Author: Service2Client

Rules of the Roth

4 min read

Rules of Roth IRAWith a Roth IRA, the owner can make limited contributions each year. In 2025, the limit is $7,000; $8,000 if age 50 or older. Only people who earn less than $150,000 (single filers) or under $236,000 (married filing jointly) can make a full Roth IRA contribution. While contributions do not qualify for a tax deduction, earnings are not taxable once the account has been open for five years. Contributions, which were previously taxed as income, can be withdrawn at any time.

Once you open and contribute to a Roth IRA, the five-year countdown begins before you can take any earnings out tax-free. However, the holding period is actually measured from Jan. 1 of the year you made the first contribution.

For example, if you opened your Roth IRA on Dec. 31, 2024, the holding period backs up to Jan. 1, 2024. Therefore, your holding period is technically only four years instead of five to avoid paying taxes on earnings.

However, it gets even better because you are allowed to make a Roth contribution for the prior tax year up until tax day in April. That means if you open a Roth in April 2025 and designate your contribution for 2024, your holding period is shortened by another four months.

This is why it’s important to open a Roth as soon as possible, even if you cannot contribute a lot of money in the near future. It makes a great strategy for a high school or college student with job earnings to at least open a Roth for future use. While there is no upfront tax deduction, you may withdraw contributions penalty and tax-free at any time – which makes it ideal as both a liquid emergency account as well as long-term savings.

As for withdrawing earnings, the rules are trickier. As far as the IRS is concerned, contributions are withdrawn first and then earnings. Note that when earnings are withdrawn before age 59½, the amount is subject to both taxes and a 10 percent penalty, but there are exceptions that waive the penalty. For example, if your account is less than five years old, you can still withdraw earnings (penalty-free but still subject to taxes) for the following purposes:

  • To help pay for a first-time home purchase (up to $10,000)
  • To pay for college
  • To pay certain emergency expenses
  • To pay for expenses in connection with a federally qualified disaster
  • To pay expenses related to a birth or adoption
  • To pay for unreimbursed medical expenses or health insurance if unemployed
  • If you become disabled or are a survivor of domestic abuse

If your account is older than five years, you can avoid both taxes and the penalty if the funds are used to help pay for a first-time home purchase (up to $10,000) or if you become disabled.

After age 59½, there are no taxes and no penalties for any money withdrawn from a Roth IRA for any reason.

Multiple Roths

The same five-year holding period applies to all the Roths you own, with the clock starting at the first contribution to your first Roth. This means that if five years after the date you open your first Roth, you open a new Roth and contribute a bunch of income, you won’t have to wait another five years to tap those earnings tax-free. This perk does not apply to a Roth 401(k) account, which maintains a separate five-year holding period.

Conversion Benefits

When you convert a traditional IRA or 401(k) to a Roth (assuming your plan allows in-service withdrawals or in-plan conversions), you must pay income taxes in the year the money is converted. However, there are some very good reasons to convert:

  • Tax-Free Income – By converting assets when you’re still working, you can pay the taxes owed with current income, but from that point on, the Roth IRA will grow tax-free. This is particularly helpful in diversifying your tax liability during retirement if you have other income sources (e.g., pension, brokerage account, Social Security).
  • Eliminate RMDs – If you continue working into your 70s, you may continue contributing to your Roth IRA, and assets converted from a 401(k) or traditional IRA are no longer subject to required minimum distributions. This way, your full account balance has the opportunity to continue growing for later retirement and/or for your heirs.

Be aware that converting a taxable retirement account to a Roth IRA begins its own five-year timetable, so convert long before you need to begin withdrawals.

Analyzing Return on Ad Spending

3 min read

What is Return on Ad SpendingReturn on Ad Spend (ROAS) is one way to help advertising and marketing professionals and investors analyze how well promotions do (or don’t) produce sales. It helps advertisers develop data based on their campaigns’ revenue production (or lack thereof). Understanding how this metric is calculated and how to analyze ROAS is essential for businesses to monitor and increase their advertising performance.

Known as a Key Performance Indicator (KPI), ROAS determines how much sales are generated per dollar invested on advertising outlays. It separates advertising costs from the company’s costs, and it focuses on:

1. The differences between advertising income and advertisement expenses

2. Assisting companies with creating efficient budgets

3. Identifying unprofitable campaigns

How ROAS is calculated:

Return on Ad Spend (ROAS) = Revenue generated from ad campaign/Total advertising costs for a specific campaign

The revenue generated from an ad campaign is the revenue immediately assignable to promotions utilizing a tracking tool.

