January 1, 2020

How to Calculate and Analyze Return on Equity

When it comes to evaluating a business, especially one that is publicly traded, determining its return on equity (ROE) is one way to see how it’s performing. What is Return on Equity? Return on equity is a ratio that gives investors insight into how effectively the company’s management team is taking care of the shareholders’ financial investments in the company. The greater the ROE percentage, the better the business’ management staff is at making income and creating growth from shareholders’ investments.   How ROE is Determined In order to calculate ROE, a company’s net income is divided by shareholder equity. To arrive at net income, businesses account for the cost of doing business, which includes the cost of goods sold, sales, […]
January 1, 2020

2020 Tax Brackets, Deductions, Plus More

Beginning on Jan. 1, 2020, the Internal Revenue Service (IRS) has new annual inflation adjustments for tax rates, brackets, deductions and retirement contribution limits. Note, the amounts below do not impact the tax filing you make in 2020 for the tax year 2019. These amounts apply to your 2020 taxes that you will file in 2021. 2020 Tax Rates and 2020 Tax Brackets Below are the new 2020 tables for personal income tax rates. There are separate tables each for individuals, married filing jointly couples and surviving spouses, heads of household and married filing separate; all with seven tax brackets for 2020. Tax Brackets & Rates – Individuals Taxable Income Between Tax Due $0 – $9,875 10% $9,876 – $40,125 $988 […]
December 1, 2019

Hanging Flags, Awarding Geniuses, Supporting Hong Kong Protestors and Criminalizing Animal Cruelty

National POW/MIA Flag Act (S 693) – This bill amended title 36 of the United States Code to require that the POW/MIA flag be displayed on all days that the flag of the United States is displayed on certain federal properties. Previously, the POW/MIA flag was displayed only on Armed Forces Day, Memorial Day, Flag Day, Independence Day, National POW/MIA Recognition Day and Veterans Day. The legislation was introduced by Sen. Elizbeth Warren (D-MA) on March 7. It was passed in the Senate on May 2, passed in the House on Oct. 22 and signed into law by the president on Nov. 7. Hidden Figures Congressional Gold Medal Act (HR 1396) – This legislation awards Congressional Gold Medals to Katherine […]
December 1, 2019

What is Splinternet and Why You Should Care

Eric Schmidt, former Google CEO, made a prediction in September 2018 that the internet will split in two – one part being led by China and the other by the United States. The reasoning behind this involves China’s active monitoring of all internet activities, as well as technological products and services from the country. Other reasons include a different leadership regime, controls and censorship. Although it’s just speculation, the splinternet phenomenon has been around since the 1990s. Also known as cyber-balkanization, the concept is slowly taking root as governments seek to fence off their internet to create national internets. How Realistic is Splinternet? The United States has maintained dominance over the internet since its inception and going public. But in […]
December 1, 2019

Practicing Gratitude: A Look Back at 2019

It may be hard to believe, but the end of the year is upon us. During this time, many of us might reflect on the year and tally up the good and the bad, the pros and the cons of the past 12 months. In a society that focuses on success and getting ahead, probably the most common thing to do is zero in on what you didn’t accomplish, or what went wrong. But science tells us that if you’re smart, you’ll look back with gratitude. And the best news is: it’s good for our health. Gratitude Changes Your Brain – For the Better When you give thanks for positive things in your life and show appreciation, it literally changes […]
December 1, 2019

Gross Domestic Product: A Primer

The economic indicator known as Gross Domestic Product (GDP) represents the dollar value of all purchased goods and services over the course of one year. It is comprised of purchases from all private and public consumption, including for profit, nonprofit and government sectors. There are four components that are added to calculate the GDP: Consumer spending Government spending Investment spending (this includes business, inventory, residential construction and public investment),   Net exports, meaning the value of goods exported minus the value of goods imported The government calculates and publishes the GDP rate on a quarterly basis and for the entire year. What Affects GDP? There are different ways GDP is measured. For example, nominal GDP refers to a straight calculation of […]
December 1, 2019

What Would a Phase One Deal with China Encompass?

