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4 min read

Anyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later with vague instructions. The whole thing should have been fixed a long time ago.

The IRS is finally doing something about it. Notice 2026-49 puts out four sample forms and a five-step procedure meant to bring some consistency to direct rollovers. Plans do not have to use them, and there is no safe harbor, but you can see where this is going.

The Problem Worth Solving

When you leave a job, you have to figure out what to do with your 401(k). You can cash it out and take the tax hit. You can leave it sitting there. Or you can roll it into a new employer’s plan or an IRA.

A direct rollover is usually the way to go. The money travels straight from the old plan to the new one without ever hitting your bank account, which keeps things clean and avoids the 60-day deadline you face if you take possession yourself.

The trouble is that every plan does things differently. A 2024 GAO study found that roughly one in three people doing rollovers ended up with a paper check in hand that they were supposed to forward themselves. Checks get lost. They sit on the counter for weeks. And the whole time, that money is not invested anywhere.

How the New System Works

Here is what Treasury is proposing. You fill out Form 1 and give it to the plan or IRA that will be receiving your money. That form lets the receiving plan reach out to your old plan and handle the transfer on your behalf. The two plans swap Forms 2 through 4 to make sure everything is in order. If something goes sideways, the receiving plan has to tell you.

The IRS wants this done electronically whenever possible. When electronic is not an option, the old plan should write a check payable to the receiving plan for your benefit and mail it directly there. No more sending checks to participants and hoping they take it from there.

Tax Rules Stay the Same

None of this changes how rollovers are taxed. Eligible distributions that complete a proper rollover still stay out of income. You still cannot roll over a required minimum distribution. Pre-tax money stays pre-tax. Roth stays Roth. This is about the plumbing, not the tax code.

IRA-to-IRA transfers are not covered here. Those already go through the ACATS electronic system, so Treasury left them alone.

No Safe Harbor Yet

Plans can use these forms, change them, or ignore them completely. Right now, there is no reward for following along.

That could change. Treasury says it is thinking about offering safe harbors down the road. A receiving plan that uses the standard forms might eventually be allowed to assume the rollover is valid unless something looks off. That would give administrators a real incentive to adopt the new process.

Conclusion and What Comes Next

The IRS has hinted at bigger changes. Future guidance might require electronic transfers across the board, kill off the practice of mailing checks to participants, and get rid of some of the procedural friction that slows things down.

For now, the sample forms are sitting in the appendix of Notice 2026-49. They are there if you want them. If you have ever spent weeks tracking down a check that went to the wrong address or trying to explain one plan’s process to another plan’s administrator, you understand what Treasury is trying to fix. They want rollovers to be faster, simpler, and harder to mess up. This is a start.

Rolling Over Your 401(k) Just Got Less Painful – Here’s What the IRS Changed

October 1, 2026  ·  Blog, Tax and Financial News

4 min read

Anyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later with vague instructions. The whole thing should have been fixed a long time ago.

The IRS is finally doing something about it. Notice 2026-49 puts out four sample forms and a five-step procedure meant to bring some consistency to direct rollovers. Plans do not have to use them, and there is no safe harbor, but you can see where this is going.

The Problem Worth Solving

When you leave a job, you have to figure out what to do with your 401(k). You can cash it out and take the tax hit. You can leave it sitting there. Or you can roll it into a new employer’s plan or an IRA.

A direct rollover is usually the way to go. The money travels straight from the old plan to the new one without ever hitting your bank account, which keeps things clean and avoids the 60-day deadline you face if you take possession yourself.

The trouble is that every plan does things differently. A 2024 GAO study found that roughly one in three people doing rollovers ended up with a paper check in hand that they were supposed to forward themselves. Checks get lost. They sit on the counter for weeks. And the whole time, that money is not invested anywhere.

How the New System Works

Here is what Treasury is proposing. You fill out Form 1 and give it to the plan or IRA that will be receiving your money. That form lets the receiving plan reach out to your old plan and handle the transfer on your behalf. The two plans swap Forms 2 through 4 to make sure everything is in order. If something goes sideways, the receiving plan has to tell you.

The IRS wants this done electronically whenever possible. When electronic is not an option, the old plan should write a check payable to the receiving plan for your benefit and mail it directly there. No more sending checks to participants and hoping they take it from there.

Tax Rules Stay the Same

None of this changes how rollovers are taxed. Eligible distributions that complete a proper rollover still stay out of income. You still cannot roll over a required minimum distribution. Pre-tax money stays pre-tax. Roth stays Roth. This is about the plumbing, not the tax code.

IRA-to-IRA transfers are not covered here. Those already go through the ACATS electronic system, so Treasury left them alone.

No Safe Harbor Yet

Plans can use these forms, change them, or ignore them completely. Right now, there is no reward for following along.

That could change. Treasury says it is thinking about offering safe harbors down the road. A receiving plan that uses the standard forms might eventually be allowed to assume the rollover is valid unless something looks off. That would give administrators a real incentive to adopt the new process.

Conclusion and What Comes Next

The IRS has hinted at bigger changes. Future guidance might require electronic transfers across the board, kill off the practice of mailing checks to participants, and get rid of some of the procedural friction that slows things down.

For now, the sample forms are sitting in the appendix of Notice 2026-49. They are there if you want them. If you have ever spent weeks tracking down a check that went to the wrong address or trying to explain one plan’s process to another plan’s administrator, you understand what Treasury is trying to fix. They want rollovers to be faster, simpler, and harder to mess up. This is a start.

---

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.

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3 min read

According to Fitch Ratings, over the past 12 months ending August 2026, there were 109 defaults by 89 entities, compared to the same period ending July 2026, when 83 entities saw 105 defaults. With businesses (especially life insurers) exposed to asset management risks, it’s important to understand how to find financial balance.

Defining Asset Valuation Reserve (AVR)

An AVR is a repository for life insurance companies to offset a drop in markets and/or asset portfolios that are meant to fulfill contractual obligations for claims, annuities, and related insurance obligations.

According to the American Council of Life Insurers and the National Association of Insurance Commissioners (NAIC), the AVR factors in every realized investment profit and loss after factoring in net deferred taxes for credit and equity investments. Companies are required to fund the AVR initially and adjust it annually to manage ongoing and future obligations.

As part of the agreement that insurance companies have to pay out an insurance claim in exchange for receiving premiums, an insurance company has to ensure they are financially solvent to keep paying out claims. The same requirement also pertains to annuities that an insurance company contracts with customers, including making periodic payments. Through the valuation reserve requirements, insurance companies can measure their reserves and investments to increase the chance they’ll be able to meet their financial obligations regularly.   

Depending on the interest rate environment, insurance companies can experience threats to their allocated reserves to continue annuity payments over time compared to life benefits paid out all at once. Based on the American Council of Life Insurers, the percentage in reserves for annuities increased to 23 percent in 1990, up from 8 percent in 1980, showing how insurers must keep up with client demands and manage risk.    

How it’s Constructed

An AVR creates an organized set of entries for the assets and liabilities. Insurance companies are also able to compare assets and liabilities against actuarial valuation standards to plan for projected unknown, unsettled asset shortfalls. It also helps companies monitor the appropriate detection of long-term anticipated stock investment proceeds. For publicly traded insurance companies, it provides greater transparency for equity and bond holders, along with regulators.

The default component accounts for four-fifths of the AVR. Insurance companies implement investment vehicles such as mortgages and fixed-income options to manage their credit risk. As the name implies, the equity piece of the AVR balances the reserve with preferred and common equities or stocks, along with real estate investments. This mix is required for insurance companies because it creates a buffer from gains realized from positive market years, which offset insurance company obligations during periods of negative market performance.

Building the AVR is unique to each company’s financial makeup and needs to be dynamic, but must follow industry standards. While insurers or any market participant cannot predict the market with 100 percent accuracy, insurers with a properly constructed and reported AVR can more easily navigate an economy that becomes turbulent and uncertain.

Sources

https://www.fitchratings.com/research/corporate-finance/fitch-ratings-us-private-credit-default-rate-rose-to-6-3-in-august-2026-14-09-2026

https://www.acli.com/-/media/ACLI/Files/Fact-BooksPublic/2019FLifeInsurersFactBook.ashx?la=en

https://content.naic.org/sites/default/files/call_materials/4%20-%20AVR%20IMR%20Final%20Rept%20to%20NAIC%20%20Dec%202002.pdf

Valuation Reserve Requirements

October 1, 2026  ·  Blog, General Business News

3 min read

According to Fitch Ratings, over the past 12 months ending August 2026, there were 109 defaults by 89 entities, compared to the same period ending July 2026, when 83 entities saw 105 defaults. With businesses (especially life insurers) exposed to asset management risks, it’s important to understand how to find financial balance.

