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

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.

Valuation Reserve Requirements

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

Heirless Estate 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.

How to Save Energy This Fall

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 Account for Bonds

3 min read

With the global bond market size bigger than many of the world’s biggest economies, it’s important for businesses that sell bonds to understand how to report transactions properly. According to the International Capital Market Association (ICMA), the global bond market’s capitalization is more than $128 trillion.

Defining Bonds

Offered by government or corporate entities, bonds are a static commitment issued to investors. Entities earn money from investors to invest in infrastructure or support operations. Investors receive a coupon payment periodically, and the bond is settled at a future date, which is referred to as the maturity date.   

When bonds are tendered, they may be done at a discount, at face value, or at a premium. The valuation relies on the gap at issuance between a bond’s coupon rate and the bond’s yield based on prevailing prices. Upon bond issuance, the bond’s face value is recorded under bonds payable, as the issuing entity receives payment for the bond’s prevailing market value. If there’s a positive difference, it’s recorded at a premium. If there’s a negative difference, it’s recorded at a discount.

Bond Issuance and Accounting Considerations

When sold at par value, after the corporation or government entity receives payment from investors, the issuing entity records it as a liability because it’s liable for the investor’s investment. This would be set up as:

 
    Debit Credit
Cash   $100  
  Bonds Payable   $100

 

Bonds Payable Defined

Since the entity owes the investor, bonds payable is recorded on the liability section of a business’ balance sheet. Much of the time, bonds payable are reported as non-current liabilities.

When sold at a discount, a gap exists between a bond’s par value and the monetary investment the issuing entity obtains from the investor; the issuing entity must record the transaction as a discount on bonds payable account. The journal entry is as follows:

 

    Debit Credit
Cash   $100  
Discount on Bonds Payable   $100 $100
  Bonds Payable   $100

 

If bonds are purchased at a premium, which is when investors pay more for a bond with a higher interest rate, providing higher coupon payments, entities must record it as a premium on bonds payable (POBP) account. It often occurs when purchasers agree to lesser earnings due to the bond having a higher rate than prevailing rates. In the case of a bond’s issuance at a premium, it can be recorded as follows:

    Debit Credit
Cash   $100  
  POBP   $100
  Bonds Payable   $100

 

If there’s a discount on bonds payable, the recurrent record must reflect the interest expense with a debit transaction and the bonds payable entry must see a credit. This accounting method impacts the bond issuer by growing the total interest expense, which the issuer records.

If, however, the issuer receives payment from investors beyond the face value, the interest expense must be credited, and the premium on bonds payable entry should receive a debit.

Conclusion

Whether it’s a business issuing bonds or an investor evaluating a company, understanding how to account for bonds is essential to evaluate a business’ financial health.

IRS Raises Mileage Rates Midyear: What You Need to Know

4 min read

For the first time since 2022, the IRS is changing standard mileage rates in the middle of the tax year. If you track business, medical or moving miles, this matters. Starting July 1, 2026, the numbers go up, and your recordkeeping needs to get more precise.

What Changed and Why

The IRS bumped the business mileage rate from 72.5 cents to 76 cents per mile for travel on or after July 1, 2026. Medical and moving rates rose from 20.5 cents to 23.5 cents. The charitable rate stays put at 14 cents, where it has been stuck since 1998.

The trigger was fuel prices. When the IRS set the original 2026 rates back in December, gas was averaging about $2.89 per gallon nationally. By mid-July 2026, AAA reported the average had climbed to roughly $3.87, an increase of 34 percent. Much of that spike traces back to the war in Iran and uncertainty around oil production and shipping through the Strait of Hormuz.

The last time the IRS made a midyear adjustment was 2022, after Russia invaded Ukraine and gas prices surged past $5 per gallon in some markets.

Two Sets of Rates for One Year

This creates a split year for mileage calculations. Miles driven from January 1 through June 30 use the original rates. Miles driven on or after July 1 use the revised rates. If you drove 4,000 medical miles before July and another 4,000 after, you would calculate them separately: $820 for the first half at 20.5 cents, $940 for the second half at 23.5 cents.

The same logic applies to employer reimbursements. The new rates kick in only when both the expense and the reimbursement occur on or after July 1. Employers running accountable plans should review their policies to make sure they are applying the correct rate based on when the travel happened and when the payment goes out.

