Skip to main content
Monthly Archives

December 2021

Year-End Tax Planning Tips for Individuals and Businesses

By Blog, Tax and Financial News

Year-End Tax Planning 2021Here we are again, nearing the end of another year. While the tax deadline for 2021 isn’t until April 2022, now is the time to plan and make some strategic moves to optimize your tax situation. Below we’ll look at some tax planning ideas for both small businesses and individuals.

Business Tax Planning

Business owners should consider a few potential planning areas. Below we’ll look at a handful of relevant topics.

Section 163(j) Interest Expense Limitation

Businesses can deduct interest expenses, subject to a limit at 30 percent of adjusted taxable income (ATI). The calculation for determining ATI is changing in 2022, so some planning might be in order.

Currently, ATI is calculated as taxable income with depreciation and amortization added back. Starting in 2022, depreciation and amortization will no longer be an add-back, effectively lowering the amount of deductible interest a business can claim.

Taxpayers should consider their current year forecast and 2022 projections to see if there is opportunity in converting debt financing to equity financing.

COVID-Driven Innovation

Many businesses needed to change and adapt processes and products to survive or thrive during the pandemic. Depending on the nature of the activities, some of the expenses might qualify for R&D tax credits. Now is the time to investigate what will qualify and begin to gather the documentation.

Remote Workers and Nexus

With so many companies allowing remote work in this new normal, consideration should be given to year-end planning for state and local taxes. State laws around nexus are evolving, and remote workers may create new reporting and payment requirements for both income and employment taxes.

Net Operating Loss Carryforward

Net operating loss (NOL) rules are changing. First, NOLs created from activity in 2021 and beyond can only be carried forward; no carry-back is allowed. Also note that NOLs generated in 2017 and can be used to offset 100 percent of current year taxable income, whereas those generated 2018 and after can only offset up to 80 percent of taxable income in any year.

As a result, taxpayers should consider revenue recognition and other tactics to maximize the use of NOLs.

Individual Tax Planning

Start Gathering Your Documents Now

Taxpayers should start gathering their documents now as there are two main benefits to this. First, it will make things more manageable and organized in 2022. Second, it will get them thinking about their financial picture. Gathering documents forces you to give your year-to-date a mental review so you don’t forget about any new or unusual events that could provide planning opportunities.

Retirement Accounts Review

Generally, everyone should consider topping off tax-advantaged retirement accounts such as IRAs or 401(k).

Perhaps more importantly, consider a back-door Roth conversion. This tax savings strategy permits taking deductible or non-deductible IRAs and converting them to a ROTH IRA. There are a lot of nuances to this move depending on the individual’s situation, but it’s very important to consider since 2021 may be the last year this is allowed, depending on legislative developments.

Required Minimum Distributions

In 2020, required minimum distributions (RMDs) from retirement accounts were suspended. RMDs return for 2021 however, so taxpayers who are 72 or older need to remember to make the calculation and withdrawal by Dec. 31.


There is no better time than now to step back and look at the past year, your financial situation, and the changes to tax laws this year and next. Remember, tax planning only works if you act before the end of the tax year. Once we reach 2022, it will be too late to make much of an impact on your 2021 tax situation.

How Businesses Can Recognize and Combat Employee Burnout

By Blog, General Business News

Employee BurnoutAccording to the job site Indeed, COVID-19 has taken a toll on workers even more in 2021, compared to 2020. The survey conducted by Indeed found that 52 percent of those surveyed felt “burned out” in 2021. Sixty-seven percent of those asked said that feeling burned out has become more pronounced as COVID-19 has progressed. It’s more noticeable among remote workers (38 percent), compared to 28 percent of employees working in person.

Gallup reported in October 2020 that between 2016 and 2019, worker burnout was already on the radar. Once COVID-19 hit workers in 2020, those working remotely 100 percent of the time are reporting even higher levels than those who work outside the home.

Pre-COVID-19, when employees worked remotely either 100 percent of the time or via a hybrid approach, they had lower levels of burnout compared to those who worked at their place of employment full-time.