Defining Asset Valuation Reserve (AVR)

An AVR is a repository for life insurance companies to offset a drop in markets and/or asset portfolios that are meant to fulfill contractual obligations for claims, annuities, and related insurance obligations.

According to the American Council of Life Insurers and the National Association of Insurance Commissioners (NAIC), the AVR factors in every realized investment profit and loss after factoring in net deferred taxes for credit and equity investments. Companies are required to fund the AVR initially and adjust it annually to manage ongoing and future obligations.

As part of the agreement that insurance companies have to pay out an insurance claim in exchange for receiving premiums, an insurance company has to ensure they are financially solvent to keep paying out claims. The same requirement also pertains to annuities that an insurance company contracts with customers, including making periodic payments. Through the valuation reserve requirements, insurance companies can measure their reserves and investments to increase the chance they’ll be able to meet their financial obligations regularly.   

Depending on the interest rate environment, insurance companies can experience threats to their allocated reserves to continue annuity payments over time compared to life benefits paid out all at once. Based on the American Council of Life Insurers, the percentage in reserves for annuities increased to 23 percent in 1990, up from 8 percent in 1980, showing how insurers must keep up with client demands and manage risk.    

How it’s Constructed

An AVR creates an organized set of entries for the assets and liabilities. Insurance companies are also able to compare assets and liabilities against actuarial valuation standards to plan for projected unknown, unsettled asset shortfalls. It also helps companies monitor the appropriate detection of long-term anticipated stock investment proceeds. For publicly traded insurance companies, it provides greater transparency for equity and bond holders, along with regulators.

The default component accounts for four-fifths of the AVR. Insurance companies implement investment vehicles such as mortgages and fixed-income options to manage their credit risk. As the name implies, the equity piece of the AVR balances the reserve with preferred and common equities or stocks, along with real estate investments. This mix is required for insurance companies because it creates a buffer from gains realized from positive market years, which offset insurance company obligations during periods of negative market performance.

Building the AVR is unique to each company’s financial makeup and needs to be dynamic, but must follow industry standards. While insurers or any market participant cannot predict the market with 100 percent accuracy, insurers with a properly constructed and reported AVR can more easily navigate an economy that becomes turbulent and uncertain.

Sources

https://www.fitchratings.com/research/corporate-finance/fitch-ratings-us-private-credit-default-rate-rose-to-6-3-in-august-2026-14-09-2026

https://www.acli.com/-/media/ACLI/Files/Fact-BooksPublic/2019FLifeInsurersFactBook.ashx?la=en

https://content.naic.org/sites/default/files/call_materials/4%20-%20AVR%20IMR%20Final%20Rept%20to%20NAIC%20%20Dec%202002.pdf

---

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.

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6 min read

The purpose of estate planning is to distribute your assets to heirs in a formal, legal process. If you do not have any heirs to speak of, you might not feel the need to do this. However, your assets will go somewhere, so you may want to have control over that before the state steps in to decide for you.

Without a formal will, the general rule for inheritance distribution starts with a surviving spouse and children (who often share the estate), followed by grandchildren, parents, siblings, nephews and nieces, grandparents, then other extended relatives such as aunts, uncles and cousins. The exact order varies by state. Note that ex-spouses, and in most states stepchildren, receive nothing under standard state inheritance laws; they must be specified in a will or trust document, or named as an account beneficiary, to receive any consideration.

This means that, without a will or close family heir, your assets could go to an estranged sibling or even a cousin you’ve never met. If you have absolutely no family left when you pass on, the proceeds generally go to the state through a process called escheat (this includes funds from physical assets that are auctioned off).

Start with Living Matters

Before you start allocating where your assets go after your death, first complete paperwork assigning people to manage your assets if you ever become incapacitated while still alive. The key documents include:

• Durable Power of Attorney (DPOA) – this document names an agent, such as a trusted friend, attorney, or bank trust department, to take over managing your financial and legal affairs if you are deemed unable.
• Health Care Directive – authorizes someone to make medical decisions on your behalf when you are unable.
• Living Will – details what life-saving procedures and treatments you would and would not like to receive in order to keep you alive. Separately, a DNR (do not resuscitate) order, signed by your physician, directs medical staff not to perform CPR if your heart or breathing stops.

Choose Your Estate Manager

Your will should assign an executor to manage your estate once you pass away. Again, this can be a friend or a custodian (e.g., bank, attorney, financial advisor). This person is responsible for initiating probate court proceedings and distributing assets as dictated by your will. Responsibilities may include notifying your landlord/lender(s), utility providers, banks, credit card companies, investments, and insurance companies of your passing, as well as managing the sale of any property you own. Most states allow any competent adult to serve as executor, including the attorney who drafted your will, though some states restrict people with felony convictions or those who live out of state.

It behooves the heirless to consider estate planning to better allocate funds toward people or causes they care about, such as friends, coworkers, or charities. For example:

• Animal shelter or humane society
• Local church or other religious institution
• The public library
• The Public Broadcasting Service (PBS)
• A local land trust, the World Wildlife Fund or other conservation organizations
• A favorite city institution, such as a museum, zoo, symphony, ballet or theater
• Scholarship fund for your alma mater – K-12 or university
• YMCA or Jewish community center
• Medical institutions, such as local clinics, St. Jude Children’s Research Hospital, Planned Parenthood, cancer or other disease research
• Charities for children, such as the National Center for Missing & Exploited Children or Children’s Health Fund

If nothing local appeals, browse options at websites such as CharityWatch.org, a website dedicated to assessing how efficiently charities use donations.

Note that retirement accounts and life insurance policies generally request a beneficiary, and many bank and brokerage accounts allow one. You may not even remember that when you opened an account years ago, you listed your boyfriend or wife at the time as your beneficiary, even though that person is now your ex. Be aware that these beneficiary designations supersede any will instructions. These assets pass directly to the named beneficiary outside of probate, without going through your executor. Be sure to check and confirm your beneficiary designations while you are still alive to eliminate this issue. Many states automatically revoke an ex-spouse’s designation after a divorce, but that rule generally does not apply to employer retirement plans such as 401(k)s, so an ex could still collect. If no beneficiary is named, the account typically becomes part of your estate and goes through probate.

Charitable Donations

For people with substantial assets who want to leave money to one or more charities, sophisticated philanthropic vehicles include:

• Charitable remainder trust – The money is deposited into a trust while you are still alive. You receive an immediate tax deduction based on the present value of the charity’s future share (the remainder interest) of this irrevocable trust, as well as an income stream from the trust for life or for a set term of up to 20 years. When the trust ends, whatever charity you designate receives the remaining assets.
• Donor-advised funds – You make an irrevocable, tax-deductible contribution of cash, securities, or appreciated noncash assets to a fund, which is professionally managed for future growth. You may recommend money be granted to a qualified 501(c)(3) charity over time, basically leaving a legacy that continues to give.
• Private foundations – You can actually start your own charitable organization with an initial tax-deductible gift and appoint a board of directors or trustees (who may receive reasonable compensation) to manage and distribute assets according to your wishes. Foundations can make grants beyond public charities in limited cases, but only under strict IRS rules. They must also distribute at least 5 percent of their assets each year and pay an excise tax on investment income, and donors face lower deduction limits than for gifts to public charities.

It is best to consult with a financial advisor, tax professional, or estate planning attorney with experience in setting up a sophisticated charitable giving plan to make the most of your contributions.

Heirless Estate Planning

October 1, 2026  ·  Blog, Financial Planning

6 min read

The purpose of estate planning is to distribute your assets to heirs in a formal, legal process. If you do not have any heirs to speak of, you might not feel the need to do this. However, your assets will go somewhere, so you may want to have control over that before the state steps in to decide for you.

Without a formal will, the general rule for inheritance distribution starts with a surviving spouse and children (who often share the estate), followed by grandchildren, parents, siblings, nephews and nieces, grandparents, then other extended relatives such as aunts, uncles and cousins. The exact order varies by state. Note that ex-spouses, and in most states stepchildren, receive nothing under standard state inheritance laws; they must be specified in a will or trust document, or named as an account beneficiary, to receive any consideration.

This means that, without a will or close family heir, your assets could go to an estranged sibling or even a cousin you’ve never met. If you have absolutely no family left when you pass on, the proceeds generally go to the state through a process called escheat (this includes funds from physical assets that are auctioned off).