Why the Rates Differ by Category

The business rate is higher because it accounts for both fixed and variable costs of operating a vehicle: depreciation, insurance, maintenance, tires, gas and oil. Medical and moving rates cover only variable costs, which is why they sit lower.

The charitable rate is a different animal entirely. Congress set it by statute, and it has not budged in nearly three decades. Adjusted for inflation, 14 cents from 1998 would be closer to 29 cents today.

Who Can Actually Use These Rates

Here is where it gets narrower than many taxpayers expect. The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses starting in 2018, and the One Big Beautiful Bill Act made that change permanent. Most employees cannot write off business mileage whether their employer reimburses them or not.

Moving expense deductions are similarly limited. Only active duty military members moving under orders for a permanent change of station qualify, along with certain intelligence community members under rules effective for 2026.

Charitable mileage requires itemizing, which means it only helps if your total deductions exceed the standard deduction of $16,100 for single filers or $32,200 for married couples filing jointly. Many taxpayers skip it.

Self-employed individuals and business owners get the most benefit from the business rate since they can still deduct qualifying mileage on Schedule C.

Recordkeeping Just Got Harder

Normally, tracking mileage means logging dates, destinations, miles driven, and business purpose. This year, you also need to note which side of July 1 the expense falls on. A mileage app can help, but a notebook or spreadsheet works, too.

If you use a vehicle exclusively for business, beginning and end-of-year odometer readings establish total mileage. Photos can serve as backup. If you mix business and personal use, your records need to clearly separate the two.

Conclusion

Gas prices forced the IRS’s hand, and now 2026 has two mileage rate regimes. The math is not complicated, but the documentation requirements are tighter than usual. Know when your miles were driven, keep clean records and make sure your employer’s reimbursement policies reflect the July 1 cutoff. The details matter this year more than most.

Understanding the Exchange Ratio

3 min read

With more than $57 trillion in mergers and acquisitions, according to the Institute for Mergers, Acquisitions & Alliances, understanding how the Exchange Ratio works is essential for businesses and investors to maximize these processes.

The ratio assesses how many shares the company that’s purchasing the takeover company must issue per share of the takeover business. Transactions that use shares for part or whole of the payment are able to leverage this integral benchmark. It’s important to keep in mind that the exchange ratio may provide parties helpful insight on transactions involving all or part equity, but it won’t be beneficial for all cash deals.

The formula to calculate the ratio is as follows:  

Exchange Ratio = Offer Price for Target’s Shares / Acquirer’s Share Price

Looking at the acquiring firm’s and the target or acquired firm’s share prices illustrates the exchange ratio. If the target firm has 30,000 shares outstanding and trades at $34.60, and the acquiring firm offers to pay a 20 percent takeover, it results in a share price of $41.52 per share. The acquiring firm’s share price currently trades at $23.50.

Putting the formula into practice, it’s as follows:

= $41.52 / $23.50

= 1.77

Based on the resulting Exchange Ratio of 1.77, the acquiring firm must issue 1.77 shares of its equity for each share of the target firm it wants to acquire.

For transactions with different proportions of cash and stock, the percentage of stock is what’s factored into the exchange ratio. Deals conducted with 100 percent stock provide the most value to an exchange ratio.   

Real World Example

If an acquiring business offers the acquisition target two of its shares for a single share of the acquired company, the deal can take the following circumstances. Before the deal announcement, the purchasing company’s shares might be trading at $20, with the target company’s shares trading at $30. With a 2-to-1 exchange ratio, the purchaser is bidding $40 for the seller’s share at $30.

After the deal announcement, there’s usually a valuation difference between buyer and seller due to the time value of money and risks. Risks include potentially being blocked by regulators, shareholder rejection or changing economic conditions. One important consideration is that merger arbitration may occur by investors when they try to get ahead of a deal ultimately completing before the uncertainty is removed.

If the deal ultimately closes, and investors get two buyer shares in exchange for one seller share and the acquiring company’s share increases to $37 from $30, investors who bet against the buyer’s stock via short-selling will be rewarded a difference of $3 per share (2 shares from the acquiring company 2 X $20 = $40 minus the $37 single share price of the target company). Investors who close out their short position will see the difference from the seller’s price for a profit. This tactic is frequently executed by opportunistic investors who have no direct interest in owning the equity, but only for a trade.

While each deal is different, understanding the process is essential to break down the internal details for all interested merger and acquisition parties. 