When it comes to remote-only employees who “experience burnout at work always or very often,” levels have gone from 18 percent pre-pandemic to 29 percent during the coronavirus pandemic.

This phenomenon is blamed on not being able to choose to work remotely or at the workplace – the choice is not there with COVID-19. As of September 2020, 4 in 10 full-time employees worked exclusively from home, compared to 4 percent pre-COVID.

According to the Mayo Clinic, “job burnout is a special type of work-related stress.” Internal factors, according to the Mayo Clinic and Gallup, include uneven treatment by management, excessive work assigned to an individual, a toxic workplace and ambiguous or unclear assignment instructions.

Outside factors such as their personal life, their natural disposition, mood disorders, etc. may add to it. When a worker is fatigued, physically or intellectually, this also grips the worker with a feeling of lower productivity and a loss of who they are professionally.

For those who can’t manage job-related stressors, burnout often leads to negative results. According to the Centers for Disease Control and Prevention (CDC), this includes feeling dubious about one’s future at the company, experiencing an inability to sleep, an inability to concentrate, feeling tired and having little motivation to complete one’s work.

If there’s a completely new way of working, unpredictability of being exposed to COVID-19, having to juggle work and personal obligations throughout the workday and the inability to have the right tools to get work tasks completed, burnout will likely ensue.

Managing Burnout

There are many recommendations to regain control and keep work-related stress in check. This includes creating a schedule for both regular sleep and time to fulfill work tasks, if feasible. Taking strategic breaks and finding constructive non-work interests can lessen the stress of work as part of a balanced schedule.

According to Gallup, managers must harmonize maintaining high-performance expectations with employee commitment to the organization and worker welfare.

Gallup credits effective managers and “organizational communication” with keeping full-time remote workers fully engaged by making them feel like an integral part of their company. Through purposeful training and crystal-clear expectations, workers are set up for success.

The CDC recommends how workers can reduce the effects of burnout. Staying diligent with emotional wellbeing treatments and recognizing and getting treatment for new substance abuse issues is recommended. Staying in touch with others can help both sides feel supported mentally and lower stress. Taking a break from constant negative news is also recommended.

Much like businesses, employees are unique. With COVID-19 impacting each of us differently, managers must evaluate their organization’s circumstances and employees to find a balance between employee performance and their ability to maintain wellbeing.


Fed Chair Nomination in 2022: How Will it Impact Markets?

By Blog, Stock Market News

Fed Chair Nomination in 2022As the Board of Governors of the Federal Reserve System points out, Jerome Powell was appointed to a four-year term on Feb. 5, 2018. With the Fed Chair’s term expiring in February 2022, there has been much uncertainty as to whether he would be reappointed or replaced.

Powell’s first term as the Chair of the Fed began in 2018, after being nominated by President Trump in November 2017. If reappointed, Powell will serve another four years, where he will guide the nation’s short-term monetary policy and become the Federal Open Markets Committee’s (FOMC) chair.

During a Nov. 22 announcement, President Biden said that he’s renominating Powell for another term for the chair position of the Board of Governors of the Federal Reserve System. President Biden also announced that Lael Brainard has been nominated for the vice chair position of the Board of Governors of the Federal Reserve System. With the Fed vice chairman for supervision resigning at the end of 2021, these series of events are providing President Biden with additional nominations to promote his policies.

Understanding the Federal Reserve’s Influence on the Markets

Similar to a chief executive officer, the chair is entrusted to carry out the mandate of the Fed. The primary foci include influencing short- and long-term interest rates, maintaining price stability and encouraging a balance in employment.

The chair of the FOMC is the steward for the nation’s monetary policy by adjusting the federal funds rate, discount rate and buying/selling of government securities to support the economy in its role in fulfilling its economic goals.

How President Biden’s Decision is Expected to Impact Markets

With Brainard having a favorability for fintech and cryptocurrencies and the ability to curry favor with progressives due to her desire for strong bank regulations, her nomination will provide the market with greater stability in conjunction with Powell’s renomination. This is due to Powell’s past four years of steering the market through its challenges, especially with COVID-19. With Powell already communicating the timeline of tapering and when the Fed is likely to increase rates, it should provide greater certainty for the markets.