Start with Living Matters

Before you start allocating where your assets go after your death, first complete paperwork assigning people to manage your assets if you ever become incapacitated while still alive. The key documents include:

• Durable Power of Attorney (DPOA) – this document names an agent, such as a trusted friend, attorney, or bank trust department, to take over managing your financial and legal affairs if you are deemed unable.
• Health Care Directive – authorizes someone to make medical decisions on your behalf when you are unable.
• Living Will – details what life-saving procedures and treatments you would and would not like to receive in order to keep you alive. Separately, a DNR (do not resuscitate) order, signed by your physician, directs medical staff not to perform CPR if your heart or breathing stops.

Choose Your Estate Manager

Your will should assign an executor to manage your estate once you pass away. Again, this can be a friend or a custodian (e.g., bank, attorney, financial advisor). This person is responsible for initiating probate court proceedings and distributing assets as dictated by your will. Responsibilities may include notifying your landlord/lender(s), utility providers, banks, credit card companies, investments, and insurance companies of your passing, as well as managing the sale of any property you own. Most states allow any competent adult to serve as executor, including the attorney who drafted your will, though some states restrict people with felony convictions or those who live out of state.

It behooves the heirless to consider estate planning to better allocate funds toward people or causes they care about, such as friends, coworkers, or charities. For example:

• Animal shelter or humane society
• Local church or other religious institution
• The public library
• The Public Broadcasting Service (PBS)
• A local land trust, the World Wildlife Fund or other conservation organizations
• A favorite city institution, such as a museum, zoo, symphony, ballet or theater
• Scholarship fund for your alma mater – K-12 or university
• YMCA or Jewish community center
• Medical institutions, such as local clinics, St. Jude Children’s Research Hospital, Planned Parenthood, cancer or other disease research
• Charities for children, such as the National Center for Missing & Exploited Children or Children’s Health Fund

If nothing local appeals, browse options at websites such as CharityWatch.org, a website dedicated to assessing how efficiently charities use donations.

Note that retirement accounts and life insurance policies generally request a beneficiary, and many bank and brokerage accounts allow one. You may not even remember that when you opened an account years ago, you listed your boyfriend or wife at the time as your beneficiary, even though that person is now your ex. Be aware that these beneficiary designations supersede any will instructions. These assets pass directly to the named beneficiary outside of probate, without going through your executor. Be sure to check and confirm your beneficiary designations while you are still alive to eliminate this issue. Many states automatically revoke an ex-spouse’s designation after a divorce, but that rule generally does not apply to employer retirement plans such as 401(k)s, so an ex could still collect. If no beneficiary is named, the account typically becomes part of your estate and goes through probate.

Charitable Donations

For people with substantial assets who want to leave money to one or more charities, sophisticated philanthropic vehicles include:

• Charitable remainder trust – The money is deposited into a trust while you are still alive. You receive an immediate tax deduction based on the present value of the charity’s future share (the remainder interest) of this irrevocable trust, as well as an income stream from the trust for life or for a set term of up to 20 years. When the trust ends, whatever charity you designate receives the remaining assets.
• Donor-advised funds – You make an irrevocable, tax-deductible contribution of cash, securities, or appreciated noncash assets to a fund, which is professionally managed for future growth. You may recommend money be granted to a qualified 501(c)(3) charity over time, basically leaving a legacy that continues to give.
• Private foundations – You can actually start your own charitable organization with an initial tax-deductible gift and appoint a board of directors or trustees (who may receive reasonable compensation) to manage and distribute assets according to your wishes. Foundations can make grants beyond public charities in limited cases, but only under strict IRS rules. They must also distribute at least 5 percent of their assets each year and pay an excise tax on investment income, and donors face lower deduction limits than for gifts to public charities.

It is best to consult with a financial advisor, tax professional, or estate planning attorney with experience in setting up a sophisticated charitable giving plan to make the most of your contributions.

---

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.

Print

3 min read

Temps are dropping, the leaves are turning, and you know what that means: Fall is here, which is the best time to prepare your house for the chill that follows. But we all know that keeping warm takes energy and, yes, is costly. Here are a few easy ways to conserve.

Fix stuff around your house. These are simple and might require a little elbow grease on your part, but they’re well worth it because they help your house stay warmer, eliminate drafts, and help your heater work more efficiently.

• Seal gaps around your windows and doors with caulk or weatherstripping. 
• Close fireplace dampers when you’re not using them.
• Replace HVAC filters. For your furnace, this should be done one to three months before cold weather hits. It helps improve air quality (and air flow) inside your home.
• Add door sweeps to exterior doors.
• Reverse your ceiling fans; set them to clockwise and put them on a low setting to push the warm air down into the room.
• Hang thick(er) curtains so heat doesn’t seep out.
• Make sure vents and returns aren’t blocked by furniture or rugs.

Check your heating system. Before the Arctic blast arrives, these tasks are key:

• Schedule an HVAC inspection – aka a tune-up.
• Install a programmable or smart thermostat.
• Lower your thermostat by 7-10 degrees when you’re away.

Look at your insulation. These chores might require you to hire someone.

• Add attic insulation if your house is under-insulated so you can reduce your heating costs and keep your house toasty. (In fact, poor insulation is one of the biggest sources of energy loss.)
• Insulate pipes that are exposed, as well as your water heater.
• Seal and insulate all your ductwork in your attic, garage, and crawl spaces.

Inspect your water heater. Making sure you have warm water in the cooler months is critical. You’ll be quite happy not having to take cold showers, as well as not expending as much energy.

• Lower your water heater temperature to 120°F.
• Install low-flow showerheads.
• Fix dripping faucets immediately.

Examine the exterior of your house. Even the outside of your home needs attention.

• Clean gutters and downspouts to prevent ice dams, moisture problems, and foundation issues.
• Trim branches that could block winter sunlight from south-facing windows.
• Check for cracks where utilities enter the house and seal them.
• Check your roof, too, for signs of wear or damage.

Test your heating system early. Put this on your calendar! Don’t wait until it’s a tundra outside to turn on your furnace or heat pump.

• If you need repairs, schedule maintenance before HVAC companies get all booked up.

Check your smoke and carbon monoxide detectors. Don’t leave this unattended!

• Replace batteries if needed and test them all. You want to make sure your family’s safe during the upcoming heating season.

Even though fall is upon us, know this: Winter is coming, as the show famously claims. You can never be too prepared!

How to Save Energy This Fall

October 1, 2026  ·  Blog, Tip of the Month

3 min read

Temps are dropping, the leaves are turning, and you know what that means: Fall is here, which is the best time to prepare your house for the chill that follows. But we all know that keeping warm takes energy and, yes, is costly. Here are a few easy ways to conserve.

Fix stuff around your house. These are simple and might require a little elbow grease on your part, but they’re well worth it because they help your house stay warmer, eliminate drafts, and help your heater work more efficiently.

• Seal gaps around your windows and doors with caulk or weatherstripping. 
• Close fireplace dampers when you’re not using them.
• Replace HVAC filters. For your furnace, this should be done one to three months before cold weather hits. It helps improve air quality (and air flow) inside your home.
• Add door sweeps to exterior doors.
• Reverse your ceiling fans; set them to clockwise and put them on a low setting to push the warm air down into the room.
• Hang thick(er) curtains so heat doesn’t seep out.
• Make sure vents and returns aren’t blocked by furniture or rugs.

Check your heating system. Before the Arctic blast arrives, these tasks are key:

• Schedule an HVAC inspection – aka a tune-up.
• Install a programmable or smart thermostat.
• Lower your thermostat by 7-10 degrees when you’re away.

Look at your insulation. These chores might require you to hire someone.

• Add attic insulation if your house is under-insulated so you can reduce your heating costs and keep your house toasty. (In fact, poor insulation is one of the biggest sources of energy loss.)
• Insulate pipes that are exposed, as well as your water heater.
• Seal and insulate all your ductwork in your attic, garage, and crawl spaces.

Inspect your water heater. Making sure you have warm water in the cooler months is critical. You’ll be quite happy not having to take cold showers, as well as not expending as much energy.

• Lower your water heater temperature to 120°F.
• Install low-flow showerheads.
• Fix dripping faucets immediately.

Examine the exterior of your house. Even the outside of your home needs attention.

• Clean gutters and downspouts to prevent ice dams, moisture problems, and foundation issues.
• Trim branches that could block winter sunlight from south-facing windows.
• Check for cracks where utilities enter the house and seal them.
• Check your roof, too, for signs of wear or damage.