Travel Companions: How to Share Expenses

5 min read

No matter how well you know someone, you usually learn a lot more once you’ve traveled with them. We are all different in this activity, from people who prefer aisle seats over window seats, to Airbnb renters or hotel enthusiasts, to the outdoorsy versus museum aficionados.

Friendship compatibility does not always translate to travel compatibility. Therefore, before you load up the car or board public transportation, it will help to communicate preferences, establish a few ground rules, and, perhaps most importantly, decide how to share expenses.

There are plenty of advantages to traveling with another person or a group of people, even if you tend to be a loner. For example, sharing expenses for accommodations, a car rental, or even a bottle of wine over dinner can cut your vacation budget substantially. However, if you don’t have a plan for what expenses to share and how to track them, you may return home short-changed, resentful, and with one less person in your life.

Ground Rules

It’s important to gauge upfront if everyone is on the same page as to how much money they want to spend on the trip, and even establish a maximum budget so no one gets trapped into paying more than they can afford. This means determining the level of accommodations (e.g., luxury versus budget-friendly) to shop for, whether or not you want the option to cook meals as opposed to eating out all the time, and the main activities the group plans to engage in (e.g., free hiking versus expensive snow skiing). Establish what types of expenses will be shared, such as group meals, housing and car rental, and what will be paid for individually, such as airfare, solo outings and souvenirs.

Choose Your Tracking Method

There are two approaches for sharing the expenses of travel: Wing it or track it. Winging implies a more casual tactic. For example, one person picks up the hotel room tab, another pays for the rental car, another pays for meals. Perhaps you rotate or take turns picking up comparable bills. The goal is to generally spread expenses evenly across all payers, but winging it may lead to one (or more) travelers paying more while the other(s) pay less. If everyone agrees their outlays may differ, then this tactic will probably work just fine.

Tracking Tools

The second approach is to track all shared expenses with some degree of accuracy. This is easier if all expenses are shared evenly, but more complex if expenses need to be broken down into who ordered a salad and who ordered the filet mignon.

Fortunately, there is a plethora of electronic technologies and digital tools designed to make it easier to track travel expenses and ensure no one overpays – right down to the penny.

PayPal, Venmo, Zelle – These services make it easy to send or request money using apps. They may require travelers to keep receipts and calculate individual tabs, then settle up at the end of the day or the end of the trip. This tactic can be a little unwieldy, and may require manual tracking to ensure no one is paying too much or too little along the way. All travelers should sign up for at least one compatible money transfer app; they are generally free to use.

Splitwise – This app enables participants in a travel group to enter the expenses they paid by adding the names of the participants and breaking down the individual amounts each person contributed to each bill. The app tracks expenses by person, then tallies up who owes money at the end. Splitwise calculates who owes whom. Travelers can then settle balances using their preferred payment method, such as PayPal, Venmo, Zelle, bank transfer, cash, or another supported payment service. Splitwise is just one brand name of many apps that work similarly, including Tricount and Revolut.

Cino – This app works a bit differently in that each traveler links it to their personal credit or debit card, and the group Cino card is loaded into Apple Pay or Google Pay. Then all participants share a virtual card to pay for expenses, which divides each payment at the point of purchase among the participants for that expense. When one person pays for an expense, everyone’s share is automatically charged to each member’s connected credit or debit account. Note that Cino does not break down invoices by line item to track exactly who ate what; it follows a split ratio (e.g., 50%-50%) as determined up front by the group.

Artificial Intelligence – Travelers may want to give AI a try, where as they start with a prompt asking the service to track and split group expenses, then enter the names of participants and related expenses to the prompt on an ongoing basis. AI tools can organize, categorize, and calculate shared expenses that users enter manually. Some AI assistants may also summarize spending trends or generate settlement calculations, but they generally do not automatically track purchases unless integrated with financial apps.

Given today’s higher prices, group travel is becoming more prevalent as a way to share the cost of vacation. According to a 2025 Zeta Global survey, 40 percent of travelers are going on trips with family while 21 percent opt to vacation with friends. Today’s new digital tools make it easy to track and share expenses so that you don’t strain relationships with travel companions.

Ready to Set Your Q4 Financial Goals?

4 min read

Surprising as it may seem, Q4 is at your doorstep, knocking and asking for attention. What’s more, it’s that time of year when everything starts getting busy: kids go back to school, football starts, and then the holidays are just up ahead. During this time, you might also be hearing “cha-ching, cha-ching” as what lies ahead can be financially challenging. Consider a few ways to frame this and strategies to set up goals as you bring the year to a close.