The so-called phase one of a trade deal with China is expected to contain a provision for $40 billion to $50 billion in purchases of American agricultural products by China, according to an October news release from U.S. Sen. John Hoeven (D-ND) With ongoing discussions surrounding the US-Sino trade talks, there are rumors for such a partial trade deal. But how has the recent past impacted both countries’ economies and a mutual desire for better trade deals? While not directly related but announced during a similar time frame, a November press release from the United States Trade Representative (USTR) announced Chinese acknowledgment and acceptance of American poultry exports. This stated that China will now accept $1 billion in American poultry […]
December 1, 2019

Furniture, Fixtures and Equipment – and Depreciation

When it comes to determining depreciation for Furniture, Fixtures and Equipment (FF&E), there are many considerations that exist for accountants and business owners. Defining Furniture, Fixtures and Equipment FF&E refers to expenses for business items that are not affixed to the building where that business operates. Real world examples of depreciable assets includes chairs, desks, phones, tables, cabinets, etc., which are used to perform business-related tasks, directly or indirectly. These types of items are associated with long-term use generally more than 12 months, according to the Internal Revenue Service. Understanding How It Works When it comes to accounting for the expense of the item, it can be depreciated equally and discreetly over its useful life. According to the IRS’ General […]
December 1, 2019

How to Defer, Avoid Paying Capital Gains Tax on Stock Sales

The markets are hitting all-time highs, so if you are thinking of selling stocks now or in the near future, there is a good chance that you will have capital gains on the sale. If you’ve held the stocks for more than a year, then they will qualify for the more favorable long-term capital gains tax (instead of being taxed at ordinary income rates for short-term sales). But the total tax due can still be enough to warrant some tax planning. Luckily, the tax laws provide for several ways to defer or even completely avoid paying taxes on your securities sales. 1. Using Tax Losses Utilizing losses is the least attractive of all the options in this article since you […]
November 1, 2019

Fighting Foreign Terrorism on Homeland Soil, Increased Protections for Clean Water and Low-Income Veterans, and New Appropriations for FY2020

Terrorist and Foreign Fighter Travel Exercise Act of 2019 (HR 1590) – This bill promotes the identification and determent of terrorist activity from reaching the homeland, and enhances the United States government’s ability to respond to terrorism, including emerging threats. Specifically, the legislation requires the Department of Homeland Security to develop and conduct exercises related to foreign terrorism, including the National Incident Management System, National Response Plan, and other related plans and strategies. The legislation was introduced on March 7 by Rep. Michael Guest (R-MS). The president signed the bill into law on Oct. 9. Alaska Remote Generator Reliability and Protection Act (S 163) – This bill is designed to prevent catastrophic failure or shutdown of remote diesel power engines […]
November 1, 2019

How to Stay Safe with Business Email Compromise on the Rise

According to a report by the Financial Crimes Enforcement Network (FinCEN) released in July, financial institutions have incurred more than $9 billion in losses due to Business Email Compromise (BEC) schemes since 2016. With such staggering losses, businesses and even individuals can’t afford to ignore BEC attacks. What is BEC? BEC fraud involves cyber thieves posing as company executives or a business contact with the intention to commit wire transfer fraud or obtain sensitive information. The main targets are businesses working with foreign suppliers or a business that carries out regular wire-transfer payments. To carry out this attack, criminals might pretend to be the company CEO and request that a junior staff member perform a task for them, such as […]
November 1, 2019

5 Ways to Save on Holiday Gifting

Believe it or not, the holidays are right around the corner. And try as you might, overspending is real – whether you plan ahead or wait until the last minute. With this in mind, here are a few ways to get a handle on spending and save money on gifting. Set Limits. Decide how much you’re going to spend overall on holiday gifts and how many people you’re buying for. Then do the math. For instance, you might want to spend $250 for 10 people. That’s $25 per person. However, there might be those you want to spend more on, which is perfectly understandable. But you can get into trouble when you buy your sister an expensive sweater and then […]
November 1, 2019

What to Expect and How to Prepare for a Recession

Economists generally determine that the country has fallen into a recession after two consecutive quarters of negative gross domestic product (GDP) growth. Since 1967, the United States has experienced seven recessions. The thing is, predicting a recession is a little like predicting a tornado. Experts are never exactly sure if or when one will occur, but they can cite when conditions a ripe for one based past experience. The good news for predictors is that the economy follows a similar pattern of indicators in the months leading up to a recession. The bad news is that many those indicators have recently emerged. For example: Inverted Yield Curve – This is when the yield on longer-term Treasury bonds is lower than […]
November 1, 2019

How Will Ongoing China Trade Tensions Tensions Impact Consumer Spending?