Test your heating system early. Put this on your calendar! Don’t wait until it’s a tundra outside to turn on your furnace or heat pump.

• If you need repairs, schedule maintenance before HVAC companies get all booked up.

Check your smoke and carbon monoxide detectors. Don’t leave this unattended!

• Replace batteries if needed and test them all. You want to make sure your family’s safe during the upcoming heating season.

Even though fall is upon us, know this: Winter is coming, as the show famously claims. You can never be too prepared!

---

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.

Print

4 min read

For years, corporate fraud was limited by the costs, expertise, and resources required to carry out a convincing deception. Artificial intelligence (AI) has changed this.

Today, AI can create realistic voices, videos, emails, invoices, identities, and customer interactions at a scale and speed that traditional fraud controls were never designed to address. AI-powered fraud is a governance, financial, and strategic risk – not just an IT problem.

The Evolution of Corporate Fraud

Fraud is no longer limited to static phishing emails. Threat actors, from organized criminal syndicates to rogue insiders, use large language models and advanced machine learning to execute complex, multilayered fraud schemes.

One of the most cited reference cases is the 2024 Arup incident. A finance employee at the engineering firm’s Hong Kong office was tricked into transferring about $25 million across multiple transactions after joining a video conference call with deepfake replicas of the company’s CFO and other colleagues. The fraud succeeded because it targeted the human authorization step, the exact step where financial controls assume identity can be trusted on sight and sound.

Beyond deepfake executives, new trends include synthetic vendor creation, where generative models fabricate entire corporate entities. Each comes complete with tax IDs, websites, regulatory filings, and executive profiles. They are used to infiltrate accounts payable systems. Bad actors also use machine learning to reverse-engineer enterprise anti-fraud algorithms, find blind spots, and execute micro-transactions that stay beneath detection thresholds.

Why the Numbers Should Worry Boards, Not Just Security Teams

AI-powered scams grew 1,210 percent in 2025, more than six times the growth rate of traditional fraud. Deepfake video scams alone went up 700 percent. The 2026 International AI Safety Report confirmed the tooling behind this is free or low-cost, requires no technical skills, and can be deployed anonymously.

The 2026 INTERPOL Global Financial Fraud Threat Assessment flagged AI-powered fraud as one of organized crime’s primary growth sectors. It reports that fraud alerts have risen 54 percent since 2024, with more than 1,500 cross-border cases involving $1.1 billion in lost assets.

The Regulatory Gap Executives Should Worry About

Regulation is accelerating, but it is not solving the fraud problem. The EU AI Act’s transparency provisions took effect Aug. 2. It requires the disclosure of AI-generated content, with penalties for noncompliance. As of July 2026, 48 states in the United States have enacted at least one deepfake-related law, according to Ballotpedia’s tracker. Yet none of these frameworks is really built for enterprise fraud. They target content moderation, disclosure, and non-consensual media. None directly addresses the authorization workflows attackers actually exploit. A company that is fully compliant with deepfake laws would still be exposed by the Arup scenario.

Regulators such as the Federal Trade Commission (FTC) have signaled that using AI to deceive is prosecutable under existing fraud statutes, but enforcement is reactive and case-by-case. Executives who treat fraud as just a criminal act rather than a governance failure arising from inadequate technical oversight face severe personal and corporate liability.

Strategic Challenges and Recommended Actions

Defending against AI-powered fraud requires rethinking how security spending is justified. Traditional ROI models rely on historical loss avoidance, but in the age of generative fraud, past losses are an unreliable predictor of future exposure.

The primary implementation challenge is friction versus security. Deploying stronger authentication and behavior monitoring across corporate touchpoints creates friction that employees and vendors resist. In addition, integrating AI defenses into legacy enterprise resource planning (ERP) systems creates technical debt. Organizations also struggle with data silos, even though fraud detection now requires real-time visibility across all departments.

To protect enterprise value, leadership teams should move from passive compliance to active resilience.

• Verify out of band. Require a callback to a known number and dual approval for large or unusual transfers. Never authorize a payment on a voice or video request alone.
• Strengthen authentication. Use multifactor cryptographic verification and zero-trust principles (verify every request, regardless of source). Treat biometrics with caution, since deepfakes can spoof them.
• Red-team for AI fraud. Have ethical hackers use generative AI to stress test internal systems and give the risk committee ownership of the results.
• Use AI to fight AI. Deploy monitoring tools that flag behavioral anomalies across internal communications, ledger entries, and vendor registries in real time.
• Establish cross-functional fraud task forces. Break down departmental silos and treat fraud detection as an integrated business process.

Future Outlook

As AI advances, the convergence of generative AI and autonomous software agents suggest that corporate fraud may increasingly be automated, including by self-directed AI agents operating as fraud syndicates. Business leaders must recognize that the future of corporate defense relies not on human vigilance alone, but on building resilient, self-healing digital ecosystems where trust is algorithmically verified and continuously audited. 

AI-Powered Corporate Fraud: What Business Leaders Need to Know

October 1, 2026  ·  Blog, What's New in Technology

4 min read

For years, corporate fraud was limited by the costs, expertise, and resources required to carry out a convincing deception. Artificial intelligence (AI) has changed this.

Today, AI can create realistic voices, videos, emails, invoices, identities, and customer interactions at a scale and speed that traditional fraud controls were never designed to address. AI-powered fraud is a governance, financial, and strategic risk – not just an IT problem.

The Evolution of Corporate Fraud

Fraud is no longer limited to static phishing emails. Threat actors, from organized criminal syndicates to rogue insiders, use large language models and advanced machine learning to execute complex, multilayered fraud schemes.

One of the most cited reference cases is the 2024 Arup incident. A finance employee at the engineering firm’s Hong Kong office was tricked into transferring about $25 million across multiple transactions after joining a video conference call with deepfake replicas of the company’s CFO and other colleagues. The fraud succeeded because it targeted the human authorization step, the exact step where financial controls assume identity can be trusted on sight and sound.

Beyond deepfake executives, new trends include synthetic vendor creation, where generative models fabricate entire corporate entities. Each comes complete with tax IDs, websites, regulatory filings, and executive profiles. They are used to infiltrate accounts payable systems. Bad actors also use machine learning to reverse-engineer enterprise anti-fraud algorithms, find blind spots, and execute micro-transactions that stay beneath detection thresholds.

Why the Numbers Should Worry Boards, Not Just Security Teams

AI-powered scams grew 1,210 percent in 2025, more than six times the growth rate of traditional fraud. Deepfake video scams alone went up 700 percent. The 2026 International AI Safety Report confirmed the tooling behind this is free or low-cost, requires no technical skills, and can be deployed anonymously.

The 2026 INTERPOL Global Financial Fraud Threat Assessment flagged AI-powered fraud as one of organized crime’s primary growth sectors. It reports that fraud alerts have risen 54 percent since 2024, with more than 1,500 cross-border cases involving $1.1 billion in lost assets.

The Regulatory Gap Executives Should Worry About

Regulation is accelerating, but it is not solving the fraud problem. The EU AI Act’s transparency provisions took effect Aug. 2. It requires the disclosure of AI-generated content, with penalties for noncompliance. As of July 2026, 48 states in the United States have enacted at least one deepfake-related law, according to Ballotpedia’s tracker. Yet none of these frameworks is really built for enterprise fraud. They target content moderation, disclosure, and non-consensual media. None directly addresses the authorization workflows attackers actually exploit. A company that is fully compliant with deepfake laws would still be exposed by the Arup scenario.

Regulators such as the Federal Trade Commission (FTC) have signaled that using AI to deceive is prosecutable under existing fraud statutes, but enforcement is reactive and case-by-case. Executives who treat fraud as just a criminal act rather than a governance failure arising from inadequate technical oversight face severe personal and corporate liability.

Strategic Challenges and Recommended Actions

Defending against AI-powered fraud requires rethinking how security spending is justified. Traditional ROI models rely on historical loss avoidance, but in the age of generative fraud, past losses are an unreliable predictor of future exposure.

The primary implementation challenge is friction versus security. Deploying stronger authentication and behavior monitoring across corporate touchpoints creates friction that employees and vendors resist. In addition, integrating AI defenses into legacy enterprise resource planning (ERP) systems creates technical debt. Organizations also struggle with data silos, even though fraud detection now requires real-time visibility across all departments.

To protect enterprise value, leadership teams should move from passive compliance to active resilience.

