Author: Service2Client

Natural Disaster-Proof Your Finances

4 min read

Natural Disaster-Proof Your FinancesHurricanes, floods, wildfires, tornadoes and earthquakes are becoming more severe and more frequent with each passing year. Without sufficient protection, these events can cause lasting financial disruption. While no one can prevent a natural disaster, preparing your finances in advance is one of the most practical forms of crisis readiness.

Build a Financial Safety Net

Save at least three to six months of essential living expenses in a liquid account that you can access quickly. This money can help cover temporary housing, food, transportation, or medical needs if your income is disrupted or your home becomes uninhabitable.

In addition to emergency savings, keep a small amount of cash on hand (e.g., $200 to $500 in small bills). Be aware that many businesses accept only cash in the immediate aftermath of a disaster, as power outages often disable ATMs and card readers.

Protect Important Documents

Organize key documents and store them in a waterproof file cabinet or container to help you quickly file insurance claims or request disaster assistance. It is a good idea to keep paper copies on hand since power or cellular outages may prevent access to cloud storage online. Other records to keep easily accessible include driver’s licenses, passports, Social Security cards, insurance policies, birth and marriage certificates, and military or medical documents. It is also wise to leave copies with a trusted family member or friend who lives outside your immediate area.

Document Your Home and Belongings

After a disaster, you can speed up insurance claims processing by proving what you owned and its pre-disaster condition. Take photos or videos of every room in your home, including closets, cabinets, and storage areas. Capture serial numbers, brand names, and high-value items. Remember to update this home inventory periodically – especially when you make major purchases. Store the documentation in the same secure location as your important records.

Review and Strengthen Insurance Coverage

You should review your homeowners or renters’ insurance regularly to confirm that coverage amounts reflect current replacement costs. Many times, homeowners and renters discover too late that there are gaps or exclusions in their coverage that will cost them thousands in out-of-pocket expenses. Be aware that standard policies often exclude damage from floods, earthquakes, and in some cases wildfires (although not as broadly excluded), depending on your location. Consider supplemental policies for these conditions if you live in a high-risk area. Also, check to see if your auto insurance covers damage by flooding or debris. Set aside enough money in your emergency savings account to pay for insurance deductibles, and keep your insurer’s contact information and policy numbers stored on your phone for easy access.

Guard Against Fraud and Financial Disruption

Disasters often attract scammers posing as contractors, insurance representatives, or aid organizations. Legitimate disaster assistance programs do not require advance fees, so be wary of anyone requesting upfront payment or your personal financial information. It’s a good idea to enable alerts and multifactor authentication on your banking and investment accounts for extra security.

Plan for Logistics and Communication

Financial preparedness extends beyond money and paperwork. Before a storm or evacuation, fill your vehicle’s gas tank and gather essential supplies, including medications. Charge phones and power banks, and consider portable battery chargers for small devices. Also, create a family communication plan so everyone knows how to check in if normal communication channels fail. Designate an out-of-area contact person who can relay information if local networks are overloaded.

Take Action After the Disaster

If a disaster affects your ability to pay bills, contact lenders and service providers immediately.. Some lenders may add a natural disaster code to your credit report or offer hardship accommodations, which can provide context to other lenders, but they do not automatically prevent credit-score damage. If necessary, register for federal disaster assistance as soon as possible. Timely applications can help cover housing, repairs, and other essential expenses.

Know Your Risk

Finally, understand the climate risks specific to where you live. While certain locations are more appealing, they may come with higher exposure to flooding, fires or storms. Being informed allows you to prepare and make better long-term financial decisions. With organization, preparation, and awareness, you can face emergencies with greater confidence and resilience.

Understanding the Customer Acquisition Cost (CAC)

3 min read

What is Customer Acquisition Cost CAC?The Customer Acquisition Cost (CAC) measures how much a company spends to obtain new, additional customers. Oftentimes, this calculation is used with the customer lifetime value (LTV) metric, that also projects the customer’s profitability to calculate the newly acquired customer’s value.

It’s primarily used to measure a business’ sales and marketing departments to figure out their profitability, profit margin and return on investment figures.

