Slowly, our world is changing. A percentage of the population has been vaccinated and many employees are headed back to the office. However, this may cause a bit of anxiety – and understandably so. Here are few ways to help take the edge off of returning to the workplace.
Wake up Earlier
For some of you, working from home might have caused you to shift your office hours. Maybe you’re starting later and staying up later. Whatever your routine, it’s safe to say that generally, office hours are 9 a.m. to 5 p.m. A few days, perhaps a week, before you expect to go back, set your alarm earlier. Each day, baby step it back a few minutes to the time you roused yourself before the shutdown began. Though things might never be the same, at least your re-entry into the work world might feel somewhat familiar.
Prepare the Night Before Your First Day
Along with starting your day earlier, think through everything you need to take with you. Do you drink coffee? Make sure you have a thermos with a hot cup of joe ready to go. Do you eat lunch at work? Make your lunch the night before; or if you prefer microwavable meals, be sure you’ve got all your favs ready to pop into your work bag. Ensuring that you will have sustenance at whatever time you lunch will save you a lot of worry.
Review Your Workplace Protocols
Here we’re talking about rules to keep you safe. Do you need a mask if you’ve been vaccinated? What if you haven’t been vaccinated? Do you need to always wear a mask? Will there be hand sanitizer onsite or do you need to bring your own? Email HR or leadership to be fully aware of the policy so you can keep up-to-date with any changes. Staying informed will help calm your nerves.
Manage Your Stress
Make sure you’re being mindful of how you’re feeling emotionally before, during, and after you return to work. If you’re dealing with anxiety when you’re back at work, practice self-care. Take a walk outside during lunch to get some fresh air. If you like to exercise and your gym is open, plan a quick workout. If for some reason you can’t leave the office, try meditation apps like Calm, Headspace or Simple Habit. (These are also great when you get home and before you go to bed – anytime, actually.) You might also call a friend or family member and share how you’re feeling. Letting off some steam and expressing yourself helps alleviate some of the pressure that might be building up.
Communicate with Your Team
Making the transition back to the office can be challenging, if not downright tough. To diffuse any misunderstandings, practice transparency with everyone, no matter what their position. If you’re a manager, lay out your expectations so that everyone is on the same page. If you’re an individual contributor, make sure your manager and peers know what you’re working on, your hours, and any out-of-the-office days you have coming up. Many companies are asking employees, initially, to split their time between the office and home, which means that for some a full transition back to the office is yet to come. Regardless, overcommunicating will ensure you don’t miss out on anything important.
We may never return to the days before the pandemic. However, we’re making strides to get back to a place of normalcy and are here to guide you every step of the way.
Slowly, our world is changing. A percentage of the population has been vaccinated and many employees are headed back to the office. However, this may cause a bit of anxiety – and understandably so. Here are few ways to help take the edge off of returning to the workplace.
Wake up Earlier
For some of you, working from home might have caused you to shift your office hours. Maybe you’re starting later and staying up later. Whatever your routine, it’s safe to say that generally, office hours are 9 a.m. to 5 p.m. A few days, perhaps a week, before you expect to go back, set your alarm earlier. Each day, baby step it back a few minutes to the time you roused yourself before the shutdown began. Though things might never be the same, at least your re-entry into the work world might feel somewhat familiar.
Prepare the Night Before Your First Day
Along with starting your day earlier, think through everything you need to take with you. Do you drink coffee? Make sure you have a thermos with a hot cup of joe ready to go. Do you eat lunch at work? Make your lunch the night before; or if you prefer microwavable meals, be sure you’ve got all your favs ready to pop into your work bag. Ensuring that you will have sustenance at whatever time you lunch will save you a lot of worry.
Review Your Workplace Protocols
Here we’re talking about rules to keep you safe. Do you need a mask if you’ve been vaccinated? What if you haven’t been vaccinated? Do you need to always wear a mask? Will there be hand sanitizer onsite or do you need to bring your own? Email HR or leadership to be fully aware of the policy so you can keep up-to-date with any changes. Staying informed will help calm your nerves.
Manage Your Stress
Make sure you’re being mindful of how you’re feeling emotionally before, during, and after you return to work. If you’re dealing with anxiety when you’re back at work, practice self-care. Take a walk outside during lunch to get some fresh air. If you like to exercise and your gym is open, plan a quick workout. If for some reason you can’t leave the office, try meditation apps like Calm, Headspace or Simple Habit. (These are also great when you get home and before you go to bed – anytime, actually.) You might also call a friend or family member and share how you’re feeling. Letting off some steam and expressing yourself helps alleviate some of the pressure that might be building up.
Communicate with Your Team
Making the transition back to the office can be challenging, if not downright tough. To diffuse any misunderstandings, practice transparency with everyone, no matter what their position. If you’re a manager, lay out your expectations so that everyone is on the same page. If you’re an individual contributor, make sure your manager and peers know what you’re working on, your hours, and any out-of-the-office days you have coming up. Many companies are asking employees, initially, to split their time between the office and home, which means that for some a full transition back to the office is yet to come. Regardless, overcommunicating will ensure you don’t miss out on anything important.
We may never return to the days before the pandemic. However, we’re making strides to get back to a place of normalcy and are here to guide you every step of the way.
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Auditing is crucial to ensure the accuracy and fairness of financial information. However, one of the biggest threats to audit reputation today is data quality. This is because of the large volumes of data that businesses produce today. To deal with so much data, auditors are now turning to data analytics.
Data Analytics and Audits
Technology has played a major role in business growth as it aids in reducing operational costs and improving customer service. As such, many businesses have adopted enterprise resource planning (ERP) systems. These systems result in huge volumes of data, making it nearly impossible to analyze using the traditional audit process.
Auditors are left with no choice but to also use IT-based solutions; and this led to the development of audit software to support the auditors in data extraction and analysis.
To further enhance the workings of audit software, it’s now being integrated with data analytics. Given that data analytics works with structured data, the systems incorporate machine learning (deep learning) to extract useful data from a host of unstructured data.
Although these developments in the audit profession have not changed the primary role of auditors, they have changed how an audit is done by helping produce high quality audit evidence.
How Data Analytics Improves Audit Quality
Traditional audits involve combing through piles of data, which is time consuming. As a result, auditors prefer workarounds like data sampling, which does not give a true outcome.
With data analytics, an auditor does not have to restrict data to financial reporting systems only. Instead, they can use data from multiple complete data sets, such as sales statistical data and employee and customer master data. This enables an auditor to go beyond traditional audits that target limited data and include different audit relevant data.
Using data analytics tools, auditors look for predefined patterns that help reveal ambiguous relationships between variables that a manual system might not identify. This helps facilitate a more comprehensive decision that includes all data sets.
By integrating data analytics, auditors have access to a powerful tool that helps them better understand a business. As a result, they can easily identify key audit risks, provide deeper insights into a business’ systems and controls, detect fraud, and provide value in a less costly manner.
Apart from simplifying and speeding up the audit process, data analytics also enables auditors to focus on key risks.
The capabilities of data analytics continue to evolve to the point of automating the auditing process through advanced data analytics (ADA). This enables the automation of routine audit processes, allowing the auditors more time for matters that require professional judgment.
Challenges of Audit Data Analytics
Audit data analytics isn’t without a few challenges, one of which is data exchange between a business and an auditor, whether internal or external. This is in relation to different systems used in data collection. To handle this challenge, the AICPA introduced data standards to be used for data requests and to ensure production of standard reports from the ERP systems.