• Verify out of band. Require a callback to a known number and dual approval for large or unusual transfers. Never authorize a payment on a voice or video request alone.
• Strengthen authentication. Use multifactor cryptographic verification and zero-trust principles (verify every request, regardless of source). Treat biometrics with caution, since deepfakes can spoof them.
• Red-team for AI fraud. Have ethical hackers use generative AI to stress test internal systems and give the risk committee ownership of the results.
• Use AI to fight AI. Deploy monitoring tools that flag behavioral anomalies across internal communications, ledger entries, and vendor registries in real time.
• Establish cross-functional fraud task forces. Break down departmental silos and treat fraud detection as an integrated business process.

Future Outlook

As AI advances, the convergence of generative AI and autonomous software agents suggest that corporate fraud may increasingly be automated, including by self-directed AI agents operating as fraud syndicates. Business leaders must recognize that the future of corporate defense relies not on human vigilance alone, but on building resilient, self-healing digital ecosystems where trust is algorithmically verified and continuously audited. 

---

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.

Print

4 min read

Continuing Appropriations and Extensions Act, 2027 (HR 6500) – This appropriations bill was finalized and passed by both the House and the Senate on Sept. 1. The act funds the fiscal year 2027 government budget through Dec. 11 at current levels. It was signed by the President on Sept. 2.

Prison Staff Safety Enhancement Act (S 307) – This bill is designed to address sexual harassment and sexual assault of Bureau of Prisons correctional officers and other staff by incarcerated prisoners. Specifically, it details national standards for the prevention, reduction, and punishment of perpetrators. The legislation was introduced by Sen. Marsha Blackburn (R-TN) on Jan. 29, 2025. It passed in the Senate on April 29, 2025; in the House on Aug. 31; and was enacted by the president on Sept. 16.

Retire through Ownership Act (S 2403) – Introduced by Sen. Roger Marshall (R-KS) on July 23, 2025, this bill amends the Employee Retirement Income Security Act of 1974. ESOPs are Employee Stock Ownership Plans that enable employees to accrue shares of their employers’ stock as part of a pension plan, in which they receive the cash value of their shares upon retirement. This bill clearly defines how a good-faith valuation should be determined by independent professional appraisers, based on IRS Revenue Ruling 59-60 for valuing privately held stock. In the past, ambiguous valuation methods have resulted in litigation. This act passed in the Senate on October 9, 2025, and in the House on Sept. 16. It currently awaits the president’s signature.

Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (HR 5334) – This largely bipartisan act was championed by the late Sen. Lindsey Graham (R-SC). The legislation imposes a variety of sanctions, tariffs, and prohibitions related to Russia and Iran, and explicitly prohibits U.S. persons from making new investments in Russia. It also expands the tax deduction for early childhood education teachers for classroom expenses. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). It passed in the House on April 27 and in the Senate on Aug. 7, with final changes agreed upon on Sept. 16. The president signed the bill into law a day later.

Digital Asset Market Clarity Act (HR 3633) – Known as the Clarity Act, the purpose of this Trump Administration-backed bill is to implement the first regulations for the crypto sector. The bill was introduced by Rep. French Hill (R-AR) on May 29, 2025. It passed in the House on July 17, 2025. However, opponents of the bill say the industry-led standards are far too lenient and do not provide enough safeguards. The bill recently failed in the Senate after a party-line cloture vote, which means the debate ended before the floor could vote on the bill (considered a filibuster). The cloture vote does not rule out the Senate trying again at a later date.

Ratepayer Protection Act (HR 9340) – In an effort to rein in AI data center utility costs, this bill would require state utilities to consider adopting standards to ensure cost recovery for the generation, transmission, and distribution services of large-load electricity customers. This high-stakes, bipartisan issue comes ahead of the midterm elections in an effort to assure voters that local data centers will not ramp up local residents’ utility bills. The legislation was introduced by Rep. Gabe Evans (R-CO) on June 18. It passed in the House on Sept. 16 and currently resides in the Senate.

Stopping Political Discrimination in Disaster Assistance Act (HR 1342) – Current law states that federal major disaster emergency relief and assistance must be provided without discrimination on the basis of race, color, religion, nationality, sex, age, disability, English proficiency or economic status. The bill, introduced by Rep. Scott Perry (R-PA) on Feb. 13, 2025, would add political affiliation protection under this requirement. The act passed in the House on Sept. 16 and awaits consideration in the Senate.

Pre-Election Focus on Russian/Iran Sanctions, AI Utility Bills, Crypto Regulation and Nondiscriminatory FEMA Assistance

October 1, 2026  ·  Blog, Congress at Work

4 min read

Continuing Appropriations and Extensions Act, 2027 (HR 6500) – This appropriations bill was finalized and passed by both the House and the Senate on Sept. 1. The act funds the fiscal year 2027 government budget through Dec. 11 at current levels. It was signed by the President on Sept. 2.

Prison Staff Safety Enhancement Act (S 307) – This bill is designed to address sexual harassment and sexual assault of Bureau of Prisons correctional officers and other staff by incarcerated prisoners. Specifically, it details national standards for the prevention, reduction, and punishment of perpetrators. The legislation was introduced by Sen. Marsha Blackburn (R-TN) on Jan. 29, 2025. It passed in the Senate on April 29, 2025; in the House on Aug. 31; and was enacted by the president on Sept. 16.

Retire through Ownership Act (S 2403) – Introduced by Sen. Roger Marshall (R-KS) on July 23, 2025, this bill amends the Employee Retirement Income Security Act of 1974. ESOPs are Employee Stock Ownership Plans that enable employees to accrue shares of their employers’ stock as part of a pension plan, in which they receive the cash value of their shares upon retirement. This bill clearly defines how a good-faith valuation should be determined by independent professional appraisers, based on IRS Revenue Ruling 59-60 for valuing privately held stock. In the past, ambiguous valuation methods have resulted in litigation. This act passed in the Senate on October 9, 2025, and in the House on Sept. 16. It currently awaits the president’s signature.

Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (HR 5334) – This largely bipartisan act was championed by the late Sen. Lindsey Graham (R-SC). The legislation imposes a variety of sanctions, tariffs, and prohibitions related to Russia and Iran, and explicitly prohibits U.S. persons from making new investments in Russia. It also expands the tax deduction for early childhood education teachers for classroom expenses. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). It passed in the House on April 27 and in the Senate on Aug. 7, with final changes agreed upon on Sept. 16. The president signed the bill into law a day later.

Digital Asset Market Clarity Act (HR 3633) – Known as the Clarity Act, the purpose of this Trump Administration-backed bill is to implement the first regulations for the crypto sector. The bill was introduced by Rep. French Hill (R-AR) on May 29, 2025. It passed in the House on July 17, 2025. However, opponents of the bill say the industry-led standards are far too lenient and do not provide enough safeguards. The bill recently failed in the Senate after a party-line cloture vote, which means the debate ended before the floor could vote on the bill (considered a filibuster). The cloture vote does not rule out the Senate trying again at a later date.

Ratepayer Protection Act (HR 9340) – In an effort to rein in AI data center utility costs, this bill would require state utilities to consider adopting standards to ensure cost recovery for the generation, transmission, and distribution services of large-load electricity customers. This high-stakes, bipartisan issue comes ahead of the midterm elections in an effort to assure voters that local data centers will not ramp up local residents’ utility bills. The legislation was introduced by Rep. Gabe Evans (R-CO) on June 18. It passed in the House on Sept. 16 and currently resides in the Senate.

Stopping Political Discrimination in Disaster Assistance Act (HR 1342) – Current law states that federal major disaster emergency relief and assistance must be provided without discrimination on the basis of race, color, religion, nationality, sex, age, disability, English proficiency or economic status. The bill, introduced by Rep. Scott Perry (R-PA) on Feb. 13, 2025, would add political affiliation protection under this requirement. The act passed in the House on Sept. 16 and awaits consideration in the Senate.

 

---

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.

Print

4 min read

Picture two couples, each with a baby born this year, each routing $2,500 of salary into that child’s Trump Account through an employer’s payroll system. One couple sits in the 35% bracket. The other, at roughly $65,000 of taxable income, is in the 12% bracket. Both contributions escape federal income tax. The first couple’s bill shrinks by $875. The second couple’s bill shrinks by $300. Same account, same dollars, nearly three times the benefit for the household that needed it less.

That arithmetic is the quiet story inside what has been presented as a workplace convenience.

