report income from staking and mining or gains or losses on schedule D. It can also fast track your return to the manual review pile, adding further delay to processing your return. But remember, that’s no reason to not answer truthfully.

Taxing Saturdays

Reaching the IRS via phone is notoriously difficult (which is why having a CPA prepare your taxes can be more than worth it). Average wait times are exceeding 23 minutes. In response, the IRS is adding monthly walk-in hours on select Saturdays at certain Taxpayer Assistance Centers, starting on Feb. 12.

To access this service, you’ll need government-issued photo identification, a Social Security card or your Individual Taxpayer Identification Number and any IRS letters or notices. If you are filing on your own, this can help clear up issues; but remember, it’s best to use a paid preparer. They can handle both the administrative issues and offer their expertise.

Conclusion

The IRS has a huge backlog of returns with issues, often resulting from simple avoidable problems such as “math errors” or paper filing. Do yourself a favor and follow the advice in this article to make this year less “taxing” on everyone.

Apr 01
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Considerations When Selling a Business

By Blog, General Business News

According to the U.S. Small Business Administration and Project Equality, 60 percent of business owners plan to cash out of the business in the next 10 years. For the baby boomer generation, it’s especially important as they contemplate retirement, with this generation reportedly owning 2.3 million businesses. When it comes to getting a business ready for sale, there are many components to review and get organized before looking for prospective buyers.

The first thing owners looking to sell their business are being asked is why they’re selling. This may occur for many reasons – voluntary or not. Some people are looking to retire, while others might be looking to exit their business because things soured with partners. These are just some of the reasons why business owners or partners want to sell their business or stake in a company. Entrepreneur magazine says there are “three ways to leave a business – sell it, merge it or close it.”

According to Entrepreneur magazine, there are many considerations for business owners when they are contemplating selling. For profitable companies, it’s more often due to choosing to sell, but not always. When there’s the desire to sell a business, if the owners can show potential purchasers some or all of the following, chances are it will sell sooner than later and for a fair price: growing income, profitability and a customer base, along with a business plan and product/services with long-term potential.

Another consideration is timing of the sale. Ideally, getting the business’ house in order will benefit both the seller and the buyer. With this in mind, it’s important to have a few backup buyers in case the first deal falls through. One reason a deal may fall through is because the buyer didn’t qualify for financing before the sales process got serious. This planning can give the business owner and potential buyers time to review, audit and organize financial records; review and determine the business structure; and determine and analyze the business’ customer base. This review and organization will be able to help the new buyer maintain business continuity, if they decide to purchase the business.

The next step is to get documents in order. Organize the cash flow statement, balance sheet and income statements, along with tax returns from the past few years. It’s important to inventory all equipment, intellectual property, trade secrets, etc. to see what can be sold and transferred and verify the current market value of each. Taking stock of both sales records and suppliers, and getting contact information for both will help make a sale more likely. Depending on if the information is proprietary or not, it’s important to have this ready to share, under confidentiality, with potential buyers. An operating manual and a general overview of the business are also necessary in order to show the company’s presence clean and repaired.

Another consideration is how business assets that aren’t so easy to touch will be valued. According to the American Bar Association, goodwill is an intangible asset, such as reputation, along with intellectual property like trademark. The New York State Society of CPAs’ (NYSSCPA) publication, The CPA Journal, reports that goodwill has an indefinite life, and one way to see if it meets the test of being goodwill is if it “is inseparable from the business.”

Another consideration when selling a business is to see its recent cash flow and to calculate it properly for potential buyers. According to the NYSSCPA and the Statement of Financial Accounting Standards (SAFS) 95, cash flow from operating activities (CFO), per the SFAS 95’s statement of cash flow (SCF), is calculated by starting with the net loss or income and then factoring in differences in working capital and non-cash sales.

Once the CFO is calculated, this figure shows how much the business earns from its operating activities, as the name implies. It’s important to see how this figure differs from investing or financing operations that may be ancillary to the company’s irregular financials. Once this information is known, it gives potential buyers an accurate assessment of the company they are buying to see if they’re comfortable with the existing business. Showing a business that’s doing well can help attract buyers at a fair price.

While each business is different and the reasons for exiting it vary, understanding what potential buyers are looking for can increase the chances of a fast sale at a fair price for both seller and buyer.

Sources

https://www.score.org/blog/how-profitably-exit-your-online-business

http://archives.cpajournal.com/2002/0102/features/f013602.htm

https://www.entrepreneur.com/encyclopedia/selling-your-business

https://www.americanbar.org/content/dam/aba-cms-dotorg/products/inv/book/213938/5070556_SamCh.pdf

The Challenge of Accounting for Goodwill

http://archives.cpajournal.com/old/14152806.htm

https://www.sba.gov/blog/7-tax-strategies-consider-when-selling-business

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