Map out the big picture. While all the things in your immediate future might be at the forefront of your mind, take a step back. What’s your five-year vision? Where are you with your big life goals? Do they include saving for a down payment for a house, a dream vacay, or setting up a college fund for your kids? Decide on completion dates and work backward. What needs to happen for these things to become realities?

Focus on the next 90 days. Now you can get a bit more granular. What’s looming in the future, before the year ends? What are your holiday plans? Usually this involves expenses (travel and food). Brainstorm about how to economize. Can you cost-share with family and friends? (Thinking here about your five-year vision.) What about your home and cars? Do they need work, and what might you spend? Do you have an emergency fund to help with all this? If you don’t, start one! Keep all of these things in mind as you make your way toward next year and beyond.

Set up a tracker. It can be an Excel spreadsheet, a notebook, or a whiteboard – whatever works for you. Color code different milestones and then brainstorm (yes, again) to see how you can reach these goals. Do you need to cut expenses in some areas? Pick up a side hustle? Purge your closet (house, too), and sell some things? To get started, here are a few tracker templates to kick things off.

Create SMART goals. You might have heard of this acronym, but it stands for:

  • Specific: Needs to be concrete, not vague.
  • Measurable: Must be specific dollar amounts.
  • Attainable: Within your budget but still challenging.
  • Relevant: Aligned with your five-year goals, your future dreams.
  • Time-bound: Hard deadlines.

Separate your goals into buckets. Those would be long-, medium-, and short-term.

Long-term: This is 5-plus years. Early retirement by XX years old with a specific amount of money in the bank. Paying off your house by a certain date. Having a certain amount of cash saved for your kiddos after you’re gone.

Medium-term: This is 1-5 years. The usual suspects include paying off your car, student loans, consumer debt, or even building up a (dollar amount goes here) reserve for a down payment on a house or second property.

Short-term goals and quarterly goals: This is less than 1 year – hot items you cannot ignore. Starting, or adding to, your emergency fund that will equal, let’s say, $5,000. Or, for instance, saving $8,000 for a family vacation. You can also look at these small goals as subsets of larger goals: paying off X% of your house or car note by a certain date.

In sum, all of the above are simple ways to wrap your head around how to navigate Q4 financial goals – and beyond – by carving them up into smaller, digestible steps. If you can get organized, take on the last half of the year with intention, and make some real progress, there’s nothing in the (fiscal) world you can’t accomplish if you set your mind to it.

Sources

https://www.heliodorpress.com/articles/fourth-quarter-financial-goals

How to Account for Bolt-On Acquisitions

3 min read

With over $4 trillion in merger and acquisition transactions happening in 2025, understanding the necessary accounting considerations is essential to see how tax professionals can navigate financial statements.

Defining Bolt-On Acquisitions

This process is often used by private equity companies and occurs when a bigger business acquires a smaller company, providing investors with synergistic performance. This happens because the smaller company gives the bigger company a faster edge through complementary services, products or geographical advantages without having to do research and development from scratch. It also provides the acquiring business with new market access, further increasing the value of an acquisition for the acquiring company.

Bolt-On Versus Tuck-In Acquisitions

Bolt-on companies still have some level of autonomy and keep some of their unique brand identity post-acquisition, despite the acquired assets being integrated into the acquiring company’s overall structure. This contrasts with tuck-in acquisitions, where this type of acquisition completely absorbs the entire assets of the acquired company into the acquiring company.

Defining Asset Acquisition & Accounting Treatment

FASB’s Accounting Standards Codification Topic 805, Business Combinations, further defines asset acquisitions, including bolt-on acquisitions.

Asset acquisitions are defined as the complete fair value of the acquired assets as defined by similarly identifiable attributes. By meeting the so-called “screen test,” ASC 805 defines it as an asset acquisition. Based upon this type of transaction, acquirers are required to account for it via ASC 805-50’s cost model.

Transaction expenses, including immediately attributable and additive expenses the company sees during the asset acquisition period, are factored into the purchased asset(s) costs. This lowers expenses during the acquisition’s time frame compared to a business combination, which results in greater depreciation expenses over the acquired asset’s life.

Another consideration for asset acquisitions is failing to recognize goodwill. Assets could have a higher basis that’s subject to depreciation or amortization if the value is reported higher than the asset’s fair value. Similarly, when it comes to ASC 842-10-35-3, unless the lease is materially changed, the acquirer must maintain the acquiree’s same lease circumstances.