According to the U.S. Department of Commerce and the U.S. Census Bureau, retail sales came in at a negative 0.3 percent for September, even though it’s still 4.1 percent more than September 2018’s report. The same report followed up on August 2019’s numbers, with a revision by the agency to 0.6 percent, up from 0.4 percent. With the ongoing U.S.-China trade war and tariff uncertainty, how will consumer spending be impacted? Current State of Trade and Tariffs With phase one agreed to, at least in principle, at the end of the meeting with Chinese Vice Premier Liu on Oct. 11, President Trump agreed to keep tariffs at 25 percent on $250 billion in Chinese imports, instead of increasing the tariffs […]
November 1, 2019

LIFO Versus FIFO and How Each Method Values Inventory

As the name implies, First-In, First-Out (FIFO) is a way for companies to value their inventory. The first items put into inventory or produced by the company are accordingly the first taken out of inventory or transferred to customers and therefore expensed. When it comes to accounting for acquisition and/or production costs, initial and earlier costs are the first to be expensed, with more recent costs staying on the balance sheet to be expensed later. Assume a company already has 200 widgets costing $4/widget. From there, the company increased its inventory at three more times during a selected accounting period. Three hypothetical, additional purchases include: 200 widgets @ $6/widget 200 widgets @ $7/widget 200 widgets @ $8/widget If the company […]
November 1, 2019

Tax Changes 2019

With the start of the fourth quarter of 2019 underway, it’s time to see what the Internal Revenue Service (IRS) will expect of filers for their 2019 taxes. The following are a list of major changes that filers need to be aware of: 1. Removal of the Affordable Care Act’s (ACA) Individual Mandate Penalty With the passage of the Tax Cuts and Jobs Act (TCJA), filers and households who failed to carry adequate health insurance according to the ACA’s minimum coverage requirements will no longer have to pay the penalty on their 2019 taxes. This is because the TCJA lowered the penalty to zero dollars permanently. In previous years, households not meeting ACA health insurance requirements were mandated to pay […]
October 1, 2019

Debt Relief for Military Service Members, Veterans, Family Farmers and Small Business Owners

Small Business Reorganization Act of 2019 (HR 3311) – Scheduled to take effect starting in February 2020, this new law offers small businesses more agreeable terms when filing for Chapter 11 bankruptcy status. The bill gives owners: More time (90 days) to file a reorganization plan with easier rules for extension The ability to retain ownership of the company even if debts are not paid in full A new formula for debt payments based on projected disposable income over three to five years Reduced red tape through the appointment of a “standing trustee” (instead of a credit committee) to oversee the reorganization process A more “fair and equitable” process to determine owner and creditor equity interests More protection against creditor […]
October 1, 2019

What is VPN and Why Do You Need It?

The rise in the number of data breaches reported every other day has become a major concern – even to the ordinary internet user. As a result, we have all become aware of the need to maintain privacy while online. One of the measures promising to keep you safe on the internet is the use of a virtual private network (VPN). But before rushing to install one of the many VPNs available, it’s important to understand what a VPN is, why you need it, if it is foolproof and other ways to stay safe on the internet. What is a VPN? The VPN service lets you browse the internet privately by masking your IP address – the unique address identifying […]
October 1, 2019

How Parents Can Save Money for College-Bound Kids

No matter how old your children are, it’s always a good idea to start saving for college as soon as possible. (Yes, even when they’re still in diapers.) This might sound overwhelming, especially if you haven’t started, but take heart, it’s never too late. Here are a few things to do before you start saving, as well as smart ways to gather the resources you’ll need. Figure Out How Much College Will Cost Is your child interested in a state school? A small private university? Or a trade school? Create a list of schools, do the math and figure out a ballpark number of how much you’ll need. When you do this, you can calculate how much per month or […]
October 1, 2019

How to Inflation-Proof a Retirement Portfolio

Statistics indicate that the average life expectancy is longer than it used to be, but empirically we see this every day among elderly people who have lived much longer than they probably expected. This phenomenon spotlights a particular component of retirement planning that was not as significant in the past as it is now: long-term inflation. While we’ve not experienced annual inflation rates this century as high as the latter part of the 20th century, inflation can balloon at any time. But what can be even more devastating to a retiree on a fixed income is cumulative inflation over time. It’s also important to recognize that specific consumer product inflation rates can differ substantially from the averages. For example, according […]
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