Another challenge is the integrity of data fed into the analytics systems, as this determines the quality of the end results. Systems used should be designed around collecting meaningful data. Auditors must also ensure that the conclusions fed into the systems are accurate and correct.
Although data analytics reduces the sampling risk, it introduces the challenge of getting numerous exceptions, mostly referred to as outliers, that produce results outside audit expectations. This calls for auditors to investigate the exceptions/outliers to determine if they are errors or misstatements.
Conclusion
Integrating data analytics into the audit process greatly improves audit quality and credibility. With rapid advancements in technology, the capabilities of data analytics will continue to evolve, making auditing work even more efficient while maintaining high quality.
Although the adoption of data analytics is dependent on the size of a business, availability of skilled staff is also crucial. To remain relevant in a fast-changing environment, auditors need to advance their skills to effectively use the data analytics tools.
Audits in Accounting: Improving Audit Quality with Data Analytics
July 1, 2021 · Blog, What's New in Technology
⏱ 4 min read
Auditing is crucial to ensure the accuracy and fairness of financial information. However, one of the biggest threats to audit reputation today is data quality. This is because of the large volumes of data that businesses produce today. To deal with so much data, auditors are now turning to data analytics.
Data Analytics and Audits
Technology has played a major role in business growth as it aids in reducing operational costs and improving customer service. As such, many businesses have adopted enterprise resource planning (ERP) systems. These systems result in huge volumes of data, making it nearly impossible to analyze using the traditional audit process.
Auditors are left with no choice but to also use IT-based solutions; and this led to the development of audit software to support the auditors in data extraction and analysis.
To further enhance the workings of audit software, it’s now being integrated with data analytics. Given that data analytics works with structured data, the systems incorporate machine learning (deep learning) to extract useful data from a host of unstructured data.
Although these developments in the audit profession have not changed the primary role of auditors, they have changed how an audit is done by helping produce high quality audit evidence.
How Data Analytics Improves Audit Quality
Traditional audits involve combing through piles of data, which is time consuming. As a result, auditors prefer workarounds like data sampling, which does not give a true outcome.
With data analytics, an auditor does not have to restrict data to financial reporting systems only. Instead, they can use data from multiple complete data sets, such as sales statistical data and employee and customer master data. This enables an auditor to go beyond traditional audits that target limited data and include different audit relevant data.
Using data analytics tools, auditors look for predefined patterns that help reveal ambiguous relationships between variables that a manual system might not identify. This helps facilitate a more comprehensive decision that includes all data sets.
By integrating data analytics, auditors have access to a powerful tool that helps them better understand a business. As a result, they can easily identify key audit risks, provide deeper insights into a business’ systems and controls, detect fraud, and provide value in a less costly manner.
Apart from simplifying and speeding up the audit process, data analytics also enables auditors to focus on key risks.
The capabilities of data analytics continue to evolve to the point of automating the auditing process through advanced data analytics (ADA). This enables the automation of routine audit processes, allowing the auditors more time for matters that require professional judgment.
Challenges of Audit Data Analytics
Audit data analytics isn’t without a few challenges, one of which is data exchange between a business and an auditor, whether internal or external. This is in relation to different systems used in data collection. To handle this challenge, the AICPA introduced data standards to be used for data requests and to ensure production of standard reports from the ERP systems.
Another challenge is the integrity of data fed into the analytics systems, as this determines the quality of the end results. Systems used should be designed around collecting meaningful data. Auditors must also ensure that the conclusions fed into the systems are accurate and correct.
Although data analytics reduces the sampling risk, it introduces the challenge of getting numerous exceptions, mostly referred to as outliers, that produce results outside audit expectations. This calls for auditors to investigate the exceptions/outliers to determine if they are errors or misstatements.
Conclusion
Integrating data analytics into the audit process greatly improves audit quality and credibility. With rapid advancements in technology, the capabilities of data analytics will continue to evolve, making auditing work even more efficient while maintaining high quality.
Although the adoption of data analytics is dependent on the size of a business, availability of skilled staff is also crucial. To remain relevant in a fast-changing environment, auditors need to advance their skills to effectively use the data analytics tools.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Recognizing the Abolishment of Slavery and Compensating Law Enforcement, Overseas Federal Employees and Disaster Relief Victims
⏱ 3 min read
Juneteenth National Independence Day Act (S 475) – This bill authorizes Juneteenth National Independence Day on June 19 as a legal public holiday. The bill was introduced by Sen. Ed Markey (D-MA) on Feb. 25. It was passed by both the House and the Senate on June 16 and signed into law by the president on June 17.
Protecting America’s First Responders Act (S 937) – This bill was introduced by Sen. Chuck Grassley (R-IA) on April 29. The legislation ensures that certain law enforcement and first responders who have become permanently and totally disabled as a result of personal injuries sustained in the line of duty have prompt access to specific payments and benefits. The bill passed in the Senate on June 10 and is currently under consideration in the House.
HAVANA Act of 2021 (S 1828) – This bill provides financial support and resources for American officials suffering from the so-called Havana Syndrome – a mysterious set of symptoms that first affected federal employees stationed in Cuba in 2016. The bill authorizes disability benefits to American personnel who have experienced qualifying anomalous health incidents while serving in other countries throughout the world. The legislation was introduced by Sen. Susan Collins (R-ME) on May 25 and passed in the Senate on June 8. It is currently under consideration in the House.
Preventing Disaster Revictimization Act (HR 539) – Introduced by Rep. Sam Graves (R-MO) on Jan. 28, this bill would prevent the Federal Emergency Management Agency (FEMA) from taking back disaster assistance funds that it mistakenly awarded to victims who applied for assistance in good faith. Under current law, FEMA can go back weeks, months or even years to seek repayment of funds in cases where the agency subsequently determined it mistakenly granted assistance, but no fraud was committed. This bill would require FEMA to waive that disaster relief debt. The legislation passed in the House on June 15 and is in the Senate for consideration.
United States Innovation and Competition Act of 2021 (S 1260) – This bill establishes a Directorate for Technology and Innovation in the National Science Foundation (NSF) for the purpose of strengthening U.S. leadership in critical technologies. The legislation authorizes investments in research, development and manufacturing in key technology focus areas, such as artificial intelligence, high performance computing and innovation to support national security strategy. The Office of Science and Technology Policy is to develop an annual strategy for the federal government to improve national competitiveness in science and research, and help grow critical industries to generate jobs for the future. The bill was introduced by Sen. Chuck Schumer (D-NY) on April 20 and passed in the Senate on June 8. It is currently under consideration in the House.
Recognizing the Abolishment of Slavery and Compensating Law Enforcement, Overseas Federal Employees and Disaster Relief Victims
July 1, 2021 · Blog, Congress at Work
⏱ 3 min read
Juneteenth National Independence Day Act (S 475) – This bill authorizes Juneteenth National Independence Day on June 19 as a legal public holiday. The bill was introduced by Sen. Ed Markey (D-MA) on Feb. 25. It was passed by both the House and the Senate on June 16 and signed into law by the president on June 17.
Protecting America’s First Responders Act (S 937) – This bill was introduced by Sen. Chuck Grassley (R-IA) on April 29. The legislation ensures that certain law enforcement and first responders who have become permanently and totally disabled as a result of personal injuries sustained in the line of duty have prompt access to specific payments and benefits. The bill passed in the Senate on June 10 and is currently under consideration in the House.