How to Calculate

CAC = Sales and Marketing Expense / Number of New Customers

Examples of the expenses include product and service promotion expenditures, special compensation and commissions, regular wage payments, and operating expenses.

The tally of newly acquired customers is simply how many new, unique contracts the business acquired. It’s important to keep the expenses and customer acquisition numbers consistent over the same periods.

Why It’s Important

Business owners and their managers, along with investors, can look at sales and marketing efforts from the return on investment of their expenditures and outcomes. For example, there could be multiple channels that sales and marketing took to obtain new customers over a quarter, half-year or 12-month period (such as email marketing, social media marketing, conferences, etc.). Based upon each channel, the customer acquisition cost is determined by dividing the financial outlay per customer acquired.

From there, each channel can be analyzed to see which one works well and, equally important, which ones don’t work well and should either be discontinued or modified. Internal stakeholders and external investors (both existing and potential) can look at trends to see how ongoing efforts may be working and if existing management is productive or needs to be replaced with more competent individuals.

Accounting Considerations

Based on FASB’s Accounting Standards Codification 340-40, businesses are required to document and capitalize incremental costs of securing new customer business if the related expenses are projected to be recouped.

An incremental cost in the scope of obtaining a contract is a cost an entity incurs to obtain a contract that wouldn’t have been incurred if the contract hadn’t been obtained.

While a sales commission (be it fixed or a percentage of a new contract) may be considered an eligible incremental cost to one of its employees, it’s not necessarily always the case. Rather, the true test of whether an incremental cost is capitalizable depends on the subjective interpretation of if a mandated financial expenditure for an incremental cost is attributed to signing a contract with a new customer.

The following sample situations often require more investigation to determine whether the capitalization of costs is applicable:

  • Equity issuances based upon meeting production and essential function goals
  • Employee compensation according to previous years’ executed contracts
  • Sales commissions allocated over multiple timeframes and/or to more than one employee for a single contract

ASC 340-40 also stipulates the amortization schedule of capitalization costs of obtaining a customer contract on a scheduled timeline that follows the delivery to the customer of the contracted goods or services.

Conclusion

While the customer acquisition cost may be straightforward, when it comes to subjective cases, businesses that have experience with murkier situations are able to make the most of their subjective sales and marketing expenses when navigating the tax and accounting landscape. 

Filing Your 2026 Tax Return? The Stakes Just Got Higher

4 min read

Filing Your 2026 Tax ReturnPicture two things happening at the same time. The agency responsible for reviewing your tax return is understaffed and buried under a backlog, and the software that the agency uses to catch filing errors just keeps getting better.

That combination should give any taxpayer pause this season. Not because an audit is necessarily coming, but because if something does go wrong, the window for getting it resolved quickly has shrunk considerably.

The IRS Is Running Lean, But It’s Technology Isn’t

The agency lost more than a quarter of its workforce in 2025. The National Taxpayer Advocate’s most recent annual report to Congress documented the drop: from roughly 102,000 employees to about 74,000. Those departures, through a mix of voluntary exits and layoffs, spread across nearly every division.

Funding took a hit at the same time. Congress reversed a significant portion of the IRS budget boost approved through the Inflation Reduction Act, pulling back billions earmarked for enforcement and technology investment. A government shutdown that stretched across October and November of last year piled further delays onto an already strained system. The Treasury Inspector General for Tax Administration confirmed in a January report what tax practitioners were already seeing firsthand: a serious backlog in the processing of amended returns and taxpayer correspondence.

Here’s the part that catches people off guard. None of that has slowed the IRS’s ability to spot problems on your return. The agency’s systems cross-reference what you report against data received independently from employers, brokers, and financial institutions. Artificial intelligence and expanded automation have made error detection faster and more precise, staffing levels notwithstanding.

Fewer people are available to handle problems once they surface. But the technology responsible for finding those problems is running better than ever.

What This Looks Like in Practice

Tax professionals working with real clients are the best window into what this means day to day. Advisors report receiving IRS notices today that are resolving matters dating back to 2023, showing a multi-year lag on what should be routine correspondence. The practical response among preparers has been to tighten processes and leave less to chance.