Additionally, the investment community believes the markets will perceive Brainard as more politically focused due to her contributions to Hillary Clinton’s presidential ambitions in 2016. With Brainard expected to consider and strongly influence the FOMC’s actions on the 2022 midterm elections, she’ll likely lobby the committee to raise interest rates deeper into 2022 after the “tapering” or bond purchasing schedule is complete, compared to the earlier path under Powell’s lead alone.

Political Implications

According to a Nov. 19 statement in support of a Fed Chair other than Jerome Powell and who is committed to addressing climate change, Rhode Island Sen. Sheldon Whitehouse and Oregon Sen. Jeff Merkley made their thoughts clear on how they want the nomination process to not go in favor of Powell.

While Powell has been renominated, he’ll certainly face Congressional pressure during confirmation hearings and beyond if he’s indeed confirmed for a second term. However if the Federal Reserve nomination process plays out for Biden, Powell and Brainard, the FOMC will certainly have its policy influenced by more than President Biden.

Venture Capitalism and ‘Unicorns’

By Blog, Financial Planning

Venture Capitalism UnicornsVenture capitalism comes from an investor who offers money to start-up companies in exchange for an equity stake – much like you see on the ABC television show, Shark Tank. As a general rule, a venture capitalist (VC) invests after the new venture is up and running and looking for additional capital to further commercialize its product.

Once a privately held enterprise reaches a value of $1 billion, it is referred to as a “Unicorn.” This is because new start-ups that reach this level of success are so rare that they are considered comparable to the mythical creature. What is interesting these days is that the current labor market is so disruptive that we are seeing more start-ups, and this trend is expected to continue. At some point it becomes a numbers game – the more new start-ups established, the greater the likelihood of Unicorns achieving success.

Ever since the onset of the COVID-19 pandemic, the United States has experienced a shortage of workers. It started with massive layoffs during the shutdown, but even though jobs returned – not all workers did. The lack of child and elder care forced many working moms to leave their jobs. Today, the controversy over low wages not keeping pace with the cost of living has many people rethinking their career choices. It used to be that a position with a company with generous health insurance benefits was the very definition of a good job. Now, in the wake of the Great Resignation, it appears more workers are looking for a job that is fulfilling. In fact, because workers can now purchase affordable healthcare insurance on government exchanges, they are no longer tethered to a specific employer.

This combination of frustration and flexibility is empowering would-be entrepreneurs to go ahead and take the leap to starting their own business. In 2021 alone, there has been a tremendous increase in new business filings. Furthermore, venture capitalists have been pouring money into these new ventures at a record pace, with more than $240 billion invested this year alone through September. The largest of these investors tend to be private equity firms, hedge funds and corporations.

With more new start-ups, come more Unicorns. Historically, the number of new Unicorn businesses averaged about four per year in the United States. In 2021, however, more than 260 have reached $1 billion status. And the United States isn’t alone in experiencing this trend. Young adults in Japan also are leaving traditional corporate jobs to start their own businesses – and many of them are receiving financing from VCs and other institutional investors in the West.

In China, where TikTok was born and became a global phenomenon, there are presently more than 800 Unicorns. India is the third largest start-up ecosystem in the world, with more than 65 companies recently reaching Unicorn status.

5 Affordable Ways to Share the Holiday Spirit

By Blog, Tip of the Month

Holiday SpiritThe holidays are a season of giving. While much of this involves financial expenditures, you can also give in ways that are more affordable and may hold more meaning. Here are some suggestions about how you can engage in acts of generosity and return to what the season is all about.

Cook Food

Nothing nourishes the heart and soul, not to mention your stomach, like food made with love from your own kitchen. Baking cookies is always an easy and fun thing to do, but a main dish (with protein) or hearty casseroles are also good options. People who are homebound due to an illness, those going through financial difficulties or even new moms will appreciate the gift of a warm meal. You might also ask co-workers, local churches or homeless shelters if they’re looking for some extra sustenance during this time of year.