HAVANA Act of 2021 (S 1828) – This bill provides financial support and resources for American officials suffering from the so-called Havana Syndrome – a mysterious set of symptoms that first affected federal employees stationed in Cuba in 2016. The bill authorizes disability benefits to American personnel who have experienced qualifying anomalous health incidents while serving in other countries throughout the world. The legislation was introduced by Sen. Susan Collins (R-ME) on May 25 and passed in the Senate on June 8. It is currently under consideration in the House.
Preventing Disaster Revictimization Act (HR 539) – Introduced by Rep. Sam Graves (R-MO) on Jan. 28, this bill would prevent the Federal Emergency Management Agency (FEMA) from taking back disaster assistance funds that it mistakenly awarded to victims who applied for assistance in good faith. Under current law, FEMA can go back weeks, months or even years to seek repayment of funds in cases where the agency subsequently determined it mistakenly granted assistance, but no fraud was committed. This bill would require FEMA to waive that disaster relief debt. The legislation passed in the House on June 15 and is in the Senate for consideration.
United States Innovation and Competition Act of 2021 (S 1260) – This bill establishes a Directorate for Technology and Innovation in the National Science Foundation (NSF) for the purpose of strengthening U.S. leadership in critical technologies. The legislation authorizes investments in research, development and manufacturing in key technology focus areas, such as artificial intelligence, high performance computing and innovation to support national security strategy. The Office of Science and Technology Policy is to develop an annual strategy for the federal government to improve national competitiveness in science and research, and help grow critical industries to generate jobs for the future. The bill was introduced by Sen. Chuck Schumer (D-NY) on April 20 and passed in the Senate on June 8. It is currently under consideration in the House.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Let’s face it. Saving money is a challenge at best – and really hard the rest of the time. But what if you made it a fun game to inspire yourself to save? Here are a few ways to do just that.
Keep the Change Challenge
Anytime you receive or find loose change in your pockets or house, put it in a jar. Don’t touch it for a year, and then see how much you save. But here’s a great plus-up for this habit: download a money-saving app like Acorns and watch your savings grow. Anytime you buy something, Acorns will round up the total and deposit the difference into a diversified investment portfolio. Talk about easy.
Weather Wednesday Challenge
This is great idea. Every Wednesday,look up the highest temperature in your state and deposit the amount into your savings account. For example, if it’s 100 degrees, deposit $100. If it’s 32 degrees, deposit $32. You’ll probably save more during the summer than the winter, but after 52 weeks, you could’ve socked away several thousand dollars. Pretty sweet.
Kick-a-Bad-Habit Challenge
Do you go to Starbucks every day for your Double Chocolatey Chip Crème Frappuccino with extra whip? How about guzzling those sodas every day? Are you a smoker? Whatever it is that you’d like to cut down on or even stop, this challenge has two great benefits: you’ll not only get healthier, but you will also save money.
The No-Spend Challenge
Start with a weekend (or even a week) and make a vow not to spend any money on anything except bills or other necessities. The idea is to save money by not spending it. It might cause you to be more creative. For instance, do you really need a new dress for that special occasion? Dig a little deeper into your closet instead of buying a new frock. Or maybe you decide to drive less and not put gas in the tank. This way, you’ll either bike or walk to your destination (if doable) and do more fun things at home.
The Pantry Challenge
Look inside your refrigerator and pantry. How much food do you have that you haven’t eaten? What about that spaghetti sauce or sesame oil? As long as the food isn’t expired, it’s your chance to get creative and whip up a new dish or revive an old favorite. This challenge is related to the “No-Spend Challenge,” and again, the intention is to save money by not spending it.
The 365-Day Nickel Challenge
Nickels are currency, too! But seriously, if you can remember to do this (set a timer on your phone), you’ll be rewarded handsomely. Here’s how it works: On day one, deposit 5 cents into a jar. The next day, 10 cents. The next day, 15 cents. And so on. By day 365, the total deposit will be $18.40. At the end of the year, you’ll have saved a whopping $3,339.75. Not bad, huh?
While saving money might feel restrictive, you’re actually planning ahead to be very happy. When you’ve been able to stick to a habit, or in some cases give one up, you’ll see that anything is possible if you just put your mind to it. And that’s a great feeling.
Let’s face it. Saving money is a challenge at best – and really hard the rest of the time. But what if you made it a fun game to inspire yourself to save? Here are a few ways to do just that.
Keep the Change Challenge
Anytime you receive or find loose change in your pockets or house, put it in a jar. Don’t touch it for a year, and then see how much you save. But here’s a great plus-up for this habit: download a money-saving app like Acorns and watch your savings grow. Anytime you buy something, Acorns will round up the total and deposit the difference into a diversified investment portfolio. Talk about easy.
Weather Wednesday Challenge
This is great idea. Every Wednesday,look up the highest temperature in your state and deposit the amount into your savings account. For example, if it’s 100 degrees, deposit $100. If it’s 32 degrees, deposit $32. You’ll probably save more during the summer than the winter, but after 52 weeks, you could’ve socked away several thousand dollars. Pretty sweet.
Kick-a-Bad-Habit Challenge
Do you go to Starbucks every day for your Double Chocolatey Chip Crème Frappuccino with extra whip? How about guzzling those sodas every day? Are you a smoker? Whatever it is that you’d like to cut down on or even stop, this challenge has two great benefits: you’ll not only get healthier, but you will also save money.
The No-Spend Challenge
Start with a weekend (or even a week) and make a vow not to spend any money on anything except bills or other necessities. The idea is to save money by not spending it. It might cause you to be more creative. For instance, do you really need a new dress for that special occasion? Dig a little deeper into your closet instead of buying a new frock. Or maybe you decide to drive less and not put gas in the tank. This way, you’ll either bike or walk to your destination (if doable) and do more fun things at home.
The Pantry Challenge
Look inside your refrigerator and pantry. How much food do you have that you haven’t eaten? What about that spaghetti sauce or sesame oil? As long as the food isn’t expired, it’s your chance to get creative and whip up a new dish or revive an old favorite. This challenge is related to the “No-Spend Challenge,” and again, the intention is to save money by not spending it.
The 365-Day Nickel Challenge
Nickels are currency, too! But seriously, if you can remember to do this (set a timer on your phone), you’ll be rewarded handsomely. Here’s how it works: On day one, deposit 5 cents into a jar. The next day, 10 cents. The next day, 15 cents. And so on. By day 365, the total deposit will be $18.40. At the end of the year, you’ll have saved a whopping $3,339.75. Not bad, huh?
While saving money might feel restrictive, you’re actually planning ahead to be very happy. When you’ve been able to stick to a habit, or in some cases give one up, you’ll see that anything is possible if you just put your mind to it. And that’s a great feeling.
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Business accounting activities can be tedious when performed manually and are prone to errors. For these reasons, many businesses have shifted to accounting software that offers numerous benefits, including data accuracy, time savings, easier auditing and on-demand reports.
With so many available options, it’s overwhelming to choose the right fit for a particular business. As more software vendors join the market with different enticing offers, it’s wise to be equipped with the right information.
Making a Decision Between Different Accounting Software
Each business is different and varies with industry. For efficient accounting operations, you cannot afford to choose a one-size-fits-all solution. Here are tips to help ease the selection process.
Understand your business requirements Whether you are a start-up or already have an existing business, begin by establishing your accounting requirements. This will help in making a list of features that you need in accounting software. Avoid copying other businesses without understanding what your business needs are. Consider your business size, number of users and projected growth (in order to support business scaling).