Total advertising costs for a specific campaign are expenses explicitly connected to the advertising platform.

The resulting calculation determines the business’ return on ad spend, giving owners and managers an idea of how well (or not) ad spending impacts the company’s sales. It similarly enables business owners to reconcile the company’s budgeted advertising costs against growing sales metrics. The following hypothetical breakdown shows what a positive scenario looks like:

A ROAS of 10 = $10 of revenue was earned for every $1 spent on ads. This would translate into:

Total Ad Spend: $10,000

Revenue Generated: $100,000

ROAS = $10

ROAS = 10:1

Important considerations when calculating this include factoring in merchant expenses, costs for digital content production, and costs incurred from media platforms. It’s also important to consider that it’s not always cut-and-dry as to how and what specific ads convert potential customers into paying customers. Assigning the exact ad platform or campaign is a common problem when determining the exact ROAS.

Credit analysis conducted by lenders evaluates ROAS to determine the sales ability of companies seeking loans, especially with promotion-centric companies. The higher the ROAS, the less risk there is and the more reliable the revenue from each campaign. For merger and acquisition professionals, ROAS trends offer insight into a target company’s sustainability. It helps determine if a company’s advertising campaigns can sustain themselves and keep generating future growth.

It’s equally important to see how ROAS compares against other metrics. While ROAS focuses on revenue generated per dollar spent, the advertising-to-sales ratio looks at the total proportion of sales driven by advertising efforts. Similarly, while ROAS measures the revenue per ad spend, return on investment analyzes the comprehensive profitability for the complete level of marketing expenses – not exclusively advertising. While ROAS is a short-term measure on instant sales, Lifetime Value looks at the customer’s history with the company and the entire revenue the company earns from the relationship.

While this metric is helpful for many professionals, it’s important to ensure that only necessary data is included and customer conversion is monitored precisely in order to get the best output.

5 Tips on How to Track Monthly Expenses

4 min read

5 Tips on How to Track Monthly ExpensesKeeping tabs on what you spend isn’t hard. It just has to become a habit. But here’s the good news: Studies show that it only takes an average of 66 days to form a habit. A little over two months. With these easy ways to track your monthly expenses, you’ll be a regular money manager in no time.

Add Up Your Monthly Income

We’re talking about your regular paychecks – and extras from any side hustles. Have irregular income? No problem. Look at what you’ve made in the past few months and list the lowest amount as this month’s planned income. When you know how much you have to work with, you’ll be ready to dive in.

Calculate Your Monthly Expenses

Open up your bank account and start dividing your expenses into buckets, e.g., rent/mortgage, food, utilities, etc. The numbers may surprise you. Think about your needs and wants. What’s really important? What can you live without? Where can you cut? Or if you have a surplus, where should this money go? Regardless, here’s a good way to categorize your income:

  •  Four walls (food, utilities, shelter/housing, and transportation)
  • Other essentials (insurance, debt, childcare, etc.)
  • Extras (entertainment, restaurants, etc.)
  • Giving (10 percent of your income)
  • Savings (varies based on your resources)

Create a Budget

Now that you know how much you make and what you spend, do a little mat,h and you’ll have a sum total. Dave Ramsey recommends a zero-based budget, where you give every dollar a job to do, such as spending, saving, or giving. But in these categories, you’ll want to get more detailed. For instance, under Food, you might list Dining Out and Groceries. When you get specific, it’s easier to track where you spend.

Track Any Money You Earn and Spend

When you get paid, enter the amount. When you spend, enter the amount. This repetition contributes to forming a habit. If you need a bit more immediacy and structure, get a handy budget app for your phone. Mint (it’s free!), YNAB (You Need a Budget), and Simplifi are a few of many others. It might well be a fail-safe idea, given how much we humans love to be on our phones.

While tracking is super important for those who have a regular income, it’s even more important if you have an irregular income. As mentioned above, the recommendation is to plan around the lowest amount of money you make. If you happen to earn more in any given month, adjust the number and your current money goals. This way, you can cover some extras in your budget.

Tracking also applies to the money you spend. Enter every single transaction, then do that math. Whether your expenditure is coming from your bank account or piggy bank, keeping up-to-date on outflow is key to not overspending.

