Category: Financial Accounting

Student Debt Options

Bankruptcy cases do not often include student debt because of the extra filings needed and the rate at which they are discharged. According to Tara Siegel Bernard for the New York Times, a new, more streamlined process for bankruptcy is making it easier to claim student debt and actually have it forgiven. Many jurisdictions utilize the Brunner test for those claiming student debt and the new approach to filing makes it easier to pass that test:

Can you currently maintain the loans and maintain a minimal standard of living?
Is your situation likely to persist for a significant portion of the repayment period?
Have you made a good faith effort to repay the loans?

By satisfying this test, borrower’s cases may be reviewed by the Justice Department and recommendations of discharge made to a bankruptcy judge.

Read More Here: More Student Loan Borrowers Are Shedding Debts in Bankruptcy

Amended Tax Returns

Do you have questions about when to file an amended tax return? Did you know that certain filing errors will be corrected automatically by the IRS? If you need more information about when amended returns are required, visit this page. More informational topics are available at the bottom to help guide you through the process. Topic no. 308, Amended returns

Where did money come from?

Metal coins, paper, crypto-coins, and banking, where did our current money systems originate? Listen to this fascinating podcast from Think, KERA to learn more. “The first writing was just accounting.” Sounds like CPAs invented writing.

The Invention Of Money
Jacob Goldstein, co-host of NPR’s “Planet Money,” joins host Krys Boyd to talk about how our world goes ‘round in large part because we’ve all swallowed hard and agreed to not ask too much about the real value of currency. His new book is called “Money: The True Story of a Made-Up Thing.” 

Business Tax Season During COVID

Thank you to the CPA Journal and Howard B. Levy, CPA for this detailed and helpful article about financial reporting, taxes, auditing and more for businesses as we approach our first tax season amidst COVID. The topics addressed include:

Use of estimates
Risk assessment.
Subsequent Events
Internal Control
Accessibility to Audit Evidence and Client Personnel
Disclosure of Risks and Uncertainties
Accounting Estimates
Valuation of receivables, inventories, investment securities, and deferred tax assets.
Impairment of goodwill, other intangibles, or long-lived assets.
Loss contingency accruals and disclosures.
Business interruption insurance recoveries.
Future operating losses.
CARES Act
Tax effects.
Government loans and other benefits.
Relief for financial institutions from certain GAAP provisions.
Revenue Recognition
Leases and Other Contract Modifications
Debt Covenant Compliance
Inventory Observations
EOM, Explanatory, and CAM/KAM Paragraphs
MD&A and Other Disclosures for Public Companies and Governments

Financial Reporting and Auditing Implications of the COVID-19 Pandemic

Some Practical Guidance

Go Paperless!

Ready to lose the piles, folders, and filing cabinets in your home office?  Now’s the time! Wirecutter recommends the Scanbot Pro Ap for Android and IOS to begin saving your paper files onto your phone and home computer.  One exciting feature is text recognition that will allow you to search for any word within each document.  Wirecutter also offers a list of shredders for when you no longer need the paper files, How to Go Paperless With Your Home Office.  Organizing these files into a specific folder and backing them up onto a thumb drive or other external hard drive is the final, important step.  They assure that you will be amazed during tax season when all of your documents are accessible at the touch of a button.

Avoiding Money Decisions?

Many of us, even if trained in the field, often struggle with decisions about our finances and retirement.  Thinking about money opens the door to discomfort for most,m as Tim Herrarra for the New York Times states in his article,  A Smarter Way to Think About Financial Decisions.  

These feelings span all levels of financial training,  “I have a Ph.D. in business and an M.B.A. in finance, on top of a degree in architecture, so I think I can understand financial products pretty well,” Professor Sela said. “But still, every time I get a letter from my bank, my instinct is to shove it in some drawer.”

How do we reframe our thinking and make these decisions easier?  Try picturing the questions from a lifestyle vs. solely financial product view, such as, I would love to visit Paris or take a cruise around the world, as opposed to just choosing which annuity would suit you best.

Short-Term Rentals

Ever thought about renting your home for holiday travelers or summer vacationers?  Or maybe during a music festival or race?  There are tax implications that come with this type of real estate.  Before you take the plunge, read this informative article by Mike D’Avolio, CPA, J.D. for the Journal of Accountancy.

Short-term rentals, the sharing economy, and tax

Grandparents Help With College

Grandparents Help With CollegeAs college expenses continue to increase, grandparents are beginning to step-in and offer assistance to their grandchildren. John F. Wasik, for the New York Times offers sound advice for those wishing to help with their grandchildren’s college expenses.   The Best Way to Help a Grandchild With College.  There are many aspects to be considered in order to maximize your monetary support of a student, such as when the money is applied or whose name appears on the account.  Read the full article to learn more about the amazing gift of higher-education that you can share with your grandchildren.