Conduct Research Learn more about accounting software options. Some might offer only general accounting features while others provide industry-specific features. By reading online reviews, you can see what users are saying about different accounting software.
Get Recommendations From Your Accountant Accountants who have already worked with the software have better knowledge about the product and can advise what will work for your business. Get their opinions.
Your Budget A business budget is a major determining factor in purchasing an accounting program. Note that software vendors have different pricing models. Depending on how much you are willing to spend, you can choose between monthly subscription fees or a pay-per-use model. Ensure that you have checked out any extra or hidden costs as you could end up spending more than initially planned. And pricing aside, avoid choosing the cheapest option just to save on expenses. The wrong software could cost your business more in the long run.
Integration with Other Software Businesses today use various software applications. It’s crucial that you select one that integrates with your existing business applications. This will help avoid duplication of work, such as manual data entry from one program to another.
Online Versus Offline Accounting Software You might prefer to have accounting software that you install on your computer, or maybe you’d rather use the online hosted version. Online accounting software is gaining popularity among SMBs due to its affordability. To use this option, you don’t need to install anything – just access it with your credentials. This allows users to access the accounting software from anywhere, even using different devices.
Availability of Customer Support Check whether the software vendor offers support after you have purchased or subscribed to use the software. What times do they offer support? And for how long will this support be available?
Data Security Data security is especially important for those who choose to work with online accounting software. Consider security measures offered by the software vendor to safeguard against data breaches and other cybersecurity risks. A good software vendor should have measures in place like automatic data backup, data encryption, and allow granular user roles to be assigned.
Parting Words
Accounting software is crucial for businesses of all sizes as it plays an important role in the accounting process; thus, you can’t afford to choose randomly. Consider all your business needs before making a choice for the best fit for your business. Create a list of preferences, then check for vendors that offer free trials to get a taste of their services before making a final decision.
Remember, choosing the right accounting software will save you from the costly mistake of replacing a wrong one.
How to Choose the Right Accounting Software for your Business
June 1, 2021 · Blog, What's New in Technology
⏱ 4 min read
Business accounting activities can be tedious when performed manually and are prone to errors. For these reasons, many businesses have shifted to accounting software that offers numerous benefits, including data accuracy, time savings, easier auditing and on-demand reports.
With so many available options, it’s overwhelming to choose the right fit for a particular business. As more software vendors join the market with different enticing offers, it’s wise to be equipped with the right information.
Making a Decision Between Different Accounting Software
Each business is different and varies with industry. For efficient accounting operations, you cannot afford to choose a one-size-fits-all solution. Here are tips to help ease the selection process.
Understand your business requirements Whether you are a start-up or already have an existing business, begin by establishing your accounting requirements. This will help in making a list of features that you need in accounting software. Avoid copying other businesses without understanding what your business needs are. Consider your business size, number of users and projected growth (in order to support business scaling).
Conduct Research Learn more about accounting software options. Some might offer only general accounting features while others provide industry-specific features. By reading online reviews, you can see what users are saying about different accounting software.
Get Recommendations From Your Accountant Accountants who have already worked with the software have better knowledge about the product and can advise what will work for your business. Get their opinions.
Your Budget A business budget is a major determining factor in purchasing an accounting program. Note that software vendors have different pricing models. Depending on how much you are willing to spend, you can choose between monthly subscription fees or a pay-per-use model. Ensure that you have checked out any extra or hidden costs as you could end up spending more than initially planned. And pricing aside, avoid choosing the cheapest option just to save on expenses. The wrong software could cost your business more in the long run.
Integration with Other Software Businesses today use various software applications. It’s crucial that you select one that integrates with your existing business applications. This will help avoid duplication of work, such as manual data entry from one program to another.
Online Versus Offline Accounting Software You might prefer to have accounting software that you install on your computer, or maybe you’d rather use the online hosted version. Online accounting software is gaining popularity among SMBs due to its affordability. To use this option, you don’t need to install anything – just access it with your credentials. This allows users to access the accounting software from anywhere, even using different devices.
Availability of Customer Support Check whether the software vendor offers support after you have purchased or subscribed to use the software. What times do they offer support? And for how long will this support be available?
Data Security Data security is especially important for those who choose to work with online accounting software. Consider security measures offered by the software vendor to safeguard against data breaches and other cybersecurity risks. A good software vendor should have measures in place like automatic data backup, data encryption, and allow granular user roles to be assigned.
Parting Words
Accounting software is crucial for businesses of all sizes as it plays an important role in the accounting process; thus, you can’t afford to choose randomly. Consider all your business needs before making a choice for the best fit for your business. Create a list of preferences, then check for vendors that offer free trials to get a taste of their services before making a final decision.
Remember, choosing the right accounting software will save you from the costly mistake of replacing a wrong one.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Addressing Hate Crimes, Banks Serving the Cannabis Industry and Unilateral Power to Restrict Immigration
⏱ 3 min read
Comprehensive Debt Collection Improvement Act (HR 2547) – This bill would expand financial protections and restrictions on debt collection activities for consumers, in particular for private student loans and medical debt. The legislation would require lenders to discharge private student loan debt if the borrower dies or becomes permanently disabled. It would prohibit consumer reporting agencies from adding any information related to certain situations, such as debt arising from a medically necessary procedure, and restrict certain debt collection practices.
The bill was introduced by Rep. Maxine Waters (D-CA) on April 15. It was passed by the House on May 13 and is currently under consideration in the Senate.
COVID-19 Hate Crimes Act (S 937) – This bill was introduced by Sen. Mazie Hirono (D-HI) on May 23. The legislation authorizes the designation of a Department of Justice (DOJ) employee to facilitate an expedited review of hate crime reports. The DOJ also must issue guidance for state, local and tribal law enforcement agencies to establish online hate crime reporting processes and issue guidance to raise awareness of hate crimes related to COVID-19. The bill also authorizes funding for states to create state-run hate crime reporting hotlines. This bill was passed by Congress on May 18 and is awaiting signature by the president.
Washington, D.C., Admission Act (HR 51) – This bill provides for the admission of the State of Washington, D.C., into the Union. The legislation was introduced by Rep. Eleanor Norton (D-DC) on Jan. 4 and passed in the House on April 22. It is currently under consideration in the Senate.
SAFE Banking Act of 2021 (HR 1996) – Introduced by Rep. Ed Perlmutter (D-CO) on March 18, this bill would eliminate penalties imposed on a depository institution for providing banking services to a legitimate cannabis-related business. The legislation passed in the House on April 19 and is in the Senate for consideration
DUMP Opioids Act (S 957) – This bill was introduced by Sen. John Kennedy (R-LA) on March 24 and passed in the Senate on April 22. It is currently under consideration in the House. The bill would require the Department of Veterans Affairs (VA) to designate places where any individual can dispose of controlled substance medications at VA medical facilities or law enforcement locations. The bill also directss the VA to advertise the designated disposal times and locations via a public information campaign.
NO BAN Act (HR 1333) – Introduced by Rep. Judy Chu (D-CA) on Feb. 25, this bill passed in the House on April 21 and goes to the Senate next for consideration. The purpose of the legislation is to impose limitations on the president’s authority to suspend or restrict aliens from entering the United States. Furthermore, the bill would prohibit religious discrimination to be used as a basis for immigration-related decisions.