Create a Regular Rhythm for Tracking

This cadence is totally up to you and what works best for your life. It might be daily or weekly – or before you leave the gas station or grocery store. When you enter the amount of what you spent right after you do it, chances are you won’t forget about it. (Nod to the budget app!) If you’re married and/or have a partner, having a central location for money management increases communication and accountability. Neither one of you can say, “Oh, I didn’t know you were going to spend all our fun money on pickleball lessons. I wanted to sign us up for bridge at the community center.”

Having a handle on monthly expenses (tracking them) means being more aware of what’s going on, avoiding surprises, and being in control. And that’s a good thing for everyone.

Sources

How Long Does it Take to Build a Habit?

How to Track Your Monthly Expenses – Ramsey

Beefing Up Laws for Illegal Immigrants and Preparing for Future Disasters

3 min read

S 5,HR 152,HR 153,HR 164,HR 471, HR 187, HCon Res. 1Laken Riley Act (S 5) – A holdover from the last congressional session, this bill was re-introduced by Sen. Katie Britt (R-AL) on Jan. 6. It is similar to a 1996 law, the Illegal Immigration Reform and Immigrant Responsibility Act, that deports illegal immigrants who are found guilty of serious crimes. This new bill enables the government to detain and deport illegals who are arrested for serious crimes or misdemeanors (such as shoplifting), but they do not have to be charged or found guilty. The legislation passed in the Senate on Jan. 20 and the House on Jan. 22, and it is expected to be the first bill signed by the Trump administration.

Federal Disaster Assistance Coordination Act (HR 152) – This legislation would amend the Disaster Recovery Reform Act of 2018 to authorize a new study designed to streamline and consolidate data regarding the collection of preliminary damage assessments. It was introduced by Rep. Mike Ezell (R-MS) on Jan. 3, passed in the House on Jan. 13, and is currently in the Senate.

Post-Disaster Assistance Online Accountability Act (HR 153) – This is a disaster companion bill, also introduced by Rep. Mike Ezell (R-MS) on Jan. 3. It would create an online repository for recipients of Federal disaster assistance to meet specific reporting requirements. The bipartisan bill passed in the House on Jan. 14, and its fate also lies with the Senate.

POWER Act of 2025 (HR 164) – Also known as the Promoting Opportunities to Widen Electrical Resilience Act, this non-controversial bill was passed on Jan. 15 under a House procedure called “suspension of the rules.” It would allow Federal agencies to provide essential assistance for the emergency restoration of power and not restrict utility company recipients from also qualifying for hazard mitigation assistance if necessary. The bill amends the previous Robert T. Stafford Disaster Relief and Emergency Assistance Act (1988), which details the process for federal government assistance to state and local governments following a major disaster. The bill was introduced by Rep. Valerie Hoyle (D-OR) on Jan. 3 and currently lies with the Senate.

Fix Our Forests Act (HR 471) – The purpose of this bill is to expedite improvements in forest management activities on National Forest public lands under the jurisdiction of the Bureau of Land Management to return resilience to overgrown, fire-prone forested lands. This bipartisan legislation was introduced by Rep. Bruce Westerman (R-AR) on Jan. 16 and passed in the House on Jan. 23. It currently lies with the Senate.

MAPWaters Act of 2025 (HR 187) – This bipartisan bill authorizes the standardization, consolidation, and publication of federal waterways data regarding outdoor recreational uses by the public, as tracked by federal land and water management agencies. The legislation was introduced by Rep. Blake Moore (R-UT) on Jan. 3, passed in the House on Jan. 21, and is under consideration in the Senate.

Regarding consent to assemble outside the seat of government (HCon Res. 1) – This concurrent resolution was introduced on Jan. 3 by Rep. Michelle Fischbach (R-MN). It is a bipartisan resolution, agreed to by all four majority and minority leaders in both houses, that would allow members of the House and the Senate to assemble at a location outside the District of Columbia if it is in the public interest. The resolution passed in the House on Jan. 3 and currently rests in the Senate.

7 Ways to Start 2025 with Fresh Finances

4 min read

7 Ways to Start 2025 with Fresh FinancesHere we are in yet another new year. The obligations and celebrations are over. Chances are, you’ve spent a fair amount over the holidays and might need a plan to help kickstart 2025 with some actionable financial goals. Here are a few ideas.