Some advisors have added specific safeguards, such as obtaining power of attorney to monitor clients’ IRS online accounts directly rather than waiting for slow paper notices. Others describe the current environment plainly: the cost of needing to amend a return has gone up, not necessarily in dollars, but in time and uncertainty.

A poll of tax and financial advisors conducted during a recent industry webinar found that every respondent is maintaining at least the same level of care they applied when IRS staffing was at full strength. Nearly half said they are actively raising the bar this season.

What You Should Do Differently

Here are a few practical steps worth taking seriously this year:

  • Give your preparer complete and accurate information. Incomplete or inconsistent reporting is where most errors begin, and those errors are exactly what the IRS’ matching systems are built to catch.
  • If you are claiming something new on your return, ask your preparer to walk you through the basis for it. Understanding what you are filing and why is reasonable.
  • Set up an IRS online account at IRS.gov if you haven’t already. You can monitor your filing status, review transcripts, and spot potential issues before they become formal notices.
  • And if something does go sideways, respond early. Letting a notice sit without a response doesn’t slow the IRS down. It just costs you time you don’t have.

Conclusion

The agency may be a smaller operation than it was a few years ago. But the part of it designed to find mistakes on your return is still very much running.

Understanding Cash EBITDA

3 min read

What is Cash EBITDAWhile Cash EBITDA isn’t recognized by generally accepted accounting principles (GAAP), it’s a way for company owners and investors to account for deferred revenue during valuation modeling. This financial metric measures a business’ year-over-year change in postponed revenue to analyze a company’s financial situation.

Defining EBITDA

Before Cash EBITDA is defined, EBITDA must be defined.

EBITDA = earnings before interest, taxes, depreciation, and amortization

This metric is used quite often in financial analysis. Business owners, investors and financial analysts use this metric to examine different companies’ fiscal achievements against sector competitors and to determine the business’ profits from its core functions. 

Since financial statements are required by the U.S. Securities and Exchange Commission (SEC) and financial analysts are presented with varied filings, it still needs to be standardized for analysis. Though it’s not GAAP recognized, EBITDA and adjusted EBITDA are often reported by companies that can make peer-to-peer businesses easier to compare financials.

Some believe it’s not the best comparison due to many factors, including varying tax profiles, capital structures, and capitalization policies that affect net income. It’s important to be mindful that EBITDA doesn’t give any details regarding how a business’ working capital varies with its reinvestment into a business’ capital expenditures.

Some say EBITDA overstates profitability. Others believe EBITDA doesn’t factor in the cost of assets in evaluating profitability. For example, if two companies have the same EBITDA, but one is highly levered, the company with no to little debt is in better shape. 

Determining EBITDA

The income statement has tax expenses, net income, and interest expenses on it. If not found on the cash flow statement, the depreciation and amortization figures may be found on the financial statement footnotes. While EBITDA is a start, further refinement of EBITDA by using Cash EBITDA is a better financial definition.

Calculating Cash EBITDA

It’s important to account for deferred revenue properly. Since deferred revenue is revenue remitted in advance for products or services to be delivered at a future date, and revenue is recorded on the income statement when fulfillment happens, Cash EBITDA helps businesses and investors obtain a better picture of a company’s financial situation.

The deferred revenue or prepayment is recorded as a liability since the product or service hasn’t been delivered. Once fulfillment has occurred, it’s recognized as income. Therefore, it’s calculated as follows:

Cash EBITDA = TTM EBITDA + Year-over-Year Change in Deferred Revenue 

TTM EBITDA is the 12-month trailing EBITA. Also referred to as last twelve months (LTM), it’s the immediate 12 months of operating earnings. This way, the figure can be updated on a monthly or quarterly basis as the company adds new accounts.

The second component, derived from the balance sheet, is the annual change in deferred revenue.    

This formula is important and useful because if a new client is booked in the first three months of the year, and during a valuation analysis, if Cash EBITDA isn’t calculated, it would skew the valuation since it wouldn’t include new accounts.        

While GAAP is an important institution in the accounting and financial industry, businesses and investors that use well-regarded financial metrics beyond GAAP standards can make better-informed decisions.