Defining Business Acquisition

ASC 805 defines a business as a functional combination of assets and processes, featuring novel methods for developing significant input, in order to create new outcomes. This is a subjective process that ASC 805 describes in depth and often requires expertise to make a judgment call. According to ASC 805-10, accounting considerations for business combinations include measuring liabilities and assets at fair value. Legal and consulting transaction costs beginning with the acquisition preparation through the acquisition date should be expensed.

Goodwill is recognized as an asset and evaluated once a year for impairment. Like an asset acquisition, lease classification is kept the same as the acquired company, unless the lease agreement has material alterations.

Conclusion

While there are many different types of acquisition considerations and relevant procedures required, understanding how to navigate bolt-on acquisitions is essential to make the most of accounting for mergers and acquisitions in 2026 and beyond.

Supreme Court Will Decide What Homeowners Are Owed When Tax Sale Erases Equity

4 min read

A county in Michigan was owed about $2,200 in back taxes. To collect it, the government took a home worth close to $200,000, auctioned it for a fraction of that, and called the matter settled. The family is now putting a simple question to the Supreme Court: when the state sells your house over a small debt, does it owe you the real worth of what it took or only whatever the auction happened to fetch?

The Rule that is Already on the Books

Three years ago, the court drew a clear line. Geraldine Tyler, then in her 90s, had let a $2,311 levy on a Minneapolis condo balloon to about $15,000 once penalties and interest stacked up. Hennepin County took the unit, found a buyer at $40,000, and held onto all of it. By any fair reckoning, the $25,000 above her debt was Tyler’s money – even though the county walked away with it. Minnesota law blessed that, as did 11 other states and the District of Columbia, plus nine more states under narrower terms.

A unanimous court ended the practice. Chief Justice Roberts wrote that a government can sell property to satisfy a tax debt but cannot help itself to more than the debt is worth. Leftover equity belongs to the owner, and a state cannot dodge that by defining the property interest away.

The Question Tyler Left Hanging

Tyler was tidy because the surplus was undeniable. Subtract a debt near $15,000 from a $40,000 sale, and the leftover is beyond dispute. The justices never had to confront the messier case where the sale price itself is artificially low. If a forced auction brings in far less than a home would fetch on the open market, is that depressed number really the measure of what the owner lost?

That is the gap, and tax auctions are where it opens. Unlike an ordinary listing, these sales draw a thin crowd of investors and speculators, and the government has little reason to chase top dollar. A county could therefore obey Tyler to the letter, hand back every cent of the auction surplus, and still watch most of a family’s equity vanish.

How the Pung Family Got Here

Three-and-a-half decades ago, Timothy Scott Pung paid $125,000 for a roughly 3,000-square-foot house in Isabella County, and for years it carried Michigan’s Principal Residence Exemption. Scott died in 2004, and his wife in 2008. Their son Marc stayed on, assuming the exemption rolled forward without any new filing. The assessor saw it otherwise and stripped the break retroactively. Marc fought back, and a state tax tribunal agreed no further paperwork had ever been required.

The assessor would not let it go. Over a shortfall of $2,241.93, on a place the county itself pegged at $194,400, the family was thrown out, and the home went under the hammer for $76,000. Nobody disputes that the estate is owed the surplus. The quarrel is how to measure it. Isabella County treats the surplus as the hammer price minus the debt, leaving about $74,000. The estate says the yardstick should be the home’s true market value minus the debt, pushing the number toward $194,400. The spread tops $100,000.

Bigger Than One House

The stakes reach far past Michigan. Minnesota alone moved more than 4,300 properties through these sales between 2014 and 2020. Across the 1,200-plus that were family homes, the typical owner lost some 92 percent of the equity above the debt, averaging around $207,000 against bills averaging just $17,000. In the nation’s capital, a veteran with dementia lost a $200,000 home over $133.88.

There is a second front, too. The estate contends the foreclosure worked as an excessive fine barred by the Eighth Amendment, a theory the lower court waved off as ordinary tax collection but one that Justices Gorsuch and Jackson have flagged for review.

Argument wrapped on Feb. 25 with a ruling likely any day now. The court has already said the government cannot keep more than it is owed. Now it must decide whether that shield covers only the cash left after the gavel, or the equity that vanished before.