Create a Budget

This one never gets old. Why? It’s one of the keys to successful budgeting. You can set up a budget for the year that includes essentials, entertainment, and nice-to-haves, aka your Wish Farm. Then place it in your planner or app – there are many good ones out there. In fact, there’s a TikTok trend called loud budgeting, where people openly discuss their financial goals on social media – why they do or don’t want to buy something. If this is your thing and it helps you stay on track, go for it! If not, a good old-fashioned planner works just as well.

Bucket Your Money

This is the next step after the aforementioned. Split your money into categories: food, rent/ mortgage, utilities, medical, entertainment, vacation, etc. Apps can help you parse out these groups. You might also set up separate banking accounts for some of the necessities so you’ll know to leave them alone and not dip into them, tempting as it may be.

Set Up Auto-Drafts

Let’s say you’re saving for your child’s college fund or a down payment on a car. When you create an auto-draft for a certain amount, you’ll never miss that deposit. If you need to tweak the amount during the year, do it. Here’s the bottom line: 1) You’ll learn to live on less, and 2) you’ll be on the way to making your dreams come true.

Look for Savings Deals

Don’t just settle for the interest rate your current bank is offering. There are many options out there to grow your money. But first, do you want to lock into a fixed rate? This can be useful for long-term goals, such as buying a property. Or do you want an easy-to-access account with the ability to withdraw cash for emergencies or short-term needs like birthday or wedding gifts? Shop around.

Cancel Seldom-Used Subscriptions

Scour your bank statement. Do you need all those online magazine subscriptions? How about newsletters you pay for – the ones you rarely read? Purge your subscriptions, then see how much you’ll save. If you’re so inclined, you could put these dollars toward a gym membership. January is when all the specials appear: zero joining fees, if not a seriously cut rate.

Start a Savings Challenge

Try putting away a small amount every month. Get in the habit of emptying your pockets or coin purse. Safeguard your coins in a mason jar, and then transfer them monthly into your savings account. The next month, increase how much you contribute. Pennies, nickels, dimes, and quarters add up! After a year, you might be surprised how much you’ve saved.

Decide on Goals

These can be small or large. It’s up to you. Spend some time thinking about what’s important. Do you want to remodel your house? Contribute to a beloved charity or cause? One resource you might want to consider setting up is an emergency spending pot. This is essential and sometimes overlooked. Regardless of what you decide, figure out your parameters: how much to set aside, how often, and by when. Having financial targets gives you something to look forward to. Best of all, when you achieve your goal, it’s an awesome feeling.

More often than not, New Year’s resolutions center on getting physically fit. But if you stay the course with your finances, you’ll most definitely be, wait for it … fiscally fit!

Sources

10 things you can do right now to start 2025 with fresh finances

https://www.msn.com/en-us/money/personalfinance/10-things-you-can-do-right-now-to-start-2025-with-fresh-finances/ar-AA1vnhyg

How Reporting Might be Less Complex in 2025

4 min read

How Reporting Might be Less Complex in 2025A Dec. 3 proposal from FASB’s Accounting Standards Update (ASU) might provide some flexibility for private businesses and select nonprofits. “Financial Instruments – Credit Losses (Topic 326)” looks at measuring credit losses for contract assets and accounts receivable for these entities.

When it comes to determining projected credit losses for current accounts receivables and current contract assets, businesses face immense resource needs and reporting requirements, including for assets acquired prior to the publication dates of financial statements.

With public comments being received through Jan. 17, 2025, industry professionals have reported that when it comes to gauging projected credit losses for current contract assets and current accounts receivable, there’s a massive undertaking and validation necessary for assets collected prior to financial statement issuance dates. Industry professionals argue that being able to factor in collections post-balance sheet date in calculating expected credit losses would reduce the complexity for preparers, whereas, for third parties, including investors and others who utilize financial statements, it would provide them with valuable data.

FASB proposed an amendment to ASC 326 207 to allow private companies and certain not-for-profit entities to employ a more flexible and efficient way to better gauge their projected credit losses for current contract assets and accounts receivable that originate from transaction accounts under ASC 606.

Working with the Private Company Council (PCC) to look at stakeholders’ concerns that estimating projected credit losses can be exorbitant and complicated for financial proceedings, FASB is soliciting comments on whether or not to expand the scope of entities included for ASU standards, along with different asset classes.