Congress Built the Benefit – The IRS Just Wrote the Manual

The One Big Beautiful Bill Act already let employers put up to $2,500 a year into an employee’s or a dependent’s Trump Account without adding to the worker’s income, and it already allowed a company to run that contribution through a Section 125 cafeteria plan so the employee funds a child’s account out of pre-tax salary. Employers could begin on July 4, 2026. What Treasury and the IRS published on Aug. 11 is the operating manual: how to structure the program, how nondiscrimination testing works, and a safe harbor for companies that want to match the government’s $1,000.

The Break Stops at the Income Tax Line

It is easy to overstate what “pre-tax” buys here. The exclusion applies to federal income tax only. The money stays wages for Social Security, Medicare, and unemployment tax purposes. So, the savings amount to nothing more than the sum deferred multiplied by the filer’s top income tax rate, which is precisely why $2,500 is worth $875 to a 35% taxpayer and $300 to a 12% taxpayer.

Postponed for Decades, Not Years

Nor is the tax forgiven. Nothing can be withdrawn throughout the rule’s growth period, which runs until January 1 of the year the child turns 18. From that date, the account behaves like any other traditional IRA, meaning a 10% additional tax on distributions taken before age 59½ unless an exception applies, on top of ordinary income tax. The realistic horizon is four decades or more, not the college fund some families picture.

On the basics: Trump Accounts, Section 530A of the code, came out of last year’s OBBBA. A child who is a U.S. citizen born from 2025 through 2028 can receive a one-time $1,000 federal deposit, though it is not automatic. A parent has to open the account and elect the deposit on Form 4547, and the child needs a Social Security number. Contributions from all sources top out at $5,000 a year at current levels, indexed for inflation after 2027. The money must sit in a fund tracking a broad index of mostly U.S. stocks, with no leverage and fees capped at a tenth of a percent.

Taxation on the way out follows the money’s path in. Dollars contributed with after-tax income create basis and come back untaxed. Everything else, meaning the federal $1,000, employer contributions, pre-tax payroll elections and all investment earnings, is ordinary income when withdrawn.

Not Every Parent Will Get the Chance

Access tilts the same direction. Mercer surveyed close to 350 employers in April and found roughly 4% expecting to launch a contribution program in 2026 or 2027, with about two-thirds ruling it out. Adoption skews toward large firms with real benefits infrastructure, the same employers already offering generous 401(k) matches. A parent at a small company may never see the option. Anyone self-employed is excluded by rule: partners, sole proprietors, and more-than-2% S corporation shareholders cannot make the pre-tax election even if their own company sponsors a program for its common-law employees.

There is a planning burden, too. Households with finite savings already ration dollars across retirement accounts, 529 plans and emergency reserves. A pre-tax Trump Account election adds another comparison, and the families most likely to get it right are the ones who can afford advice.

Conclusion

The regulations are proposals. Written comments close Sept. 25, and a hearing is set for Oct. 15, so the final text could shift. Employers may rely on the proposed rules in the meantime. What is unlikely to shift is the underlying arithmetic. The $1,000 from Treasury lands identically in every eligible child’s account. The pre-tax payroll option does not, and its value climbs with the parent’s bracket.

New Trump Account Updates

September 1, 2026  ·  Blog, Tax and Financial News

4 min read

Picture two couples, each with a baby born this year, each routing $2,500 of salary into that child’s Trump Account through an employer’s payroll system. One couple sits in the 35% bracket. The other, at roughly $65,000 of taxable income, is in the 12% bracket. Both contributions escape federal income tax. The first couple’s bill shrinks by $875. The second couple’s bill shrinks by $300. Same account, same dollars, nearly three times the benefit for the household that needed it less.

That arithmetic is the quiet story inside what has been presented as a workplace convenience.

Congress Built the Benefit – The IRS Just Wrote the Manual

The One Big Beautiful Bill Act already let employers put up to $2,500 a year into an employee’s or a dependent’s Trump Account without adding to the worker’s income, and it already allowed a company to run that contribution through a Section 125 cafeteria plan so the employee funds a child’s account out of pre-tax salary. Employers could begin on July 4, 2026. What Treasury and the IRS published on Aug. 11 is the operating manual: how to structure the program, how nondiscrimination testing works, and a safe harbor for companies that want to match the government’s $1,000.

The Break Stops at the Income Tax Line

It is easy to overstate what “pre-tax” buys here. The exclusion applies to federal income tax only. The money stays wages for Social Security, Medicare, and unemployment tax purposes. So, the savings amount to nothing more than the sum deferred multiplied by the filer’s top income tax rate, which is precisely why $2,500 is worth $875 to a 35% taxpayer and $300 to a 12% taxpayer.

Postponed for Decades, Not Years

Nor is the tax forgiven. Nothing can be withdrawn throughout the rule’s growth period, which runs until January 1 of the year the child turns 18. From that date, the account behaves like any other traditional IRA, meaning a 10% additional tax on distributions taken before age 59½ unless an exception applies, on top of ordinary income tax. The realistic horizon is four decades or more, not the college fund some families picture.

On the basics: Trump Accounts, Section 530A of the code, came out of last year’s OBBBA. A child who is a U.S. citizen born from 2025 through 2028 can receive a one-time $1,000 federal deposit, though it is not automatic. A parent has to open the account and elect the deposit on Form 4547, and the child needs a Social Security number. Contributions from all sources top out at $5,000 a year at current levels, indexed for inflation after 2027. The money must sit in a fund tracking a broad index of mostly U.S. stocks, with no leverage and fees capped at a tenth of a percent.

Taxation on the way out follows the money’s path in. Dollars contributed with after-tax income create basis and come back untaxed. Everything else, meaning the federal $1,000, employer contributions, pre-tax payroll elections and all investment earnings, is ordinary income when withdrawn.

Not Every Parent Will Get the Chance

Access tilts the same direction. Mercer surveyed close to 350 employers in April and found roughly 4% expecting to launch a contribution program in 2026 or 2027, with about two-thirds ruling it out. Adoption skews toward large firms with real benefits infrastructure, the same employers already offering generous 401(k) matches. A parent at a small company may never see the option. Anyone self-employed is excluded by rule: partners, sole proprietors, and more-than-2% S corporation shareholders cannot make the pre-tax election even if their own company sponsors a program for its common-law employees.

There is a planning burden, too. Households with finite savings already ration dollars across retirement accounts, 529 plans and emergency reserves. A pre-tax Trump Account election adds another comparison, and the families most likely to get it right are the ones who can afford advice.

Conclusion

The regulations are proposals. Written comments close Sept. 25, and a hearing is set for Oct. 15, so the final text could shift. Employers may rely on the proposed rules in the meantime. What is unlikely to shift is the underlying arithmetic. The $1,000 from Treasury lands identically in every eligible child’s account. The pre-tax payroll option does not, and its value climbs with the parent’s bracket.

---

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.

Print

3 min read

According to the July 12, 2026, Consumer Price Index Release from the U.S. Bureau of Labor Statistics, the 12-month inflation rate rose by 3.4 percent, and the month-over-month measure rose by 0.1 percent in July 2026 compared to June 2026. With inflation higher than normal over the past few years compared to near-term historical averages, understanding how inflation is accounted for is essential for companies to interpret it properly. 

Defining Inflation & Accounting Needs

This reporting technique adjusts a business’ financial statements that accounts for inflation-related price changes. By adjusting for a price index, it updates financial statements to show a business’s true financial position and ensure consistency over time.

Whether it’s inflation or deflation, this type of accounting is used during periods of significant price fluctuations. It’s especially important for publicly traded, multinational corporations and how they report their finances since investors look at their performance on a quarter-over-quarter and year-over-year basis.

There are two primary methods: current purchasing power (CPP) and current cost accounting (CCA). CPP looks at monetary and nonmonetary items as separate spheres. Examples of monetary assets include cash, investments, accounts and notes receivable – essentially an asset that can be turned into a determinable monetary figure. Non-monetary assets can take the form of tangible assets like those in a business’ property, plant or equipment line item. Intellectual property and goodwill are other examples of non-monetary assets.

While nonmonetary items are indexed based upon a metric such as the Consumer Price Index (CPI), with the CPP method using historical costs as the baseline numbers, monetary items are evaluated to see what value the items may have gained or lost during the period analyzed. 

CCA analyzes asset values at their fair market value, not their historical cost or the price paid for assets when originally reported. The following example illustrates how the CPP model calculates it:

A company bought equipment in 2010 for $15,000 based upon a price index of 200, and in 2026 the established price index rose to 400. Based on taking the new price index of 400, divided by the previous price index of 200 (400/200 = 2), the original purchase price of $15,000 is to be multiplied by the conversion factor of 2 = $15,000 x 2 = $30,000.