Facilitating Access to Housing and In-State Tuition, Sanctioning Iran and the Battle Over DHS Funding

4 min read

Facilitating Access to Housing and In-State Tuition, Sanctioning Iran and the Battle Over DHS Funding21st Century ROAD to Housing Act (HR 6644) – As many local governments face the problem of rising affordability and severe housing shortages, this bipartisan bill would update existing housing programs to increase the housing supply, as well as streamline federal regulations that slow construction. Among its provisions, the legislation would authorize a pilot program designed to convert vacant or underused buildings into residential housing, issue grants for infrastructure improvements for utilities and transportation, and include construction of new housing units for low- and moderate-income residents. The legislation was introduced on Dec. 11, 2025, by Rep. French Hill (R-AR). It originally passed in the House on Feb. 9, but the Senate made changes before passing it on March 12. It has returned to the House for a final vote.

Territorial Student Access to Higher Education Act (HR 6472) – This act would amend the Higher Education Act of 1965 to provide for in-state tuition rates for certain residents of Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the United States Virgin Islands. The bill would help offset the high cost of attending college on the U.S. mainland, which prohibitively adds thousands of dollars to airfare, housing, and basic living expenses incurred by citizens of U.S. territories. The legislation was introduced by Rep. James Moylan (R-Guam) on Dec. 4, 2025. It passed the House on March 7 and is currently under consideration in the Senate.

Enhanced Iran Sanctions Act of 2025 (HR 1422) – On Feb. 8, 2025, Rep. Michael Lawler (R-NY) introduced this bill to strengthen secondary sanctions on foreign entities (e.g., banks, insurers, pipeline construction and operation facilities) that help process, export, or sell illicit Iranian oil, including for liquified natural gas. The bill lay dormant in the House until late February, when the U.S. launched its attack on Iran. On March 10, the bill was updated to include an interagency work group to develop more sanctions related to Iran and a multinational effort to enforce sanctions. The latest version of the act was passed in the House on March 16; its fate currently lies in the Senate.

Servicemembers’ Credit Monitoring Enhancement Act (S 2074) – The purpose of this bill is to provide free credit monitoring for veterans. Presently, only active duty members can take advantage of this service. The bill was introduced by Sen. Amy Klobuchar (D-MN) on June 12, 2025. It passed unanimously in the Senate on March 5 and is currently under consideration in the House.

Department of Homeland Security Appropriations Act, 2026 (HR 7744) – This is the bill that is currently holding up appropriations for the Department of Homeland Security (DHS) for the fiscal year ending Sept. 30. The bill was introduced by Rep. Tom Cole (R-OK) on March 2 and passed in the House on March 5. However, it has triggered a partial government shutdown and is under heated debate in the Senate. Republicans insist on passing the complete bill with increased funding for national security and border protection. The legislation also includes provisions prohibiting funds for Diversity, Equity and Inclusion and Critical Race Theory programs, as well as abortions and gender-affirming care for ICE detainees. Senate Democrats are seeking to include guardrails that would prohibit ICE agents from wearing masks or entering homes, schools, hospitals, etc., without a judicial warrant.

PAY TSA Act of 2026 – Rep. Nick Langworthy (R-NY) introduced a carve-out bill for DHS on March 16, authorizing specific fees already collected to fund the Transportation Security Administration (TSA) during shutdowns. The bill would direct the Aviation Passenger Security Fee (initiated after the 9/11 terror attacks) to be used to pay TSA agents during any period that TSA appropriations lapse. Airlines currently charge this passenger fee ($5.60 for a one-way trip and up to $11.20 for a round-trip) for flights that originate in the United States. The bill is not expected to pass due to Republican opposition to carving out funding from the general DHS appropriations bill.

End Special Treatment for Congress at Airports Act of 2026 (S 4123) – Sen. John Cornyn (R-TX) introduced this bill on March 17 as a companion bill reflecting stalled appropriations for DHS – and for TSA workers specifically. The bill calls for a ban on Congressional lawmakers’ current preferential status that enables them to sidestep security checkpoint lines at U.S. airports. The ban would require members of Congress to wait in TSA lines along with other passengers. The bill passed in the Senate on March 19, and its fate now lies with the House.