Current Criteria

According to ASC 326-20, when expected credit losses are estimated by entities, an entity must evaluate their ability to garner cash flows via the lens of contemporary economic circumstances, rational and documented projections, and past losses. Past losses may need to be fine-tuned to approximate project credit losses if past circumstances change from present conditions or from well-ground estimates and documented projections. Another consideration when formulating credit loss projections is that entities aren’t required to factor in collections obtained post-balance sheet date.  

Proposed Additions

When it comes to the proposed additions, FASB speaks to a practical expedient and an accounting policy election. The practical expedient concerns an entity’s well-grounded, data-dependent projections. If an entity chooses the practical expedient, it would be able to factor in collection activity beyond the balance sheet date when projecting expected credit losses.

Practical Expedient

To formulate projections that are rational and based on verified accounting details, this so-called practical expedient can be chosen by the entity that assumes its present balance sheet conditions will last for the entire projection time frame. Choosing a practical expedient also implies that an entity’s accounting policy will factor in collection activity past its balance sheet date when gauging expected credit losses. Specifically, under 326-20-30-10C for the practical expedient, during the projection time frame, an entity will maintain the exact circumstances of the balance sheet throughout the rational and data-based projection period.

If a business, for example, has determined a particular client is facing monetary challenges, it would account for its client’s financial issues through projections of estimated expected credit losses for said client, even though it has not impacted the business’ historical loss experience or if the business is up to date as of the balance sheet date.

Accounting Policy Election

Per 326-20-30-10E, when a practical expedient from 326-20-30-10C through 30-10D is chosen by entities for their accounting policy election when projecting credit losses, it signals that the entity factors in collection activity after the balance sheet date, but prior to the date of financial statement issuance. If an entity uses one or both of the practical expedient and/or accounting policy elections, disclosure is mandatory.

Conclusion

Lastly, such advice would be administered on a forward-looking basis, and both of these entities (PCC and FASB) will make the ultimate findings and guidelines of the implementation dates once industry professionals’ comments are considered. However, entities will likely be able to utilize these guidelines sooner.

For eligible companies, these standards could provide greater flexibility and the ability to divert resources to more productive allocations.

Securing Client Data: The Importance of Encrypted Apps

4 min read

Securing Client DataThe Salt Typhoon cyberattack is among recent cyberattacks that reaffirm the urgent need for robust data security measures. This attack targeted major telecommunications providers, compromising critical infrastructure and potentially exposing vast amounts of sensitive data. With cyberthreats becoming more sophisticated, businesses and individuals must prioritize data security to maintain trust and compliance.

The Role of Apps in Managing and Protecting Client Data

Businesses need apps because they make the work easier and more organized. Apps help teams communicate better, manage tasks, and share information quickly, no matter where people are. The apps also simplify handling customer needs, improving service, and tracking business performance. Generally, apps save time while helping businesses work smarter and stay competitive.

One of the most critical uses of apps is managing client data. This data includes personal details like names and addresses. It also includes financial information such as bank details, as well as business-specific data like contracts and project plans. Losing or exposing this sensitive information can lead to severe consequences, including financial losses, legal penalties, and damaged reputations. Clients may lose trust in your business, leading to lost opportunities and reduced customer loyalty. By using apps effectively, businesses can better organize, safeguard, and utilize client data to build stronger relationships and maintain long-term success.

Encryption: A Critical Security Measure

Encryption has become crucial in modern data security. It transforms readable data into an unreadable format, ensuring only authorized parties can access the information. There are various types of encryptions, including end-to-end encryption (E2EE), which protects data during transmission, and at-rest encryption, which secures stored data.

Following the Salt Typhoon cyberattacks, the FBI and Cybersecurity and Infrastructure Security Agency (CISA) issued a joint advisory urging individuals and organizations to prioritize using encrypted communication channels. Given the vulnerability of traditional communication methods, the agencies strongly recommended adopting end-to-end encrypted messaging apps like Signal for secure communication. This recommendation aims to mitigate the risks associated with compromised telecommunication networks. It also helps protect sensitive information from unauthorized access. Even if cybercriminals intercept the data, they cannot decipher it without the encryption key. This layer of protection mitigates the risks of unauthorized access and data breaches, making encryption an essential tool for businesses.