Understanding Depreciation Recapture

3 min read

This accounting and tax method refers to a treatment used by the Internal Revenue Service (IRS) to obtain tax remittances on sales of depreciated property. Understanding how it works is essential for filers to make the most of it.

Required Conditions

As property depreciates, its value declines. When depreciated assets are sold, it’s able to be filed as ordinary income as long as the transaction’s price is above the property’s adjusted cost basis. The gap between the sales price and its adjusted cost basis must be filed as a component of the individual’s ordinary income.

Defining Adjusted Cost Basis

Adjusted Cost Basis = Asset’s Purchase Price + Improvements – Depreciation Deductions

Per Internal Revenue Code Section 1016, this calculation factors in both lower depreciation rates and improvement additions, resulting in the asset’s net cost.

Illustrating Adjusted Cost Basis

If an asset purchase price is $75,000, and it’s depreciated annually over six years, its adjusted cost basis is as follows: $75,000 – ($3,000 x 6) = $57,000.

If, however, the asset is sold for less compared to its adjusted cost basis, the transaction’s gain should be filed as a capital gain and not ordinary income. When it comes to calculating depreciation recapture, the adjusted cost basis is incorporated into the calculation as follows:  

Property Acquisition Cost: $750,000

Six annual deductions for depreciation: $7,000

Amount the assets are sold for in year 7: $740,000

Tax Rate of 25 percent for depreciation recapture

20 percent tax rate of capital gains

Therefore, adjusted cost basis equals = $750,000 – ($7,000 x 6) = $708,000

When calculating the gain on the sale, the resulting amount is calculated as follows:

= $740,000 – $708,000 = $32,000

Based on the owner(s) of the assets, the $32,000 will be reported as ordinary income. The depreciation recapture tax of 25 percent on the $32,000 will be $8,000 ($32,000 x 25 percent).

Be mindful if the $32,000 is more than the full depreciation deductions filed for by the taxpayer, the depreciation recapture will match how much depreciation is deducted and must be taxed as ordinary income. The balance will be taxed as a capital gain.

Assume everything from the first calculation is the same, but now the same asset is sold for $940,000.

Property Acquisition Cost: $750,000

Six annual deductions for depreciation: $7,000

Amount the asset is sold for in year 7: $940,000

Tax Rate of 25 percent for depreciation recapture

20 percent tax rate of capital gains

The adjusted cost basis will remain $708,000

In this example, since the asset owner’s gain is $190,000 ($940,000 – $750,000), only the depreciation deduction of $42,000 ($7,000 x 6 years of depreciation) will be reported as ordinary income since it’s the complete sum of the depreciation deductions. The balance of $148,000 ($190,000 – $42,000) will be taxed at the capital gains rate. The calculations for taxes are calculated as follows:

Depreciation recapture: $42,000 x 25 percent = $10,500

Capital gains calculation: $148,000 x 20 percent = $29,600

Additional Considerations

It’s important to consider that if an asset has been held for fewer than 12 months, gains from property sales are taxed as ordinary income. Depending on the circumstances, if an asset is sold for a loss, depreciation recapture isn’t applicable; however, Internal Revenue Code Section 1231 may provide exceptions to treat it as an ordinary loss tax treatment.

While each business’ transactions are different, when the entity is eligible, it can provide another way to navigate their federal taxes efficiently. As always, contact a professional for more personalized guidance.

Tips for Early Retirement Planning

5 min read

Retirement planning starts with retirement spending. Ideally, retirees are mortgage-free and relatively debt-free before they leave the working life behind. In retirement, a key strategy is to maintain low monthly staple expenses.

Therefore, if you want to devise a financial plan that will allow you to retire early, consider cutting back your basic household expenses a year or more before your target retirement date. Some retirees choose to downsize their home, which also tends to reduce property taxes, homeowner’s insurance and maintenance costs.

Also, use that time to shop for cable, internet, or cell phone plans that may be cheaper and suit your needs in retirement. Be aware that seniors often get additional discounts they may not be aware of, so be sure to explore those options. By reducing your pre-retirement cost of living, you can reduce the amount of income you’ll need after you retire.

Build up Coffers

Another way to plan for retirement is to increase your savings while still earning income. You should have more than the typical emergency fund when you retire – so you won’t deplete it before you die. You also don’t want to have to take large, unscheduled withdrawals from retirement accounts because that would deplete your principal and potentially reduce the ongoing income you receive from those sources.