Version 2

The Governance Wall and AI Regulation

4 min read

AI RegulationThe era of artificial intelligence as a competitive advantage has hit a structural barrier – the Governance Wall. Some time back in 2024 and 2025, organizations raced to adopt AI tools to automate decisions, improve efficiency and cut costs. Now, as we move through 2026, the conversation is shifting from “How powerful is your AI?” to “Can you explain its decisions to a regulator, customer or even a judge?”

As global regulations move from abstract guidelines to strict enforcement, businesses must move from pure automation to strategies defined by traceable, human-centred oversight.

The Shift From Innovation to Accountability

In the early days of AI adoption, the priority was speed and results. Algorithms made decisions behind the scenes with little transparency. As AI improved, it was used in high-stakes scenarios like screening job applications, approving loans, detecting fraud and influencing health decisions. When these systems make mistakes, there are consequences that could include lost opportunities, discrimination claims or legal exposure.

As a result, regulators and even consumers are demanding answers. This shift has seen businesses move from AI innovation to AI accountability, where every automated decision must be justified, traceable, and explainable.

The Governance Wall and Regulatory Landscape

The governance wall refers to the growing layers of regulation, policies, and legal expectations that AI systems must pass before deployment.

AI laws such as the EU AI Act, which will take full effect in August, have set a global gold standard for transparency. One of the articles in this law is the Right to Explanation, which requires any company using AI for high-risk decisions to explain the logic behind the output.

Across the United States, some states have already introduced stricter AI-related rules. Notable examples include California’s AB 2013 and Colorado’s SB 24-205 state laws requiring businesses to disclose when AI is used in consequential life decisions, such as hiring, insurance premiums, or credit lending.

The Real Business Impact

For many businesses, this shift is more than a compliance issue as it introduces a complete operational change.

  1. Explainability is no longer optional
    AI systems must be designed in a way that allows you to explain outcomes clearly. For instance, if a system rejects a loan application or filters out a job candidate, you must be able to justify why. Hence, a system must have transparent algorithms, clear logic pathways, and documented decision criteria.
  2. Audit trails are becoming mandatory
    Businesses are now expected to maintain audit trails. These are detailed records showing what the AI did, when it did it, and why it made a specific decision. If regulators or legal teams ask questions, you must provide evidence and not assumptions.
  3. Pre-use notices and opt-out options
    Before an AI agent processes a customer’s data, a business may be required to notify the customer that AI is being used, explain how it impacts them, and offer a way to opt out.
  4. Board-level oversight
    AI is no longer just an IT concern. Executives and directors are increasingly responsible for managing AI-related risks, ensuring compliance with regulations, and protecting the company from legal exposure. In other words, the AI strategy must align with the legal and risk management strategy.

The SEC and the AI Washing Crackdown

While local regulators focus on consumers, the U.S. Securities and Exchange Commission (SEC) is focusing on investors. As AI becomes a buzzword, many companies are tempted to exaggerate their capabilities. This practice, known as AI washing, involves claiming to use advanced AI when the technology used is minimal or non-existent. Companies do this to attract investors, boost valuation, and appear innovative in a competitive market.

The SEC has made it clear that any AI claims that are misleading will be treated as securities fraud. This is not just a problem for tech giants, as even small and medium businesses seeking funding are having their tech stacks audited. Firms found in violation face serious consequences – as happened to Delphia and Global Predictions, which had to pay $400,000 in penalties.

Strategic Solutions

For a business to scale without being paralyzed by regulations, it must:

  1. Implement Human-in-the-Loop (HITL) systems by positioning human staff as quality assurance to sign off on high-stakes outputs. This will provide the human judgment layer that regulators demand.
  2. Adopt small language models as they are smaller, domain-specific, and easier to interpret and audit. They also offer explainable AI (XAI) capabilities, making it easy to show your work.
  3. Unified governance to facilitate compliance. This will require leadership, including legal (interpret laws), IT (build audit trails), and HR or operations (manage the human oversight) to work together.

