Retirement plans being used for immediate needs, not for savings

Posted 5/22/2018

Not having enough emergency savings for unexpected expenses is the most frequently cited financial concern for Millennial (48%) and Generation X (51%) employees, while not being able to retire when they want to is the most frequently cited concern among Baby Boomers (46%), according to the 2018 edition of PwC’s Employee Financial Wellness Survey. Forty-two per cent said its likely they will need to use money held in retirement plans for other expenses. When asked what causes them the most stress in their lives, nearly twice as many employees say financial matters as compared to job stress.

Plan Adviser Fox Business

Read the rest of this entry »

Tax cut sparks record-setting buyback bonanza

Posted 5/21/2018

The Tax Cuts and Jobs Act, which reduced the corporate rate from 35% to 21%, appears to have triggered a wave of share buybacks, with S&P 500 companies spending $178bn on stock repurchases in the first three months of 2018 – 34% up on the same period last year. Howard Silverblatt of S&P Dow Jones Indices has suggested that total buybacks for the year could top $1tn for the first time ever.

CNN Money

Read the rest of this entry »

Federal contractor accused of incomplete background checks on IRS staff

Posted 5/18/2018

A report released yesterday by TIGTA claims that a former government contractor allegedly performed hundreds of thousands of incomplete background investigations of federal government employees, including thousands of IRS staffers. U.S. Investigations Services (USIS), a former contractor of the Office of Personnel Management, is alleged by the Justice Department to have done incomplete reviews of approximately 665,000 background investigations from March 2008 through September 2012 for the federal government. Although it didn’t identify any derogatory information about the 3,498 employees vetted by USIS, TIGTA significant concerns about the quality and completeness of IRS employee investigations. In response, IRS human capital officer Katherine M. Coffman said that those employed in the time frame have or will be reinvestigated.

Accounting Today

Read the rest of this entry »

AICPA recommends flexibility in partnership audits

Posted 5/17/2018

Annette Nellen, chair of AICPA’s Tax Executive Committee, has written to the IRS asking it to provide a simplified adjustment procedure for partnership audits. In total, Ms Nellen made six recommendations regarding the new centralized partnership audit regime, under which a partnership is generally liable for the net increase in tax (or “imputed underpayment”) that results from the adjustments made to partnership items during the year under audit. Among her suggestions are a call for a flexible procedure for applying audit adjustments to the tax attributes of audited partnerships and their partners, and for audited partnerships to be provided with an elective “simplified tax attribute adjustment procedure” (STAAP) under certain conditions.

The Tax Adviser

Read the rest of this entry »

AICPA working draft addresses valuations of portfolio company investments

Posted 5/16/2018

AICPA published a working draft of an Accounting and Valuation Guide yesterday, providing guidance for financial reporting purposes regarding the accounting for and valuation of portfolio company investments of venture capital and private-equity funds and other investment companies. Portfolio company investments are defined in the working draft as investments in both equity and debt instruments of privately held enterprises and certain enterprises with traded instruments.

Journal of Accountancy

Read the rest of this entry »

IRS updates automatic accounting method change procedures

Posted 5/11/2018

The IRS has released details of a new revenue procedure that provides a new automatic way that companies can use when changing their accounting method to conform to the FASB’s new revenue recognition standard. The revenue procedure the IRS issued Thursday modifies an earlier one from last year, Rev. Proc. 2017-30, to provide procedures for obtaining automatic consent from the IRS for the change in accounting method. It provides new procedures for taxpayers changing their method of accounting for the recognition of income for federal income tax purposes, and when the method change is made for the taxable year in which the taxpayer adopts the new standards.

Journal of Accountancy Accounting Today

Read the rest of this entry »

Muted wage growth could be linked to healthinsurance

Posted 5/10/2018

A new study of IRS data purports to answer the question of why U.S. wage growth has been so muted even though unemployment is so low - because health insurance premiums have been undermeasured. Average premiums for employer-sponsored health insurance plans are roughly $1,000 higher than previously thought, according to the analysis from Jeff Larrimore of the Federal Reserve and David Splinter of the Joint Committee on Taxation, with a gap between the IRS data and that used by the Labor Department’s Current Population Survey. The authors of the report also noted that the rising values of fringe benefits, such as health insurance, may have offset potential wage gains for middle-income workers.

Market Watch

Read the rest of this entry »

ACCA report spotlights corporate governance

Posted 5/9/2018

The Association of Chartered Certified Accountants has published a report on the importance of proper corporate governance in fostering a positive relationship between business and society. Tenets of Good Corporate Governance discusses issues such as diversity and balance on corporate boards, executive remuneration, and the relationship between companies and society. Jo Iwasaki, head of corporate governance at ACCA, said: “Hopefully this report helps businesses to examine their vision and strategic direction in a broader context, which will in turn allow their companies to achieve long term growth.”

Accounting Today

Read the rest of this entry »

Just 32% of businesses ready for tax reform

Posted 5/7/2018

A survey of CFOs by financial recruitment firm Robert Half Finance & Accounting shows that only 32% of companies are ‘very ready’ for the demands that the U.S. Tax Cuts and Jobs Act of 2017 brings, with 56% ‘somewhat prepared’, 9% ‘not very prepared’ and 3% ‘not at all ready’ for the changes. The study highlights the strategies that firms are utilising to move toward compliance, with 42% conducting training, 34% upgrading financial systems, 33% bringing in subject experts, and 21% hiring full-time staff to prepare to meet requirements. On the need to bring in the right people to handle the change, Steve Saah, executive director of Robert Half Finance & Accounting, said: “Acting fast to make necessary hires takes on greater importance, given today's low unemployment rates and talent shortages."

CPA Practice Adviser

Read the rest of this entry »

Women are retiring with up to $1 million less than men

Posted 5/4/2018

A new study from Merrill Lynch and Age Wave has found that, by the time they reach retirement age, women may have accumulated up to $1.05m less than men, thanks to gender pay disparities, and life events such as pregnancy, or caring for a sick parent. Furthermore, it found that, while the typical retirement costs $738,000, only 9% of women have $300,000 or more saved up.The study surveyed 3,707 people - 2,638 women and 1,068 men - based on their earnings from ages 23 to 65.

New York Post

Read the rest of this entry »