Create Necessity Bags

Giving to those on the streets during the holidays is an easy, inexpensive way to make a difference. Fill a gallon-sized food storage bag with things like gloves, toothpaste and toothbrush, hand sanitizer, sanitary wipes, bottled water, snacks and a gift card to a grocery store. Then contact your local organizations and charities to see where the needs lie. You might also carry these bags in your car and when you see someone, give it to them. Moments like these are invaluable to those in need and for you, too.

Volunteer Time

Showing up with an extra pair of hands is often what someone needs. A great place to check out is VolunteerMatch. Just type in your ZIP code and you’ll find all kinds of opportunities to help everyone from seniors to children in many sectors, including education, arts and health. You might also find ways to help animals or read to the blind. These are feel-good, money-free ways to experience the joy of giving.

Donate Craft Items

How many times have you thrown away your toilet paper rolls or egg cartons? This year, save and donate them to nearby schools or community centers. All it takes is a few phone calls to find out what their craft needs are. You’ll also be helping the environment – sharing some love for Mother Nature. How simple is that?

Declutter Your Dwelling

This one has so many terrific benefits. You can get rid of clothes and belongings that crowd your closets, which is a wonderful feeling. One option is to sell them on eBay Charity and donate to a nonprofit of your choice. You choose what percentage of the sale goes to the organization (from 10 to 100 percent). eBay will even give you a credit on your selling fees based on the percentage you choose. If you want to give away gently used professional clothes, Dress for Success and Jails to Jobs, are groups that empower people to look their best when making a fresh start. If you’d like to rid yourself of shoes you’ll never wear again, Soles4Souls is a great resource and you can ship up to 15 pairs of shoes without paying a fee through the Zappos for Good program. Talk about good for the sole, er, soul!

For the most part, should you choose to get into the holiday spirit with these activities (aside from a few costs here and there), the main thing you’ll be spending is time. However, experiencing the joy of the giving is priceless.


Considerations When Automating Accounts Payables

By Blog, What's New in Technology

Automating Accounts PayablesAccounts payables (AP) is a process in the financial department that can be inconsistent and burdensome. However, today’s workforce has driven AP transformation – especially with remote working. Some businesses do not have much choice but to accept automation while others may have realized the need to automate accounts payables due to the numerous benefits that come with it.

Before hastily choosing automation, it’s important to make some careful considerations to avoid mistakes that come with the improper implementation of any business accounting technology. Here are a few guiding considerations:

  1. What is the cost-benefit analysis? Any new system comes with its expenses and as such, it is important to measure its return on investment (ROI). This can be calculated using the expected benefits. By conducting a cost-benefit analysis, it will help you know how long it will take for an investment to pay for itself and help in the investment approval for businesses with senior decision-makers.
  2. Understand and document the existing AP processes: Before settling on an automation solution, it is best to first fully understand the existing process. You must examine the format that invoices are received on, how they are numbered, where they are sent for approval and how they are recorded. Carrying out this documentation will help to identify the major pain points of the AP process that you would like to improve, such as manual data entry, missing invoices, discrepancies and more. 
    Understanding the existing process also helps in selecting the best solution that will not destabilize your entire workflow.
  3. Processing Historical Documents: Consider what to do with invoices that already exist in employee workstations or shared drives as they need to be moved to the new system’s repository. Having these documents stored in a central location in an indexed manner helps to ease their retrieval – especially during an audit.
  4. Types of the Available Solution: There are many available solutions, both cloud-based and premise-based. Some of them are ready-to-use, while others can be customized. Each of these solutions comes with varying modules and functionalities. This requires that you carry out thorough research from different AP automation solution providers. Some important features to look for include those that integrate with existing ERP or finance systems; are customizable, flexible and can scale as your business grows; include security features; use the latest technology such as artificial intelligence; and produce reports.
  5. Engage with a Vendor: After selecting several vendors whose solution sounds like a good fit, the next step is to request a discovery call or demo. At this time, the vendor should review your business AP processes and integration issues. This will help to find a vendor that can meet your specific requirements.
  6. Metrics: Have in place measures that will be used to check whether the AP automation meets the expected benefits. Some of the key performance indicators (KPIs) that should be tracked include time spent on each invoice, time taken to approve invoices, cost per invoice and number of payment errors.
  7. Change Management: It may be easy to install a new AP solution, but its success is dependent on proper change management. As happens every time new technology is implemented, users can be resistant when they are used to doing things a certain way. There are also fears of losing jobs or being replaced by technology. Hence, the users must be involved in the change process. If users resist, even investing in the best solution will not help. Users need to understand that automating the AP process will give them time to shift to higher-value work. They need to understand the advanced workflows and adjust to their roles under the new automated solution.