7 Small Financial Habits for Big Success

4 min read

7 Small Financial Habits for Big SuccessYou might have heard this saying, “A journey of a thousand miles begins with a single step,” which is from the Tao Te Ching by Lao Tzu. However, the principle of taking tiny steps along a path to achieve a larger financial goal is the much same. Here are a few things you can integrate into your daily life to hasten your journey.

Every Day, Invest in Yourself

It all starts with you and your mindset. Set aside a time and a place to each day to go over what your financial goals are for the day, not the year. What is your daily spending limit? What do you have to buy? Baby steps are your way to long-term goals. Remember, you are your most valuable asset.

Have a Monthly Budget Meeting

No matter if you’re married and have a family, or single and have a dog, this is key. A monthly touch base helps you stay focused. If you have older kids, it’s a great way to start the conversation about generational wealth.

Here are a few things to put on the agenda as you look back at the month:

  • Did you stay within your budget? If you did, great. If not, make adjustments.
  • How much did you save? Do you need to decrease? Can you increase?
  • How much did you invest? How does it look? Does it need some tweaking?

Automate Savings

This is a no-brainer. Activate your direct deposit. The rule: If you don’t see it, you don’t miss it. Plus, this is a great way to create emergency reserves for when your fridge breaks or you need a new dryer, or for a larger goal like a down payment on a home. Further, only take money out if it’s a necessity, not a luxury. The treats can come later when you’ve planned for them. But ask yourself this: Is your savings account the best one? Can you find a better one? Here’s a list of high-yield savings accounts for you to review.

Track Your Progress

It might be tempting to look at how far you still have to go when you’re working toward a goal. Instead, celebrate your successes, no matter how small. During your monthly meeting, recognize your progress and, if you want to and can, increase your contribution. Little changes are what make the biggest difference.

Invest Incrementally

Start with what you can afford, big or small. Then increase the percentage each year. You might consider investing in stocks, bonds, or mutual funds within an IRA. You might also want to consult your accountant or financial advisor. And the key? Diversify. But also, set aside some money for your own development, i.e., learn a new computer skill or a new language. When you have experience investing in and for different things, you learn and grow. That not only makes you a better investor but also a better human.

Create Giving Rhythms

Choose a charitable organization that’s near and dear to your heart. One that feels like “you.” During your monthly meeting, carve out time to think about how and where to give. Then each month, revisit to see how you’re doing. Remember, when you give, you receive.

Dream Big

Having financial success is more than just about managing your money. It’s about having a vision for your life. Set ambitious goals. You’ve got one life in this iteration. So make a plan, take small steps and be persistent. You’ll get there sooner than you ever thought.

Sources

8 Small Money Habits for Big Financial Success | WealthBuilders

 

Filing Your 2025 Taxes? Why Accuracy Matters More Than Ever This Year

4 min read

Filing Your 2025 Taxes?Tax season is here, and while the IRS opened its doors for 2025 returns on Jan. 26, with the familiar April 15 deadline intact, this year’s filing experience is shaping up to be anything but routine. A perfect storm of workforce cuts, rushed new tax breaks, and strained systems means that getting your return right the first time has never been more important.

A Smaller IRS With a Bigger Job

The numbers tell a sobering story. According to the Taxpayer Advocate, the IRS entered this filing season with 27 percent fewer employees than it had just a year ago. Congressional funding clawbacks combined with the Department of Government Efficiency’s push for retirements and reductions have hollowed out the agency’s capacity at nearly every level.

The Treasury Inspector General for Tax Administration warned that the IRS could struggle this year, noting that by Dec. 30, 2025, the agency had managed to onboard only two percent of the employees it was authorized to hire for submission processing. The culprits? New hiring procedures imposed by the Trump Administration and delays stemming from last year’s record 43-day government shutdown.

What does this mean for you? Automated systems will continue handling straightforward electronic returns efficiently. But anything requiring human attention, whether that’s an amended filing, identity verification or a return flagged for errors, will move at a crawl. Phone lines will be even harder to get through than usual, if you can get through at all.

New Deductions, New Confusion

Adding complexity to an already strained system, the One Big Beautiful Bill Act that President Trump signed in July introduced a set of temporary tax breaks that took effect retroactively for 2025. These include deductions for tips, overtime, seniors, and car loan interest, all requiring new forms, schedules and guidance that had to be produced in a hurry.