Social Security

Remember that if you start taking benefits before your official retirement age, you will lock into a lower payout level for the rest of your life. So even if you can afford to retire early, it’s generally a good idea to hold off tapping Social Security until full retirement age or even up until age 70, when you earn additional income credits. Factors to consider in making this decision include your health and life expectancy, needs for income, and other retirement assets. Remember, Social Security will last the rest of your life with cost-of-living increases and no investment market risk, so it is one income source you should wait to maximize as long as you can.

By establishing an account at the Social Security website, you can check your benefit amount at various ages based on current earnings; these projections are updated every year. If you are married, consider both spouses’ benefits as it might be better to start one early while allowing the other benefit to accrue.

Pension

If you expect a pension from your employer, you can request projected payouts to help devise your early retirement plan. If you have the option to receive either annuity payments or a lump-sum distribution, you might want to consult with a financial advisor to determine your best option within the context of your entire portfolio of assets.

Investment Accounts

If you have a 401(k), 403(b), or traditional IRA, remember that once you turn 73, you must begin required minimum distributions if you haven’t already. As a general rule, the common strategy for drawing down invested assets in retirement is to use taxable accounts first, tax-deferred accounts second, and tax-free accounts (e.g., Roth IRA) last. Roth IRAs do not require distributions at any age and can continue to grow throughout retirement.

Rule of 55

There is a legal strategy for tapping 401(k) or 403(b) retirement funds before the age of 59½ without incurring a penalty. The Rule of 55 enables you to make a series of substantially equal periodic payments from a former employer’s retirement plan (not a rollover account) between the ages of 55 (50 for a government defined-benefit plan) and 59½. While this strategy waives the 10 percent early withdrawal penalty, distributions are still subject to income taxes.

Health Insurance

If you wish to retire before age 65, consider your health insurance options.

  • Employer-sponsored coverage through COBRA
  • Health insurance marketplace plans at HealthCare.gov
  • Joining your spouse’s health insurance plan
  • Potential discounted coverage through membership organizations (e.g., AARP)

When you become eligible for Medicare, you must apply during the seven-month period that begins three months before you turn 65 and three months after your 65th birthday. If you do not apply during this enrollment period, you may face penalties.

Long-Term Care

If you’re thinking about early retirement, you may not be thinking much about nursing home expenses. However, long-term care can be quite expensive, so it’s important to plan for it early so you don’t run out of money when you need it most. Help from family can reduce the need for paid long-term care in your later years, so you may want to consider moving closer to them before or after you retire. Note that Medicare generally does not cover ongoing long-term care, although it may provide limited coverage for skilled nursing and rehabilitation services.  As a result, you’ll either need to self-fund, purchase some form of long-term care insurance, or spend down your assets in order to qualify for Medicaid long-term care assistance.

An early retirement plan usually involves a number of moving parts, so carefully consider withdrawal strategies and your specific tax situation in order to develop a plan that works best for your circumstances.

11 Ways to Beat ‘Streamflation’

4 min read

The cost of streaming subscriptions is on the rise, and you have to ask: Are they really worth it? Especially when it’s summer, and you’re taking advantage of the beautiful weather. Here are some ways to entertain yourself, friends and the fam that are either no- or low-cost – and might be better than binging on yet another series.

Have ‘Zero Dollar’ days. Set aside one or two days a week where you don’t spend a cent. Make your lunch the day before. Cook dinner at home, and then end the day with a walk at a nearby park.

Plant a garden. All you need is a few seeds (or plants), a place to dig and you’re good to go. Best of all, it will keep you busy all summer long. It’s something, too, that you can do with friends and family. Can you say togetherness?

Practice plogging. What, what, what? Yes, plogging is a real word and a mash-up of a Swedish word, plocka, meaning “to pick,” and jogging. As you’re jogging, or even walking, pick up trash along the way. You’re not only helping your body but also bettering your community and the environment.

Visit free museums. If it’s just too hot to be outside, get some A/C and some culture – without parting with your moolah. Just Google “museums near me,” and you’ll be all set.

Play board games. Scrabble or Monopoly, anyone? What about Gin Rummy or Hearts? Make a light summer salad for dinner, gather with your buds and/or progeny, and have some fun.

Make your own popsicles. What a great money-saving hack. Buy a cheap popsicle mold at Walmart, your neighborhood home goods store, or online. Fill it up with yogurt, fruit, or anything else that sounds delish, freeze, and dig in. Here’s a list of recipes you can experiment with!