When the company goes to account for it on their financial statements, it would be recorded on its balance sheet on the line item “closing equipment balance” for the $30,000.

Why Restating Financial Statements is Important

It’s important to ensure a business’ historical information is relevant, along with their financial statements providing internal and external audiences an accurate perspective of what inflation and deflation do. During periods of high inflation or deflation, if the data is not indexed accordingly, it’s inaccurate. The primary benefit is that business’ income and expenses are represented and comparable with other companies and historical information.  

While each business and its asset inventory is different, understanding how deflation and inflation impact businesses is an important consideration for daily operations and external audiences who may lend or invest in a company.

Understanding Inflation Accounting

September 1, 2026  ·  Blog, General Business News

3 min read

According to the July 12, 2026, Consumer Price Index Release from the U.S. Bureau of Labor Statistics, the 12-month inflation rate rose by 3.4 percent, and the month-over-month measure rose by 0.1 percent in July 2026 compared to June 2026. With inflation higher than normal over the past few years compared to near-term historical averages, understanding how inflation is accounted for is essential for companies to interpret it properly. 

Defining Inflation & Accounting Needs

This reporting technique adjusts a business’ financial statements that accounts for inflation-related price changes. By adjusting for a price index, it updates financial statements to show a business’s true financial position and ensure consistency over time.

Whether it’s inflation or deflation, this type of accounting is used during periods of significant price fluctuations. It’s especially important for publicly traded, multinational corporations and how they report their finances since investors look at their performance on a quarter-over-quarter and year-over-year basis.

There are two primary methods: current purchasing power (CPP) and current cost accounting (CCA). CPP looks at monetary and nonmonetary items as separate spheres. Examples of monetary assets include cash, investments, accounts and notes receivable – essentially an asset that can be turned into a determinable monetary figure. Non-monetary assets can take the form of tangible assets like those in a business’ property, plant or equipment line item. Intellectual property and goodwill are other examples of non-monetary assets.

While nonmonetary items are indexed based upon a metric such as the Consumer Price Index (CPI), with the CPP method using historical costs as the baseline numbers, monetary items are evaluated to see what value the items may have gained or lost during the period analyzed. 

CCA analyzes asset values at their fair market value, not their historical cost or the price paid for assets when originally reported. The following example illustrates how the CPP model calculates it:

A company bought equipment in 2010 for $15,000 based upon a price index of 200, and in 2026 the established price index rose to 400. Based on taking the new price index of 400, divided by the previous price index of 200 (400/200 = 2), the original purchase price of $15,000 is to be multiplied by the conversion factor of 2 = $15,000 x 2 = $30,000.

When the company goes to account for it on their financial statements, it would be recorded on its balance sheet on the line item “closing equipment balance” for the $30,000.

Why Restating Financial Statements is Important

It’s important to ensure a business’ historical information is relevant, along with their financial statements providing internal and external audiences an accurate perspective of what inflation and deflation do. During periods of high inflation or deflation, if the data is not indexed accordingly, it’s inaccurate. The primary benefit is that business’ income and expenses are represented and comparable with other companies and historical information.  

While each business and its asset inventory is different, understanding how deflation and inflation impact businesses is an important consideration for daily operations and external audiences who may lend or invest in a company.

---

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.

Print

5 min read

Bonds are designed to deliver both capital preservation and income, and are generally considered lower risk than stock investing. The purchase price of a bond is basically a loan to an issuer, such as the federal government, a municipal government, or a corporation. The term of the loan is determined for a specific period of time – referred to as the maturity date.

During that time, the issuer uses bond money to fund projects, and in return pays the buyer interest over the term of the loan. Once the term ends, the bond issuer pays back the money it borrowed (i.e., the purchase price). The interest is paid on a predetermined schedule – quarterly, semiannually, or annually. The interest rate on a bond is called the coupon rate, and it is fixed at the time of issuance and remains the same until the bond matures.

For example, say you purchase a 10-year bond for $10,000 with a coupon rate of 4 percent, paid twice a year.. Over the 10 years you’ll collect $4,000 in interest, and at maturity you get your $10,000 back. That’s a 40 percent cumulative return on the original investment.

Bonds with a maturity date of less than four years are considered short-term; between four and 10 years are considered intermediate-term bonds; and terms of 10 or more years are considered long-term bonds. Bonds can be useful in many ways, such as to provide income, save for a particular expense, or to seek out high interest rates for a higher total return. The following are a few bond strategies to address each type of objective.

Objective: Generate Income

To generate income over a long period of time – when interest rates tend to fluctuate – one strategy is to ladder bond holdings. This means purchasing a portfolio of individual bonds with varying maturity dates. For example, you may spread out your bond terms from one to 30 years – with each interval acting as a rung on this metaphorical ladder. Note that each type of bond is rated for the credit quality of the issuer, which reflects its likelihood of default. The lower the credit rating, the higher the interest paid to compensate for the issuer’s extra risk.

As each bond matures, you can reinvest money into another bond based on the current prices and coupon rates on offer at that time. This way you may continue to shop for higher coupon rates every few years without locking up all of your money for a 10-, 20-, or 30-year duration. When rates are on the rise, you can secure a higher yield as your bonds mature. If rates are falling, reinvest that money in a short-term bond as a holding pattern until coupon rates increase again. This way, you continue to benefit from owning longer-term bonds purchased when rates were higher. Barring any defaults, the ladder continues to grow and offer steady growth for bond assets.

Objective: Save for a Particular Expense

The Bullet strategy is a simple way to generate the money you need for a specific financial goal within a specific time frame – such as buying a house in five years, or saving for college or a retirement nest egg in 10 or 20 years. You basically purchase bonds with a similar maturity date. Between the purchase price and the generated income, you’ll know exactly how much you will receive when those bonds mature. It’s like shooting a bullet straight toward your financial goal.

Objective: Seek Higher Interest

The Barbell strategy splits your money between the two ends of the maturity range and skips the middle. You hold short-term bonds on one end and long-term bonds on the other, with little or nothing in between, much like the weights sitting at either end of a barbell.

The long end captures the higher coupon rates that generally come with committing money for a longer period. The short end keeps a portion of your money coming due on a regular basis, so each time one of those bonds matures, you can re-evaluate rates and decide where that money goes next. If rates have moved higher, shift it to the long end and lock in the better coupon. If rates remain tepid, buy another short-term bond and wait. The result is a portfolio that captures much of the yield available at the long end without committing everything to a rate you may later regret.

There are many different types of bonds, including federal government, municipal government, and corporate bonds. While government bonds are generally considered safe, each bond is issued a credit rating based on the issuer’s financial health, creditworthiness, and past history of repaying debt obligations. Investors also have the option to invest in bond funds, which offer a large selection of bonds and do not require investments to be held to maturity. However, bond fund interest rates fluctuate daily, and there is no guarantee the investor will receive the original principal amount when they cash out of the fund.

Bond Investment Strategies

September 1, 2026  ·  Blog, Financial Planning

5 min read

Bonds are designed to deliver both capital preservation and income, and are generally considered lower risk than stock investing. The purchase price of a bond is basically a loan to an issuer, such as the federal government, a municipal government, or a corporation. The term of the loan is determined for a specific period of time – referred to as the maturity date.

During that time, the issuer uses bond money to fund projects, and in return pays the buyer interest over the term of the loan. Once the term ends, the bond issuer pays back the money it borrowed (i.e., the purchase price). The interest is paid on a predetermined schedule – quarterly, semiannually, or annually. The interest rate on a bond is called the coupon rate, and it is fixed at the time of issuance and remains the same until the bond matures.

For example, say you purchase a 10-year bond for $10,000 with a coupon rate of 4 percent, paid twice a year.. Over the 10 years you’ll collect $4,000 in interest, and at maturity you get your $10,000 back. That’s a 40 percent cumulative return on the original investment.

Bonds with a maturity date of less than four years are considered short-term; between four and 10 years are considered intermediate-term bonds; and terms of 10 or more years are considered long-term bonds. Bonds can be useful in many ways, such as to provide income, save for a particular expense, or to seek out high interest rates for a higher total return. The following are a few bond strategies to address each type of objective.