Addressing Hate Crimes, Banks Serving the Cannabis Industry and Unilateral Power to Restrict Immigration
June 1, 2021 · Blog, Congress at Work
⏱ 3 min read
Comprehensive Debt Collection Improvement Act (HR 2547) – This bill would expand financial protections and restrictions on debt collection activities for consumers, in particular for private student loans and medical debt. The legislation would require lenders to discharge private student loan debt if the borrower dies or becomes permanently disabled. It would prohibit consumer reporting agencies from adding any information related to certain situations, such as debt arising from a medically necessary procedure, and restrict certain debt collection practices.
The bill was introduced by Rep. Maxine Waters (D-CA) on April 15. It was passed by the House on May 13 and is currently under consideration in the Senate.
COVID-19 Hate Crimes Act (S 937) – This bill was introduced by Sen. Mazie Hirono (D-HI) on May 23. The legislation authorizes the designation of a Department of Justice (DOJ) employee to facilitate an expedited review of hate crime reports. The DOJ also must issue guidance for state, local and tribal law enforcement agencies to establish online hate crime reporting processes and issue guidance to raise awareness of hate crimes related to COVID-19. The bill also authorizes funding for states to create state-run hate crime reporting hotlines. This bill was passed by Congress on May 18 and is awaiting signature by the president.
Washington, D.C., Admission Act (HR 51) – This bill provides for the admission of the State of Washington, D.C., into the Union. The legislation was introduced by Rep. Eleanor Norton (D-DC) on Jan. 4 and passed in the House on April 22. It is currently under consideration in the Senate.
SAFE Banking Act of 2021 (HR 1996) – Introduced by Rep. Ed Perlmutter (D-CO) on March 18, this bill would eliminate penalties imposed on a depository institution for providing banking services to a legitimate cannabis-related business. The legislation passed in the House on April 19 and is in the Senate for consideration
DUMP Opioids Act (S 957) – This bill was introduced by Sen. John Kennedy (R-LA) on March 24 and passed in the Senate on April 22. It is currently under consideration in the House. The bill would require the Department of Veterans Affairs (VA) to designate places where any individual can dispose of controlled substance medications at VA medical facilities or law enforcement locations. The bill also directss the VA to advertise the designated disposal times and locations via a public information campaign.
NO BAN Act (HR 1333) – Introduced by Rep. Judy Chu (D-CA) on Feb. 25, this bill passed in the House on April 21 and goes to the Senate next for consideration. The purpose of the legislation is to impose limitations on the president’s authority to suspend or restrict aliens from entering the United States. Furthermore, the bill would prohibit religious discrimination to be used as a basis for immigration-related decisions.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
With the economy reopening and more Americans receiving COVID-19 vaccinations, the economy is expected to be operating on all cylinders. However, some economists and market analysts are afraid The Federal Reserve may create a “taper tantrum” if and when it starts to reduce its purchase of U.S. Treasury debt. The Fed’s current track of purchasing $120 billion of U.S. Treasury debt every month has kept the 10-year yield moderated. However, if The Fed signals fewer monthly purchases from current levels, recent history has already seen higher 10-year yields and increased market volatility.
As the Federal Reserve Bank of St. Louis outlines, the Federal Open Market Committee (FOMC) holds meetings eight times a year to evaluate the country’s economic conditions and determine the forward monetary policy. This includes what they will do (or not do) to the federal funds rate, which is the rate that financial institutions charge each other for overnight interbank lending.
Whatever the FOMC decides to do with the federal funds rate, it’s important to know that any changes to the federal funds rate impacts short-term interest rates, such as the three-month Treasury bill. Depending on how it’s modified (increased or decreased), the rate change impacts consumer and business loans and longer-term debt.
When the FOMC raises or lowers the federal funds rate, it sends a policy directive specifying the new target range to the trading desk of the New York Fed. Depending on the target rate of the new fed funds rate, more government securities will be bought to lower the rate, or government securities will be sold to raise the new target. This is accomplished through its open market operations (OMO).
OMO is made up of two parts. The Fed buying or selling U.S. Treasury bonds, for example, consists of the operations part of OMO. Since the Fed relies on the trading desk of the New York Fed to accomplish its goals, it uses the open market to purchase these securities through the traditional bid and offer trading method. It’s one tool in its toolbox to accomplish the dual mandate policy of maximizing employment and maintaining price stability.
Depending on which way the Fed goes – either tightening or loosening its policy – it tries to steer the level of the banking system’s reserves, creating a shift in interest rates. For example, when the Fed buys Treasury bonds, it adds capital to the purchasing bank’s reserve balance to increase lending through lower interest rates. When the Fed sells its U.S. Treasury bonds, it moves the federal funds rate upward. This lowers banks’ reserves, causing financial institutions to increase lending costs.
When it comes to the term “quantitative easing,” the Federal Reserve Bank of St. Louis defines it as “large-scale operations of the purchase of large amounts of longer-term U.S. Treasury securities and mortgage-backed securities.” One noteworthy consideration for OMO is that when the federal funds rate is near zero, which occurred during the 2008-2009 financial crisis, quantitative easing is one more tool in the Fed’s toolbox to help the economy dig itself out of a downturn and provide liquidity.
Tapering in Action
According to the Federal Reserve Bank of St. Louis, when tapering was even mentioned, it had negative effects on the markets. After continued quantitative easing was instituted to rescue the economy from the 2008-2009 financial crisis through part of 2013, the Fed made comments regarding these efforts in its FOMC meeting and during its press conference on June 19, 2013. It indicated that it would begin “tapering” (gradually lessening) its monthly bond purchases during the end of 2013, assuming economic conditions were improving. However, the market reacted badly to these comments.
U.S. 10-year bond yields spiked to 2.35 percent within hours of the FOMC meeting and press conference on June 19, 2013. On June 21, 2013, the 10-year bond yields climbed farther to 2.55 percent. Similarly, the same meeting prompted a spike in “normalized foreign exchange per USD rates,” according to the St. Louis Fed. In the two days from June 19-21, 2013, the U.S. dollar gained between 2 percent and 3 percent in value against the Euro, the British pound, the Canadian dollar, and the Japanese yen.
Conclusion
Looking at markets on June 19, 2013, when the Fed announced the tapering, the Dow Jones fell more than 200 points, the S&P dropped 1.4 percent and the Nasdaq finished 1.1 percent lower.
Retail and institutional investors can’t predict the future, but they can look at the past and monitor upcoming Federal Reserve events to see what it might end up doing to the stock market.
Will The Federal Reserve Create a Taper Tantrum in 2021?
June 1, 2021 · Blog, Stock Market News
⏱ 4 min read
With the economy reopening and more Americans receiving COVID-19 vaccinations, the economy is expected to be operating on all cylinders. However, some economists and market analysts are afraid The Federal Reserve may create a “taper tantrum” if and when it starts to reduce its purchase of U.S. Treasury debt. The Fed’s current track of purchasing $120 billion of U.S. Treasury debt every month has kept the 10-year yield moderated. However, if The Fed signals fewer monthly purchases from current levels, recent history has already seen higher 10-year yields and increased market volatility.
As the Federal Reserve Bank of St. Louis outlines, the Federal Open Market Committee (FOMC) holds meetings eight times a year to evaluate the country’s economic conditions and determine the forward monetary policy. This includes what they will do (or not do) to the federal funds rate, which is the rate that financial institutions charge each other for overnight interbank lending.
Whatever the FOMC decides to do with the federal funds rate, it’s important to know that any changes to the federal funds rate impacts short-term interest rates, such as the three-month Treasury bill. Depending on how it’s modified (increased or decreased), the rate change impacts consumer and business loans and longer-term debt.