The Role of Encrypted Apps

  1. Enhanced security: Encrypted apps provide a critical layer of defense against sophisticated cyberattacks. By encrypting data both in transit and at rest, these apps ensure that even if communication networks are compromised, sensitive information remains inaccessible to attackers.
  2. Compliance with regulations: With so many ongoing cyberattacks, regulatory scrutiny of data security practices has intensified. Encrypted apps can help businesses comply with relevant regulations, such as the GDPR and CCPA, by demonstrating a commitment to data protection.
  3. Building trust and customer loyalty: Customers are increasingly wary of data breaches in an era of heightened cybersecurity concerns. Utilizing encrypted apps demonstrates a commitment to data security and privacy, fostering trust and loyalty among clients.
  4. Protecting business operations: Encrypted apps are crucial for protecting client data and safeguarding critical business information, such as intellectual property, financial records, and internal communications. This ensures the continuity and integrity of business operations, even in the face of advanced cyber threats.

Choosing and Implementing Encrypted Apps

When selecting and implementing the right encrypted apps, it is important to consider them carefully. First, it is good to consider industry-specific needs as different industries have different data security needs. For example, while a healthcare provider must comply with Health Insurance Portability and Accountability Act (HIPAA) regulations, a business in the financial industry must adhere to banking regulations. This calls for selecting industry-specific apps.

Businesses also must prioritize apps with robust security features, such as strong encryption algorithms, multifactor authentication, and regular security updates. It is also important to carefully review the data privacy policies of app providers and ensure compliance with relevant regulations.

Effective employee training is also essential for successfully implementing encrypted apps. Employees must be educated on the importance of data security, the proper use of encrypted apps, and best practices for handling sensitive information.

Conclusion

Client data is one of a business’s most valuable assets, and protecting it is paramount. The growing threat of cyberattacks and the increasing complexity of data protection regulations make encryption an essential tool. By embracing encrypted communication channels, businesses can significantly enhance their resilience against sophisticated cyberattacks, protect sensitive client data, and maintain a competitive edge in today’s digital economy.

National Security

4 min read

National Security, S 3613, HR 5009, HR 2950, S 4367, HR 9668, HR 9716Improving Federal Building Security Act of 2024 (S 3613) – The Federal Protective Service (FPS) contracts security guards to control access to government facilities and screen visitors to detect prohibited items, such as pepper spray and batons. Earlier this year, FPS investigators conducted a covert test at certain federal buildings in which the guards failed to detect prohibited items about 50 percent of the time. In response, Congress passed this bill requiring Facility Security Committees to respond to security recommendations issued by the FPS. It also mandates that the Homeland Security Department submit an unredacted report to Congress regarding FPS surveillance technology recommendations as well as summarize the FPS recommendations that buildings accepted or rejected. However, no additional funding for security is appropriated by the bill, which will sunset five years following enactment. The act was introduced on Jan. 18, 2024, by Sen. Gary Peters (D-MI). It passed in the Senate on March 23, the House on Dec. 10, and was signed into law on Dec. 17.

Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025 (HR 5009) – This year’s version of the annual funding bill features a 14.5 percent increase in pay for junior enlisted servicemembers, as well as a 4.5 percent pay raise for all other personnel. The legislation also provides cost-of-living allowances per location, improved housing/barracks repair programs, more access to medical and mental health services, and increased employment support for military spouses. The legislation was introduced by Rep. David Joyce (R-OH) on July 27, 2023. This is a bipartisan bill that has passed in both the Senate and the House with various changes. It is currently awaiting signature by the White House for enactment.

Coastal Habitat Conservation Act of 2023 (HR 2950) – Introduced by Rep. Jared Huffman (D-CA) on April 7, 2023, this bill passed the House on Sept. 24, 2024, the Senate on Nov. 21, and was signed into law on Dec. 11. The legislation empowers the Coastal Program of the United States Fish and Wildlife Service to increase efforts to assess, protect, restore and enhance key coastal environments that provide fish and wildlife habitats for certain federal trust species.

Thomas R. Carper Water Resources Development Act of 2024 (S 4367) – This legislation was introduced by Sen. Thomas Carper (D-DE) on May 20, 2024. It passed in the Senate on Aug. 1 and in the House (with changes) on Dec. 10; the final bill is expected to be approved and signed into law by the end of the congressional session. This bipartisan bill is designed to improve the nation’s water resources infrastructure, including ports and harbors, inland waterway navigation, and flood and storm protection; it also strengthens our resilience during natural disasters. The legislation also institutes reforms at the U.S. Army Corps of Engineers in order to streamline processes and deploy projects faster.