Bottom Line 

To find the best solution, you should prioritize the most crucial needs for your business. The major needs are accuracy, security, customization, integration with existing systems, data transparency and saving time.

Remember, automation does not automatically solve all your accounts payable problems. You need to first ensure that your AP process is optimized, as automation adds value to streamline processes.

Congress at Work: Infrastructure Spending, Hiring Veteran Health Heroes and Initiatives for Education, Childcare and Immigration

By Blog, Congress at Work

HR 3684, S 1031, S 894, S 108, HR 5376Infrastructure Investment and Jobs Act(HR 3684) – This legislation authorizes funding for federal highway, transit, safety, motor carrier, hazardous materials and rail programs of the Department of Transportation (DOT). The bill also addresses climate change with strategies to reduce the environmental impacts of the surface transportation system and facilitate the efficient use of federal resources. It was initially introduced on June 4; it passed in the House on July 1 and in the Senate on Aug. 10. It was passed again in the House in its final form on Nov. 5, and then was signed into law by the president on Nov. 15.

A bill to require the Comptroller General of the United States to conduct a study on disparities associated with race and ethnicity with respect to certain benefits administered by the Secretary of Veterans Affairs, and for other purposes. (S 1031) – This bill was introduced by Rep. Raphael Warnock (D-GA) on March 25. It passed in the House on Aug. 6, then in the Senate on Nov. 15. It is awaiting signature by the president. Within one year, a study must be conducted and Congress briefed on how race and ethnicity impact VA compensation benefits, disability ratings and the rejection of claims for VA benefits.

Hire Veteran Health Heroes Act of 2021 (S 894) – The purpose of this legislation is to identify separating service members in healthcare occupations and refer them for jobs at the VA. The bill was introduced by Sen. Mike Braun (R-IN) on March 23. It passed in the Senate on July 21, the House on Nov. 15 and is currently with the president.

A bill to authorize the Seminole Tribe of Florida to lease or transfer certain land, and for other purposes (S 108) – This legislation allows the Seminole Tribe of Florida to lease, sell, convey, warrant or transfer any real property it owns that is not held in trust by the United States. The bill was introduced by Sen. Marco Rubio (R-FL) on Jan. 28. It was passed in the Senate on May 26, in the House on Nov. 2 and is currently waiting to be signed into law by the president.

Build Back Better Act (HR 5376) – This bill is currently being debated in Congress as the second phase of President Biden’s effort to “build an economy from the bottom up and the middle out.” It includes funding for a wide array of initiatives, including education, labor, childcare, healthcare, taxes, immigration and the environment. Specifically, the legislation would provide for up to six semesters of free community college, free childcare for children under the age of 6, free universal preschool services, health benefits for eligible individuals who reside in states that have not expanded Medicaid, expand Medicare to cover dental, hearing and vision care; provide certain aliens with a path to permanent resident status (e.g., those who entered the United States as minors); and provide up to 12 weeks of paid family and medical leave. Funding mechanisms include increasing the tax rates for certain corporations and individuals with annual income over $400,000; and require the Department of Health and Human Services to negotiate maximum prices for certain brand-name drugs under Medicare. The bill was introduced by Rep. John Yarmuth (D-KY) on Sept. 27 and is currently under consideration in the House.