When the FOMC raises or lowers the federal funds rate, it sends a policy directive specifying the new target range to the trading desk of the New York Fed. Depending on the target rate of the new fed funds rate, more government securities will be bought to lower the rate, or government securities will be sold to raise the new target. This is accomplished through its open market operations (OMO).
OMO is made up of two parts. The Fed buying or selling U.S. Treasury bonds, for example, consists of the operations part of OMO. Since the Fed relies on the trading desk of the New York Fed to accomplish its goals, it uses the open market to purchase these securities through the traditional bid and offer trading method. It’s one tool in its toolbox to accomplish the dual mandate policy of maximizing employment and maintaining price stability.
Depending on which way the Fed goes – either tightening or loosening its policy – it tries to steer the level of the banking system’s reserves, creating a shift in interest rates. For example, when the Fed buys Treasury bonds, it adds capital to the purchasing bank’s reserve balance to increase lending through lower interest rates. When the Fed sells its U.S. Treasury bonds, it moves the federal funds rate upward. This lowers banks’ reserves, causing financial institutions to increase lending costs.
When it comes to the term “quantitative easing,” the Federal Reserve Bank of St. Louis defines it as “large-scale operations of the purchase of large amounts of longer-term U.S. Treasury securities and mortgage-backed securities.” One noteworthy consideration for OMO is that when the federal funds rate is near zero, which occurred during the 2008-2009 financial crisis, quantitative easing is one more tool in the Fed’s toolbox to help the economy dig itself out of a downturn and provide liquidity.
Tapering in Action
According to the Federal Reserve Bank of St. Louis, when tapering was even mentioned, it had negative effects on the markets. After continued quantitative easing was instituted to rescue the economy from the 2008-2009 financial crisis through part of 2013, the Fed made comments regarding these efforts in its FOMC meeting and during its press conference on June 19, 2013. It indicated that it would begin “tapering” (gradually lessening) its monthly bond purchases during the end of 2013, assuming economic conditions were improving. However, the market reacted badly to these comments.
U.S. 10-year bond yields spiked to 2.35 percent within hours of the FOMC meeting and press conference on June 19, 2013. On June 21, 2013, the 10-year bond yields climbed farther to 2.55 percent. Similarly, the same meeting prompted a spike in “normalized foreign exchange per USD rates,” according to the St. Louis Fed. In the two days from June 19-21, 2013, the U.S. dollar gained between 2 percent and 3 percent in value against the Euro, the British pound, the Canadian dollar, and the Japanese yen.
Conclusion
Looking at markets on June 19, 2013, when the Fed announced the tapering, the Dow Jones fell more than 200 points, the S&P dropped 1.4 percent and the Nasdaq finished 1.1 percent lower.
Retail and institutional investors can’t predict the future, but they can look at the past and monitor upcoming Federal Reserve events to see what it might end up doing to the stock market.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Senate rules and procedures have a major impact on how tax laws are drafted and amended, especially when it comes to those related to the budget reconciliation process.
Budget reconciliation is a separate Senate procedure established by the Congressional Budget Act (CBA) of 1974. The main differentiator is that the reconciliation process changes the vote threshold to a simple majority of 50 instead of 60, essentially negating the filibuster.
Not every bill can be taken up under this process, though – including tax provisions. There are guidelines that govern what tax provisions can be included in laws passed using the budget reconciliation process in the form of both rules and precedent.
Impact of the Act
The CBA may help expedite passing new tax legislation, but there are drawbacks and limitations. For example, administrative provisions are often a very important aspect of the policy objective behind tax laws, but using the reconciliation process strips out these measures since it prohibits “extraneous matters.” All an opposing senator needs to do is make a point of order; if it is sustained by the committee chair, then the material deemed extraneous is removed from the bill.
In addition to the removal of extraneous material, there is a prohibition on out-year deficit effects. This means that tax provisions that pass as part of a reconciliation package are often temporary and given expiration dates.
The Role of Precedent
The precedents of the Senate are often just as important as the rules themselves. Senate rules are often vague, but the practices of the Senate regarding these rules are well developed, effectively becoming the rules themselves.
The most important procedural rules can be found in a publication called Riddick’s Senate Procedure. These Senate rules and precedents are not automatic, however. The system relies on senators to raise a point of order to challenge a possible violation of the rules.
Conclusion
The budget reconciliation process makes passage of the bill more efficient for the majority party, but it comes with certain drawbacks by design. The intent is to make sure that the powers are not too broad and cannot be abused by the majority party.
How Senate’s Rules Shape Tax Laws
June 1, 2021 · Blog, Guest Article of the Month
⏱ 2 min read
Senate rules and procedures have a major impact on how tax laws are drafted and amended, especially when it comes to those related to the budget reconciliation process.
Budget reconciliation is a separate Senate procedure established by the Congressional Budget Act (CBA) of 1974. The main differentiator is that the reconciliation process changes the vote threshold to a simple majority of 50 instead of 60, essentially negating the filibuster.
Not every bill can be taken up under this process, though – including tax provisions. There are guidelines that govern what tax provisions can be included in laws passed using the budget reconciliation process in the form of both rules and precedent.
Impact of the Act
The CBA may help expedite passing new tax legislation, but there are drawbacks and limitations. For example, administrative provisions are often a very important aspect of the policy objective behind tax laws, but using the reconciliation process strips out these measures since it prohibits “extraneous matters.” All an opposing senator needs to do is make a point of order; if it is sustained by the committee chair, then the material deemed extraneous is removed from the bill.
In addition to the removal of extraneous material, there is a prohibition on out-year deficit effects. This means that tax provisions that pass as part of a reconciliation package are often temporary and given expiration dates.
The Role of Precedent
The precedents of the Senate are often just as important as the rules themselves. Senate rules are often vague, but the practices of the Senate regarding these rules are well developed, effectively becoming the rules themselves.
The most important procedural rules can be found in a publication called Riddick’s Senate Procedure. These Senate rules and precedents are not automatic, however. The system relies on senators to raise a point of order to challenge a possible violation of the rules.
Conclusion
The budget reconciliation process makes passage of the bill more efficient for the majority party, but it comes with certain drawbacks by design. The intent is to make sure that the powers are not too broad and cannot be abused by the majority party.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
President Biden presented his $1.8 trillion American Families Plan, which focuses on expanding benefits for education, children and childcare. The Biden administration intends to pay for the plan with a series of tax hikes on certain individual taxpayers. Depending on your income and source of wealth, there are some clear winners and losers of this proposal, so let’s look at each and start with those who lose.
Losers Under the Plan
High Earners: The proposed plan would increase the highest individual tax rate from 37 percent up to 39.6 percent. Currently, this tax bracket starts with those earning more than $523,000 for singles and $628,000 for taxpayers who are married filing jointly. While the percentage increase may appear small, this change is projected to raise more than $111 billion over the next 10 years.
Heirs of Large Estates: The plan proposes eliminating the “step-up” in basis on assets received when an estate is passed on. The step-up in basis means that the heir now has a basis in the inherited asset equal to the fair market value at the date of death. This essentially eliminates the payment of capital gains taxes.
The plan allows for the initial $1 million in transferred gains to remain tax-protected, so this would only impact larger estates.
Wealthy Investors: A change to the long-term capital gains and qualified dividends taxation is proposed for taxpayers earning more than $1 million per year.