SHIELD Against CCP Act (HR 9668) – Introduced on Sept. 18, 2024, by Rep. Dale Strong (R-AL), this bill would establish a task force working with the Department of Homeland Security. The group’s sole focus would be on countering terrorism, cybersecurity, and border/port security related to threats posed by the Chinese Communist Party. The legislation is in response to recent CCP activities such as stealing intellectual property and technology, threats to economic supply chain security and critical infrastructure, and surveillance activities targeting U.S. defense sites and even American citizens. The bipartisan bill passed in the House on Dec. 10 and is currently in the Senate.

Increasing Baseline Updates Act (HR 9716) – In the first quarter of each year, the Congressional Budget Office provides Congress with an annual baseline 10-year projection of the budget and economy based on the fiscal impact of legislative proposals. Updates are released in Q2 and Q3 to reflect newly enacted laws and economic conditions. This bill would mandate that the executive branch provide critical data to the CBO by February 1 of each year to produce a more accurate annual budget baseline. The bill passed in the House on Dec. 11 and currently lies with the Senate. It was introduced by Rep. Blake Moore (R-UT) on Sept. 20, 2024.

The Social Security Fairness Act of 2023: More Retirement Income for Teachers, Police, Firefighters & Gov. Workers

3 min read

The Social Security Fairness Act of 2023, More Retirement Income for Teachers Police Firefighters & Gov WorkersThe Social Security Fairness Act of 2023, formally known as H.R. 82, aimed at ending two provisions in the Social Security system that affect public sector employees who have earned pensions from jobs not covered by Social Security. These provisions are the Windfall Elimination Provision and the Government Pension Offset, both of which reduce or eliminate Social Security benefits for workers who have worked in both public-sector and private-sector jobs.

The Problem: WEP and GPO

The Windfall Elimination Provision and the Government Pension Offset were originally designed to prevent public sector workers from receiving larger Social Security benefits than they would have been entitled to had they worked in jobs covered by Social Security for their entire careers. However, critics argue that these provisions disproportionately harm workers who have spent a significant portion of their careers in public service, such as teachers, police officers, firefighters, and other state and local government employees.

Windfall Elimination Provision (WEP):

The WEP reduces the Social Security benefits of individuals who have worked in both the private sector (where they paid into Social Security) and the public sector (where they often did not contribute to Social Security). Typically, Social Security benefits are based on an individual’s 35 highest-earning years. The WEP alters the formula used to calculate benefits for individuals with fewer than 30 years of substantial earnings in Social Security-covered employment, leading to a lower Social Security benefit than they would otherwise be entitled to. For many, this results in a significant reduction in the monthly payment they would have received under the standard Social Security formula.

Government Pension Offset (GPO):

The GPO affects spouses and widows/widowers of Social Security beneficiaries. Under this provision, individuals who receive a government pension from work that was not covered by Social Security (such as state or local government employees) see a reduction in their spousal or survivor benefits from Social Security. The offset is calculated by reducing the spousal or survivor benefit by an amount equal to two-thirds of the government pension. This can leave many public employees with little to no spousal or survivor benefits despite their spouse having paid into Social Security.

What H.R. 82 Seeks to Accomplish

By eliminating both the WEP and GPO, the bill aims to ensure that public sector workers who have earned Social Security benefits through their work in the private sector are not penalized by reductions in those benefits. It also seeks to provide fairer treatment for the spouses and survivors of government employees who may otherwise see their Social Security benefits reduced or eliminated entirely.

The bill has garnered bipartisan support, as lawmakers from both sides of the aisle recognize the fairness of eliminating these provisions, which many see as an unjust penalty against those who have dedicated their careers to public service. H.R. 82, if passed, would provide much-needed relief to millions of retirees, many of who are struggling with the financial impacts of these provisions.

Conclusion:

The introduction of H.R. 82, the Social Security Fairness Act of 2023, marks a crucial point in the ongoing debate over Social Security benefits for public sector workers. By eliminating the Windfall Elimination Provision and the Government Pension Offset, the bill would restore fairness and equity for millions of public employees who have spent their careers in service to their communities. As this bill progresses, it will likely remain a significant issue in discussions surrounding Social Security reform and the treatment of public sector employees.