The potential for mistakes is significant, especially for the 45 percent of filers who prepare their own returns. Most 2025 W2 forms will not break out overtime pay separately, leaving taxpayers to figure it out themselves. And despite the political rhetoric around “no tax on Social Security,” the reality is a larger deduction for seniors that phases out as income rises. Some recipients may not realize they still need to report their benefits as taxable income.

The SALT cap increase from $10,000 to $40,000 is good news for many, but it also means taxpayers should take a fresh look at whether itemizing now makes more sense than claiming the standard deduction.

Direct Deposit or Prepare to Wait

The IRS is pushing hard for electronic refunds, and for good reason. Most error free, electronically filed returns with direct deposit are processed within 21 days. But if you prefer a paper check or accidentally provide incorrect bank account information, expect a much longer wait with fewer staff available to sort out problems.

Returns sent by mail? Plan on six weeks or more. Amended returns are averaging five months or longer, and the IRS is already working through an elevated backlog from prior years.

The Bottom Line

Accuracy matters more than speed this year. The system still works well for straightforward, completely correct returns, but it is far less forgiving when something goes wrong. If you are uncertain about how to handle one of the new deductions or think you might be missing documentation, filing for an automatic extension is a smarter move than submitting a return with errors.

File electronically. Double-check every entry. Use direct deposit. And if your situation is at all complicated, seek out a tax professional who can help you navigate a filing season where the margin for error has never been thinner.

Burying Time Capsules, Ending Payments to Dead People, and Safeguarding Voting Rights for U.S. Citizens

3 min read

Burying Time Capsules, Ending Payments to Dead People, and Safeguarding Voting Rights for U.S. Citizens

Disapproving the action of the District of Columbia Council in approving the DC Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025 (HJRes 142) – After passage of the One Big Beautiful Bill Act, the Council of the District of Columbia (DC) opted out of the tax code from the Act, amending several provisions and restoring the DC child tax credit. This resolution nullifies DC’s amended legislation. It was introduced on Jan. 22 by Rep. Brandon Gill (R-TX). It passed in the House on Feb. 4, the Senate on Feb. 12, and was enacted on Feb. 18.

Semiquincentennial Congressional Time Capsule Act (S 3705) – This bill instructs the Architect of the Capitol to bury a time capsule in the Capitol Visitor Center (on or before July 4, 2026) as part of this year’s 250th anniversary celebration of the nation’s founding. The purpose of the capsule is to represent legislative milestones to date via a joint letter to the future Congress by the majority and minority leaders of the Senate and the House. The time capsule is meant to remain there until July 4, 2276, the nation’s 500th anniversary. The legislation was introduced by Sen. Thom Tillis (R-NC) on Jan. 27. It passed the Senate on Jan. 27, the House on Feb. 9, and was signed into law by the president on Feb. 18.

Bankruptcy Administration Improvement Act of 2025 (S 3424) – This Act was introduced by Rep. Christopher Coons (D-DE) on Dec. 10, 2025, and passed in the Senate on the same day. It cleared the House on Jan. 12 and was signed into law on Feb. 6. The bill makes alterations to the administration of bankruptcy cases by increasing fees paid to trustees in Chapter 7 (liquidation) cases, and extends by five years the fees paid to trustees in Chapter 11 (reorganization) cases. It also extends the term of bankruptcy judgeships in various districts, as well as other provisions.

Ending Improper Payments to Deceased People Act (S 269) – This legislation requires the Social Security Administration (SSA) to share its death records with the Treasury Department in order to prevent improper payments to deceased individuals. In the past, this bill had to be extended every three years, but the new bill makes the requirement permanent. The bill was introduced by Sen. John Kennedy (R-TN) on Jan. 28, 2025. It passed unanimously in the Senate on Sept. 19, 2025, cleared the House on Jan. 13, and was enacted on Feb. 10.