Objective: Generate Income

To generate income over a long period of time – when interest rates tend to fluctuate – one strategy is to ladder bond holdings. This means purchasing a portfolio of individual bonds with varying maturity dates. For example, you may spread out your bond terms from one to 30 years – with each interval acting as a rung on this metaphorical ladder. Note that each type of bond is rated for the credit quality of the issuer, which reflects its likelihood of default. The lower the credit rating, the higher the interest paid to compensate for the issuer’s extra risk.

As each bond matures, you can reinvest money into another bond based on the current prices and coupon rates on offer at that time. This way you may continue to shop for higher coupon rates every few years without locking up all of your money for a 10-, 20-, or 30-year duration. When rates are on the rise, you can secure a higher yield as your bonds mature. If rates are falling, reinvest that money in a short-term bond as a holding pattern until coupon rates increase again. This way, you continue to benefit from owning longer-term bonds purchased when rates were higher. Barring any defaults, the ladder continues to grow and offer steady growth for bond assets.

Objective: Save for a Particular Expense

The Bullet strategy is a simple way to generate the money you need for a specific financial goal within a specific time frame – such as buying a house in five years, or saving for college or a retirement nest egg in 10 or 20 years. You basically purchase bonds with a similar maturity date. Between the purchase price and the generated income, you’ll know exactly how much you will receive when those bonds mature. It’s like shooting a bullet straight toward your financial goal.

Objective: Seek Higher Interest

The Barbell strategy splits your money between the two ends of the maturity range and skips the middle. You hold short-term bonds on one end and long-term bonds on the other, with little or nothing in between, much like the weights sitting at either end of a barbell.

The long end captures the higher coupon rates that generally come with committing money for a longer period. The short end keeps a portion of your money coming due on a regular basis, so each time one of those bonds matures, you can re-evaluate rates and decide where that money goes next. If rates have moved higher, shift it to the long end and lock in the better coupon. If rates remain tepid, buy another short-term bond and wait. The result is a portfolio that captures much of the yield available at the long end without committing everything to a rate you may later regret.

There are many different types of bonds, including federal government, municipal government, and corporate bonds. While government bonds are generally considered safe, each bond is issued a credit rating based on the issuer’s financial health, creditworthiness, and past history of repaying debt obligations. Investors also have the option to invest in bond funds, which offer a large selection of bonds and do not require investments to be held to maturity. However, bond fund interest rates fluctuate daily, and there is no guarantee the investor will receive the original principal amount when they cash out of the fund.

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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.

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4 min read

You’re doing well, earning a good salary. But somewhere around the latter part of the month, after you’ve paid your obligations and basically lived your life, which isn’t extravagant, you look at your checking and savings accounts, and well, there isn’t much there. And that sinking feeling starts to kick in. Sound familiar?

This is called lifestyle inflation. In a nutshell, the way you spend increases over time in relation to your rising income, so your financial floor rises right along with it. In fact, according to a Federal Reserve Survey of Consumer Finances, households that earn between $100,000 and $200,000 are in sizeable credit card debt, have retirement accounts that need help, and very little savings in relation to their income. What to do? Here are a few ways to get a handle on this.

Get a real number. You might have all your expenses in QuickBooks or the like and, on paper, you look good. But to get a real picture of how you’re doing, calculate the expected net worth you should have for someone at your age with your salary: Multiply your age by your salary, then divide it by ten. If your net worth is below half that number, something’s not adding up. Pun intended. The next critical step: Subtract your liabilities from your assets. This might not feel good, but from this you’ll instantly see what you can affect and change.

Pinpoint the source of your lifestyle inflation. It might not be huge expenses, but little pricey purchases over time that are causing you to feel financially squeezed. Go to your spreadsheet and take a look at the last three years and compare. See where you’ve spent more, calculate the difference, and there’s your answer. Areas to consider are housing, dining, subscriptions and services, travel, gifts, clothing, etc. Don’t make drastic changes all at once, as you might rebound and splurge. Just try to reduce your spending in the areas with the biggest deltas. Give yourself 60 days. Easy does it for lasting change­. This might be a smart mantra.

Set up intentional constraints in certain areas. As mentioned above, you don’t need to become a fiscal conservative. Just look at the areas where things feel a bit…much. Here are three principles to work with:

• Decide on savings and investment allocations for payday. There are non-negotiables you can put on auto-draft. If you don’t see it, you won’t miss it.
• Determine a set number for each category. But approach these numbers as conscious decisions, not as a way to restrict yourself. You’re choosing not to spend $500 on dinner each week because in relation to the rest of your goals, this makes sense.
• Set up a discretionary account. You know, fun money. This is a fixed monthly transfer amount without overdraft protection. When the money’s gone, it’s gone. This isn’t a way to frustrate or shame yourself; you just have a real window into what you’re spending, rather than some vague notion. This creates real clarity.

Reimagine your social spending. We’re talking dinners out with friends, group trips, or even the things that just feel normal, like wedding and birthday gifts. This might be the hardest part of all. So here’s a tip: Don’t let these things sneak up on you. Plan for these events in advance and give yourself a price range to stay within. This way, you stay on track and don’t miss out on important moments.

The truth is that your income might well continue to increase. You’ll get that raise and bonus. So instead of living it up and spending with wild abandon, try this: for every raise or bonus, put at least 50 percent of the net increase toward savings or investments before changing anything about your lifestyle, i.e., buying that new car, etc. The other 50 percent? Make intentional choices about how you want to spend. Conscious decisions pay off in the long run. And best of all, you won’t continue to feel broke.

How to Keep Your Cash When You Make Good Money

September 1, 2026  ·  Blog, Tip of the Month

4 min read

You’re doing well, earning a good salary. But somewhere around the latter part of the month, after you’ve paid your obligations and basically lived your life, which isn’t extravagant, you look at your checking and savings accounts, and well, there isn’t much there. And that sinking feeling starts to kick in. Sound familiar?

This is called lifestyle inflation. In a nutshell, the way you spend increases over time in relation to your rising income, so your financial floor rises right along with it. In fact, according to a Federal Reserve Survey of Consumer Finances, households that earn between $100,000 and $200,000 are in sizeable credit card debt, have retirement accounts that need help, and very little savings in relation to their income. What to do? Here are a few ways to get a handle on this.

Get a real number. You might have all your expenses in QuickBooks or the like and, on paper, you look good. But to get a real picture of how you’re doing, calculate the expected net worth you should have for someone at your age with your salary: Multiply your age by your salary, then divide it by ten. If your net worth is below half that number, something’s not adding up. Pun intended. The next critical step: Subtract your liabilities from your assets. This might not feel good, but from this you’ll instantly see what you can affect and change.

Pinpoint the source of your lifestyle inflation. It might not be huge expenses, but little pricey purchases over time that are causing you to feel financially squeezed. Go to your spreadsheet and take a look at the last three years and compare. See where you’ve spent more, calculate the difference, and there’s your answer. Areas to consider are housing, dining, subscriptions and services, travel, gifts, clothing, etc. Don’t make drastic changes all at once, as you might rebound and splurge. Just try to reduce your spending in the areas with the biggest deltas. Give yourself 60 days. Easy does it for lasting change­. This might be a smart mantra.

Set up intentional constraints in certain areas. As mentioned above, you don’t need to become a fiscal conservative. Just look at the areas where things feel a bit…much. Here are three principles to work with:

• Decide on savings and investment allocations for payday. There are non-negotiables you can put on auto-draft. If you don’t see it, you won’t miss it.
• Determine a set number for each category. But approach these numbers as conscious decisions, not as a way to restrict yourself. You’re choosing not to spend $500 on dinner each week because in relation to the rest of your goals, this makes sense.
• Set up a discretionary account. You know, fun money. This is a fixed monthly transfer amount without overdraft protection. When the money’s gone, it’s gone. This isn’t a way to frustrate or shame yourself; you just have a real window into what you’re spending, rather than some vague notion. This creates real clarity.

Reimagine your social spending. We’re talking dinners out with friends, group trips, or even the things that just feel normal, like wedding and birthday gifts. This might be the hardest part of all. So here’s a tip: Don’t let these things sneak up on you. Plan for these events in advance and give yourself a price range to stay within. This way, you stay on track and don’t miss out on important moments.

The truth is that your income might well continue to increase. You’ll get that raise and bonus. So instead of living it up and spending with wild abandon, try this: for every raise or bonus, put at least 50 percent of the net increase toward savings or investments before changing anything about your lifestyle, i.e., buying that new car, etc. The other 50 percent? Make intentional choices about how you want to spend. Conscious decisions pay off in the long run. And best of all, you won’t continue to feel broke.

---

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.