President Joe Biden signed H.R. 82, the Social Security Fairness Act, into law on Sunday, January 5, 2025, at 3:00 p.m. Central Time Zone.

Tips for Tax Season

4 min read

Tips for Tax SeasonWhether you file your income tax return early or at the last minute, there are ways to simplify the process and reduce what you owe – or even increase your refund – before the deadline.

Filing Simplification Tip

Once you receive your W-2 and/or 1099 tax forms, see what income tax bracket you fall under to determine whether you should itemize expenses or take the standard deduction. Thinking about this step first can save you a lot of time. If you don’t come near the standard deduction amount, you will not be itemizing expenses. And if you are not itemizing expenses, you won’t have to gather all the receipts (e.g., mortgage interest, property tax, state and local income taxes, and sales tax paid in 2024).  

2024 Tax Season Income Tax Brackets

 
Single filer Married filing separately Married filing jointly (includes qualifying widow/er) Head of Household Tax Rate

$0 to $11,600 

$0 to $11,600 

$0 to $23,200 

$0 to $16,550 

10%

$11,601 to $47,150 

$11,601 to $47,150 

$23,201 to $94,300 

$16,551 to $63,100 

12%

$47,151 to $100,525 

$47,151 to $100,525 

$94,301 to $201,050 

$63,101 to $100,500 

22%

$100,526 to $191,950 

$100,526 to $191,950 

$201,051 to $383,900 

$100,501 to $191,950 

24%

$191,951 to $243,725 

$191,951 to $243,725 

$383,901 to $487,450 

$191,951 to $243,700 

32%

$243,726 to $609,350 

$243,726 to $365,600 

$487,451 to $731,200 

$243,701 to $609,350 

35%

$609,351 or more 

$365,601 or more 

$731,201 or more 

$609,351 or more

37%

2024 Tax Season Standard Deductions

Single filer and married filing separately Married filing jointly (includes qualifying widow/er) Head of Household

$14,600

$29,200

$21,900

Retirement Saving Tips

It’s not too late to contribute to an IRA. Both the traditional and Roth IRAs allow you to make contributions for 2024 up until the tax-filing deadline of the following year – which this year is Tuesday, April 15. The advantage to this later deadline is that you can complete your taxes before they are due, then adjust them to reduce your tax liability if needed by contributing to your IRA. The total maximum contribution you can make to all of your IRAs combined (both Roths and traditional) is $7,000 for 2024 or $8,000 if you are 50 years or older.

However, if you have a Roth IRA, there are restrictions to contributions based on your 2024 income. You may make the maximum contribution to your Roth only if your 2024 modified adjusted gross income (MAGI) is less than a certain threshold.

Filing Status MAGI Contribution amount

Single and Head of Household filers

Below $146,000

Between $146,001 and 161,000

Above $161,000

$7,000/$8,000 (age 50+)

Phased (IRS Worksheet 2-2)

Nothing

Married filing jointly

(includes qualifying widow/er)

Below $230,000

Between $230,000 and $240,000

Above $240,000

$7,000/$8,000 (age 50+)

Phased (IRS Worksheet 2-2)

Nothing

Be aware that the amount of deduction you can claim for a traditional IRA contribution may be limited if you or your spouse are covered by a retirement plan at work.

Filing Status MAGI Deduction amount

Single and Head of Household filers

$77,000 or less

Between $77,000 and 87,000

$87,000 or more

Full deduction

Partial (IRS Worksheet 1-2)

None

Married filing jointly

(includes qualifying widow/er)

$123,000 or less

Between $123,000 and 143,000

$143,000 or more

Full deduction

Partial (IRS Worksheet 1-2)

None

Married filing separately

Less than $10,000

$10,000 or more

Partial (IRS Worksheet 1-2)

None

If you make a traditional and/or Roth IRA contribution by the April 15 deadline, you may qualify for the Retirement Saver’s Credit (also available if you contributed to an employer plan by Dec. 31, 2024). The maximum credit is $1,000 ($2,000 for married couples), and it can increase your refund or reduce the tax you owe. However, the saver’s credit is subject to other deductions, credits, and income restrictions.

Filing Status MAGI

Single and Married filing separately

up to $57,375

Married couples filing jointly

(includes qualifying widow/er)

up to $76,500

 

Head of Household Filers

up to $57,375

Work with an experienced tax preparer to take advantage of legitimate deductions and credits to ensure that you only pay what is required for your situation.