Safeguard American Voter Eligibility Act (S 1383) – This controversial voting bill passed in the House on Feb. 11. The Republicans in the Senate have secured 50 votes for passage, but the bill requires 60. The provisions in the current bill include requiring:

  • Each state is to submit full voter rolls to the Department of Homeland Security (DHS) for verification of citizenship via its SAVE system, which has historically had a high error rate of flagging citizens as non-citizens.
  • Voter roll purges every 30 days and end the 90-day quiet period that allows voters mistakenly purged time to re-register before Election Day.
  • New or changing voter registrants to show proof of U.S. citizenship (birth certificate or passport; five states already meet this requirement for a Real ID driver’s license).
  • Voters to show photo ID at polls in order to vote (38 states already require this)
  • A ban on automatically mailing ballots to all voters (currently used by eight states and DC); voters would have to send individual requests to receive a mail ballot.

Democrats in the Senate have vowed to block passage via filibuster.

 

5 Tax Tips for High Earners

4 min read

5 Tax Tips for High EarnersIf you’re a high-income earner, generally defined as household incomes over $350,000, there are some key things you might want to keep in mind come tax season. Here are a few of the strategies to consider that not only maximize your financial benefits but also minimize tax liabilities.

Boost Retirement Contributions

By increasing savings in your 401(k) and IRA accounts, you can reduce your current tax liability while building your nest egg. Here’s a closer look:

  • 401(k)s – In 2026, you can contribute up to $24,500. If you’re over 50, there’s a catch-up option of an extra $8,000, and better still, if you’re between 60-63, the catch-up contribution limit increases to $11,250. By doing these things, you lower your income and, thus, your tax bill.
  • Traditional IRAs – You can contribute up to $7,500 in 2026 with an additional catch-up contribution of $1,100 for individuals age 50 and older. Note that while you can make traditional IRA contributions regardless of income levels, the tax deduction phases out at certain income thresholds.
  • Roth IRAs – These products are popular because they let you sock away after-tax dollars. That said, your eligibility to contribute, capped at $7,500 in 2026, varies with income levels. Taxes are paid up front, but withdrawals, including earnings, are tax-free later. Woot! Beware, however, that the ability to directly contribute to a Roth IRA starts to phase out at $153,000 for single filers and $242,000 for those married filing jointly.

Implement Tax-Efficient Investments

Here are three more strategies to consider for reducing your tax burden:

  • Buy municipal bonds. With these securities, you may gain tax-free income that reduces your taxable income.
  • Buy dividend-paying stocks. Payouts from stocks give you lower-taxed income and wealth growth.
  • Invest in opportunity zones. These zones, defined as underserved, low-income communities, not only offer tax deferral but also provide community investment. Paying it forward pays yourself – and others.

Leverage Charitable Giving

And being strategic about it is critical when trying to reduce your tax bill. For instance, you might set up a donor-advised fund (DAF), which is an efficient way to manage your giving while securing tax benefits. You can set one up through a financial institution or a community foundation. Once you contribute, you’ll get an immediate tax deduction. However, this deduction is subject to certain limitations based on your adjusted gross income (AGI) – 60 percent for cash contributions and 30 percent for contributions of appreciated securities. Still, it reduces your taxable income for the current year. And that’s a good thing.

Gift Assets to Your Family

This is another good strategic move. Both you and your relatives will love it. In fact, the IRS lets you give up to $19,000 per year (as of 2026) without triggering gift taxes. Think college tuition or home down payments. However, while gifting assets can reduce the size of your taxable estate, it does not reduce your taxable income for income tax purposes. But here’s the upside: By using the gift tax exclusion, you’ll avoid increasing your estate tax liability later on.

Utilize Qualified Charitable Distributions (QCDs)

If you’re retired and over 70 ½, QCDs offer a powerful tax advantage. Get this: you can transfer up to $111,000 annually (in 2026) directly from your IRA to qualified charities without counting that amount as taxable income.

These are just a few of the ways high-earners can strategize for taxes. But no matter what tools and strategies you harness, the goal is to put together a smart plan so you can keep more of what you earn.

 

Sources

https://www.farther.com/foundations/tax-planning-strategies-for-high-income-earners#:~:text=401(k)%20and%20IRA%20Contributions,situation%20and%20provide%20personalized%20advice

https://finance.yahoo.com/news/minimum-salary-required-considered-top-170108488.html?guccounter=1