Start a book club. Books, remember those? Turn off the Netflix, go to the library or browse online, pick a book that looks good, and gather with friends and family. And bing bang boom, it’s a book club! Sometimes, theater of the mind is so much better than what’s on the idiot box.

Join a Buy Nothing group. This is a collection of people who believe in giving and sharing products instead of engaging in consumerism. With this, you will save money and meet new people. Check out the movement here.

Run through the sprinklers. If you don’t want to go to a pool or one’s not nearby, turn on the sprinklers, suit yourself and your kiddos up in swimsuits, and take off! It’s a quick way to cool down.

Go thrifting. This is something all the cool kids are doing – and have been for some time. Find out where your local second-hand shops are and dive in. You could find some designer gems for very little cash. And usually the stores have A/C, so this is yet another activity to beat the heat.

Stargaze. Wait until after sunset, grab a cool beverage and find a place where you can just sit and be amazed at the universe. If you look long enough, you’ll see shooting stars. After all, nature is one of the best free playgrounds we have.

These are just a few of the many things you can do to lower costs this summer. We’re not saying don’t watch TV, but just that there are so many other things to do that will bring you happiness – and on a budget.

Sources

67 Free & Fun Things to Do This Summer | Apartment Therapy

Small Financial Habits to Set You Up for a Successful 2026

Personal Versus Enterprise Goodwill: What You’re Really Selling

4 min read

Picture two heating-and-cooling companies at opposite ends of the same town. Same revenue, same trucks, same crew. The first one runs on its owner, a guy who spent 20 years building a name, and people call the office because they want him on the roof. The second runs on a brand, a dispatch system, and a phone number folks have had memorized since the ’90s. On paper, the two look like twins. But put them up for sale, and they fetch very different prices – and the reason is goodwill, the chunk of value that has nothing to do with the trucks and everything to do with why the phone keeps ringing.

The Value That Stays

That second company has what valuators call enterprise goodwill. It lives in the business itself: the location people drive past, the name they already trust, the systems that keep running through the two weeks when the founder goes to Cabo. Whoever buys the place inherits all of it, and that is what a buyer pays up for. They are not wagering on one person’s stamina. They are buying an operation that keeps producing after the seller is a memory.

The Value That Walks Out the Door

The first company has personal goodwill, where owners talk themselves into a number the market will not pay. When the clients are loyal to the owner, the referrals come because of the owner, and the day he retires, half the revenue walks out behind him; you cannot deed that over the way you hand across the keys to a van. A business built on one person almost always sells for less, because the buyer is left guessing how much of it actually survives the handoff.

It can be salvaged. A tight employment agreement and a non-compete can keep the seller out of the market long enough for relationships to take root with the new owner. In a lot of these deals, choreographing that single transfer is the whole negotiation.

It Comes Up in Divorce, Too

The same split shows up in divorce, usually not the way people expect. State law varies, but courts tend to treat enterprise goodwill as a divisible marital asset while setting personal goodwill aside, on the logic that it is really the spouse’s future earning power rather than property to carve up. Arizona is one of the states that has swept professional goodwill into the marital estate anyway, in the right case. Wherever it gets heard, someone has to draw that boundary, and a lot of money rides on where the line lands.

Putting a Dollar On It

So how do you put a dollar figure on something this slippery? One of the cleaner tools is the With and Without Method. You build two futures for the company and discount each one back to today. In the first, the key owner stays. In the second, he walks and starts competing down the street. The cash flow that bleeds out of that second version is the value the first one was quietly protecting.

Go back to our first owner and say his presence is worth a formal non-compete. With him locked in, free cash flow runs $10 million a year. With him loose and competing, it slips to $7.5 million. Discount each stream at 7.5 percent over eight years, and the protected version is worth about $58.6 million in today’s dollars against roughly $43.9 million without. That gap, near $14.6 million, is the price tag on the non-compete.

A real engagement would not leave it that clean. I would model how fast the business rebuilds the revenue it lost and weigh the result for how likely the owner is to actually go compete. But the bones of it are exactly that.

What to Take Away

Here is the part worth holding onto. Get this distinction wrong, and you can leave seven figures on the table at a closing or in front of a judge. The line between personal and enterprise goodwill does not draw itself. If you are eyeing an exit, weighing an offer, or fighting over a number in a dispute, get someone to mark it before the other side marks it for you.

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