Currently, long-term capital gains (on assets held for more than one year) and qualified dividends are taxed at a flat 20 percent. The plan taxes long-term capital gains and qualified dividends as ordinary income, raising the rate to 39.6 percent for the taxpayer affected.
Hedge Funds and Private Equity: The Biden plan looks to eliminate the carried interest tax break, which allows partners in the funds to treat a large portion of their compensation as long-term capital gains instead of ordinary income.
Real estate investors: Currently, the tax law allows for what are called section 1031 like-kind exchanges. A 1031 exchange allows the proceeds from the sale of real estate to be reinvested in another similar or “like-kind” asset, and defer the capital gains taxes as a result.
The proposed plan would eliminate section 1031 like-kind exchanges for all sales where there are gains of $500,000 or more.
Winners
Low and Middle-Income Families with Children: The Biden tax plan calls for a five-year extension of the expanded Child Tax Credit (CTC) created in the American Rescue Plan. The CTC gives a credit of $3,000 for every child age 6 to 17 and $3,600 for children 5 and younger for single taxpayers earning $75,000 or less and married filers earning $150,000 or less. The plan would also make the existing $2,000 CTC permanently refundable.
Low-Income Individuals Without Children: The plan proposes a permanent enlargement of the Earned Income Tax Credit. The American Rescue Plan increased the maximum benefit for filers without children from $534 to $1,502 and broadened the eligibility criteria to include those under and over 65.
Working Parents: The American Rescue Plan also included a temporary enhancement of the Child and Dependent Care Tax Credit. This credit would give qualifying families a tax credit of up to $4,000 for one child or $8,000 for more than one child to compensate for childcare costs while they work, including after-school programs. The new tax plan would make this credit permanent for those making $125,000 per year or less.
Conclusion
The benefits of the Biden tax plan for its winners are nothing new or novel. Essentially, it calls for making permanent several the provisions originally passed in the American Rescue Plan and increases taxes on wealthier taxpayers to pay for it.
The Biggest Winners and Losers in President Biden’s Proposed Individual Tax Plan
June 1, 2021 · Blog, Tax and Financial News
⏱ 3 min read
President Biden presented his $1.8 trillion American Families Plan, which focuses on expanding benefits for education, children and childcare. The Biden administration intends to pay for the plan with a series of tax hikes on certain individual taxpayers. Depending on your income and source of wealth, there are some clear winners and losers of this proposal, so let’s look at each and start with those who lose.
Losers Under the Plan
High Earners: The proposed plan would increase the highest individual tax rate from 37 percent up to 39.6 percent. Currently, this tax bracket starts with those earning more than $523,000 for singles and $628,000 for taxpayers who are married filing jointly. While the percentage increase may appear small, this change is projected to raise more than $111 billion over the next 10 years.
Heirs of Large Estates: The plan proposes eliminating the “step-up” in basis on assets received when an estate is passed on. The step-up in basis means that the heir now has a basis in the inherited asset equal to the fair market value at the date of death. This essentially eliminates the payment of capital gains taxes.
The plan allows for the initial $1 million in transferred gains to remain tax-protected, so this would only impact larger estates.
Wealthy Investors: A change to the long-term capital gains and qualified dividends taxation is proposed for taxpayers earning more than $1 million per year.
Currently, long-term capital gains (on assets held for more than one year) and qualified dividends are taxed at a flat 20 percent. The plan taxes long-term capital gains and qualified dividends as ordinary income, raising the rate to 39.6 percent for the taxpayer affected.
Hedge Funds and Private Equity: The Biden plan looks to eliminate the carried interest tax break, which allows partners in the funds to treat a large portion of their compensation as long-term capital gains instead of ordinary income.
Real estate investors: Currently, the tax law allows for what are called section 1031 like-kind exchanges. A 1031 exchange allows the proceeds from the sale of real estate to be reinvested in another similar or “like-kind” asset, and defer the capital gains taxes as a result.
The proposed plan would eliminate section 1031 like-kind exchanges for all sales where there are gains of $500,000 or more.
Winners
Low and Middle-Income Families with Children: The Biden tax plan calls for a five-year extension of the expanded Child Tax Credit (CTC) created in the American Rescue Plan. The CTC gives a credit of $3,000 for every child age 6 to 17 and $3,600 for children 5 and younger for single taxpayers earning $75,000 or less and married filers earning $150,000 or less. The plan would also make the existing $2,000 CTC permanently refundable.
Low-Income Individuals Without Children: The plan proposes a permanent enlargement of the Earned Income Tax Credit. The American Rescue Plan increased the maximum benefit for filers without children from $534 to $1,502 and broadened the eligibility criteria to include those under and over 65.
Working Parents: The American Rescue Plan also included a temporary enhancement of the Child and Dependent Care Tax Credit. This credit would give qualifying families a tax credit of up to $4,000 for one child or $8,000 for more than one child to compensate for childcare costs while they work, including after-school programs. The new tax plan would make this credit permanent for those making $125,000 per year or less.
Conclusion
The benefits of the Biden tax plan for its winners are nothing new or novel. Essentially, it calls for making permanent several the provisions originally passed in the American Rescue Plan and increases taxes on wealthier taxpayers to pay for it.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
According to a Tufts University survey, six in ten of those surveyed are now vaccinated against COVID-19. However, almost 40 percent of the unvaccinated respondents said they won’t get the vaccine. Only 28.5 percent of the remaining unvaccinated respondents said they will get vaccinated against COVID-19 in the future, with the remaining unvaccinated respondents unable to decide whether they will take the vaccination. With vaccine hesitancy a concern, how can employers encourage more people to get the vaccine?
It is important to understand why some view vaccines skeptically in order to overcome vaccine hesitancy among employees.
The Johns Hopkins University Coronavirus Resource Center attributes vaccine hesitancy to these factors:
The first factor is safety. Since the vaccine was developed faster than most vaccines have been traditionally, many individuals are concerned about reactions, side effects and quality assurance. More can be read from the CDC VAERS Report.
The second reason has to do with the vaccine’s effectiveness, and how well it works against the coronavirus.
The other reasons for hesitancy are due to things like religious beliefs, vaccine phobias and current health issues of the unvaccinated.
This phenomenon is not isolated to the United States. Based on a global survey of 32 nations that Johns Hopkins cites, 98 percent of Vietnamese would get the vaccine, while only 38 percent of those in Serbia would get the vaccine once it’s available.
Navigating Vaccinations in the Workplace
Requesting a Vaccine Exemption Due to Religious Beliefs
Businesses that fall within the purview of Title VII (Civil Rights Act of 1964), must accommodate an employee’s sincerely held religious belief, practice or observance unless it causes an undue hardship on the business.
The CDC says that once a company is aware of a worker’s “sincerely held religious belief, practice or observance [that stops him from accepting the flu shot], the employer has to provide a reasonable accommodation [except if it causes] an undue hardship.” While this refers to influenza, the reasoning behind it applies equally to an employee expressing their religious objection to a COVID-19 vaccination.
Accommodations for Disabled Employees
According to the Equal Employment Opportunity Commission (EEOC), the Americans with Disabilities Act (ADA) covers employers in the private sector and state and local governments that employ 15 or more workers. The ADA offers guidance for employers when an employee requests to be exempt from a COVID-19 vaccination due to a disability. This Act says that employers are able to implement a workplace standard specifying that a person cannot “pose a direct threat to the health or safety of individuals in the workplace.”
If, however, this workplace standard either sorts out or will likely sort out a disabled person from meeting the workplace safety standard by being unvaccinated, the employer must demonstrate that such person without a vaccine would pose a direct threat of risk to another person in the workplace that cannot be reduced by a reasonable accommodation.
The Equal Employment Opportunity Commission (EEOC) believes a direct or proximate threat exists from the unvaccinated person through four tests: length of the danger, how severe and the type of harm that could occur, the chances of the potential harm that will happen, and proximity of the realistic harm.
When it comes to determining if a reasonable accommodation exists, the EEOC lists three criteria: the worker’s professional responsibilities, if there is a different job the worker could transition to in order to make the vaccination less necessary, and how serious it is to the company’s function that the worker be vaccinated.
How to Encourage More Vaccinations
The U.S. Chamber of Commerce cautions that employers who are contemplating mandating their workers take the COVID-19 vaccination, state law varies on how far they can go. However, a good way to get employees vaccinated is by encouraging and not requiring vaccination. Forcing employees to get the COVID-19 vaccination might make workers look for new employment or face a lack of motivation. Depending on the state laws, a vaccine mandate from an employer might lead to a legal battle if employees refuse to get vaccinated or in rare cases an employee dies from the vaccine.
One way to incentivize employees to get the COVID-19 vaccine is by offering them a cash payment to do so. Average incentives range from $50 to $500 with most being $100.
Based on recommendations from the Centers for Disease Control and Prevention (CDC), there are many things employers can do to help get their employees vaccinated against COVID-19.
One recommendation is to have management explain to employees why it’s important to get the vaccination by creating flyers, posters and other forms of communication when staff are entering and leaving the building.
Offering workers, the ability to get vaccinated onsite could encourage people who are on the fence, especially after they see their co-workers get vaccinated.
One part of the American Rescue Plan, which passed in 2021, as the Internal Revenue Service (IRS) outlines, permits businesses to claim tax credits if they give their workers paid time off to get vaccinated. This tax credit is eligible for employer reimbursement through paid sick and family leave. It also provides an employer tax credit if employees need time off to recover from any post-COVID-19 vaccine side effects.
Businesses with fewer than 500 employees are eligible for this tax credit for paid sick and family leave that occurs between April 1, 2021, and Sept. 30, 2021. This includes for-profit, tax-exempt organizations and some government employers. Self-employed taxpayers also are eligible for an equivalent tax credit.
Taking the time to encourage workers to get vaccinated, learning how to navigate certain aspects of employment laws and state laws, and making sure to maximize one’s business balance sheet are all essential tools to make the most of 2021 and set up an even better 2022 fiscal year.
Vaccine Hesitancy: Why We Have It and How It Affects Employers and Employees
June 1, 2021 · Blog, General Business News
⏱ 6 min read
According to a Tufts University survey, six in ten of those surveyed are now vaccinated against COVID-19. However, almost 40 percent of the unvaccinated respondents said they won’t get the vaccine. Only 28.5 percent of the remaining unvaccinated respondents said they will get vaccinated against COVID-19 in the future, with the remaining unvaccinated respondents unable to decide whether they will take the vaccination. With vaccine hesitancy a concern, how can employers encourage more people to get the vaccine?
It is important to understand why some view vaccines skeptically in order to overcome vaccine hesitancy among employees.
The Johns Hopkins University Coronavirus Resource Center attributes vaccine hesitancy to these factors:
The first factor is safety. Since the vaccine was developed faster than most vaccines have been traditionally, many individuals are concerned about reactions, side effects and quality assurance. More can be read from the CDC VAERS Report.
The second reason has to do with the vaccine’s effectiveness, and how well it works against the coronavirus.
The other reasons for hesitancy are due to things like religious beliefs, vaccine phobias and current health issues of the unvaccinated.
This phenomenon is not isolated to the United States. Based on a global survey of 32 nations that Johns Hopkins cites, 98 percent of Vietnamese would get the vaccine, while only 38 percent of those in Serbia would get the vaccine once it’s available.
Navigating Vaccinations in the Workplace
Requesting a Vaccine Exemption Due to Religious Beliefs
Businesses that fall within the purview of Title VII (Civil Rights Act of 1964), must accommodate an employee’s sincerely held religious belief, practice or observance unless it causes an undue hardship on the business.
The CDC says that once a company is aware of a worker’s “sincerely held religious belief, practice or observance [that stops him from accepting the flu shot], the employer has to provide a reasonable accommodation [except if it causes] an undue hardship.” While this refers to influenza, the reasoning behind it applies equally to an employee expressing their religious objection to a COVID-19 vaccination.
Accommodations for Disabled Employees
According to the Equal Employment Opportunity Commission (EEOC), the Americans with Disabilities Act (ADA) covers employers in the private sector and state and local governments that employ 15 or more workers. The ADA offers guidance for employers when an employee requests to be exempt from a COVID-19 vaccination due to a disability. This Act says that employers are able to implement a workplace standard specifying that a person cannot “pose a direct threat to the health or safety of individuals in the workplace.”
If, however, this workplace standard either sorts out or will likely sort out a disabled person from meeting the workplace safety standard by being unvaccinated, the employer must demonstrate that such person without a vaccine would pose a direct threat of risk to another person in the workplace that cannot be reduced by a reasonable accommodation.
The Equal Employment Opportunity Commission (EEOC) believes a direct or proximate threat exists from the unvaccinated person through four tests: length of the danger, how severe and the type of harm that could occur, the chances of the potential harm that will happen, and proximity of the realistic harm.
When it comes to determining if a reasonable accommodation exists, the EEOC lists three criteria: the worker’s professional responsibilities, if there is a different job the worker could transition to in order to make the vaccination less necessary, and how serious it is to the company’s function that the worker be vaccinated.
How to Encourage More Vaccinations
The U.S. Chamber of Commerce cautions that employers who are contemplating mandating their workers take the COVID-19 vaccination, state law varies on how far they can go. However, a good way to get employees vaccinated is by encouraging and not requiring vaccination. Forcing employees to get the COVID-19 vaccination might make workers look for new employment or face a lack of motivation. Depending on the state laws, a vaccine mandate from an employer might lead to a legal battle if employees refuse to get vaccinated or in rare cases an employee dies from the vaccine.
One way to incentivize employees to get the COVID-19 vaccine is by offering them a cash payment to do so. Average incentives range from $50 to $500 with most being $100.
Based on recommendations from the Centers for Disease Control and Prevention (CDC), there are many things employers can do to help get their employees vaccinated against COVID-19.
One recommendation is to have management explain to employees why it’s important to get the vaccination by creating flyers, posters and other forms of communication when staff are entering and leaving the building.
Offering workers, the ability to get vaccinated onsite could encourage people who are on the fence, especially after they see their co-workers get vaccinated.
One part of the American Rescue Plan, which passed in 2021, as the Internal Revenue Service (IRS) outlines, permits businesses to claim tax credits if they give their workers paid time off to get vaccinated. This tax credit is eligible for employer reimbursement through paid sick and family leave. It also provides an employer tax credit if employees need time off to recover from any post-COVID-19 vaccine side effects.
Businesses with fewer than 500 employees are eligible for this tax credit for paid sick and family leave that occurs between April 1, 2021, and Sept. 30, 2021. This includes for-profit, tax-exempt organizations and some government employers. Self-employed taxpayers also are eligible for an equivalent tax credit.
Taking the time to encourage workers to get vaccinated, learning how to navigate certain aspects of employment laws and state laws, and making sure to maximize one’s business balance sheet are all essential tools to make the most of 2021 and set up an even better 2022 fiscal year.
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
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