Global confidence among accountants and finance professionals globally declined moderately in the third quarter of this year and is now at its lowest level since Q4 2023, although confidence increased in North America, according to the quarterly Global Economic Conditions Survey from the Association of Chartered Certified Accountants and the Institute of Management Accountants.

The survey, released Tuesday, found CFOs’ confidence also declined globally amid a sharp deterioration in their assessment of new orders. Even though confidence improved in North America, it recovered less than half of its previous decline. In contrast, there was a significant decrease in confidence in the Asia Pacific region. Concerns about the continued weakness of the Chinese economy probably weighed on sentiment, with the survey being completed before the authorities announced a pivot to a more aggressive policy stimulus. Confidence also fell significantly in Western Europe, driven by a decline in U.K. confidence, amid concerns about tax hikes in the upcoming budget.

The survey also asked accountants to rank their top three risk priorities and for the second consecutive quarter, regulatory change ranked at the top for respondents in financial services, while the economy remained in first place for those in the corporate sector. Both public sector entities and small and medium-sized practices cited cybersecurity as their largest concern. But for the first time, climate change claimed a spot in the top three, with the public sector placing it third. Another first-ever was by region, with Western Europe ranking talent scarcity and retention first.

“The global economy has been quite resilient so far in 2024, but the latest survey of accountants points to some easing in growth at the current juncture,” said ACCA chief economist Jonathan Ashworth in a statement. 

The proportion of respondents reporting increased operating costs remains elevated by historical standards in most parts of the world, although the share of global respondents reporting problems accessing finance moved lower again amid policy easing by central banks. 

“While the increase in confidence in North America is welcome, the key indicators are consistent with some slowing in the U.S. economy and significant caution on behalf of businesses,” said 

Alain Mulder, senior director of Europe operations and global special projects at the IMA, in a statement. “But with the job market showing resilience and the Federal Reserve beginning its rate-cutting cycle, the most likely scenario for the U.S. economy still looks to be a soft landing. 

In North America, confidence improved somewhat in Q3, but recovered less than half of Q2’s decline, and remained below its historical average. The New Orders, Capital Expenditure and Employment indices all declined in different degrees and are well below their historical averages. The proportion of respondents reporting increased operating costs eased to its lowest since Q1 2021, while remaining high by historical standards. 

“All in all, while the increase in confidence is welcome, the key indicators are consistent with some slowing in the U.S. economy and significant caution on behalf of businesses,” said the report. “But with the job market showing resilience and the Federal Reserve beginning its rate-cutting cycle, the most likely scenario for the U.S. economy still looks to be a soft landing. Nevertheless, given the uncertainty faced by firms amid the election, and sharply heightened geopolitical tensions, one cannot rule out a sharper-than-expected slowdown.”

Thomson Reuters has expanded its AI capacities even further with the recent acquisition of Materia, a company which specializes in the technology for tax and accounting purposes. 

Materia’s platform can answer accounting queries in plain language and embed citations so users can verify the information. It also functions as a document workspace, complete with analysis templates that can be saved and shared with a team, allowing for standardized work, as well as automatically generated insights. The platform can also be loaded with the firm’s own guidance and policies, client documents and contracts, and engagement files, as well as create templates based on the firm’s own checklists. There is also a dedicated search engine for authoritative sources like the SEC, IRS and FASB, which also includes documents and integrations within the library. Finally, the platform features an accounting engine that can handle large-scale accounting workflows, from running templates to multi-stage planning.

“Our vision is to provide each professional we serve with a Gen AI assistant. Materia will further accelerate this vision for our tax, audit and accounting customers,” said David Wong, Chief Product Officer, Thomson Reuters. “Once fully integrated, Materia will transform work and unify the entire customer experience with applications across our tax, audit, and accounting portfolio. We are excited by the potential of combining Materia with Thomson Reuters content, know-how, and solutions.”

Thomson Reuters Ventures, an early investor in Materia, led the effort to launch a proof-of-concept initiative that allowed select Checkpoint Edge users to engage with certain Checkpoint content through Materia’s AI assistant.  The promising initial results from this work provides confidence that Thomson Reuters and Materia together can best leverage generative AI to deliver value for Thomson Reuters tax, audit and accounting customers.

This is but the latest AI-related move by Thomson Reuters. Most recently, it released a new auditing solution that uses AI to segment audit testing populations, identify anomalies within the set, and generate all required documentation; called Audit Intelligence Analyze, it is the first in what is promised to be a whole suite of software solutions for auditors called Audit Intelligence. Just a little bit before that, it released Checkpoint Edge with an AI-assisted research feature. 

These moves are part of a larger pivot from the business solutions company towards AI. Around springtime this year, it announced  its first brand refresh in 16 years to emphasize its commitment to investing in products and technology that leverage generative AI. The rebranding — with a new promise and messaging, evolved tone of voice, a new color palette, a simplified logo and modernized fonts — is meant to position the company squarely as a technology company.

The Internal Revenue Service issued its annual inflation adjustments Tuesday for tax year 2025, including changes in the standard deduction, marginal rates, tax credits and dozens of other items as a result of inflation.

The tax year 2025 adjustments mainly apply to income tax returns that will be filed starting in tax season 2026. Revenue Procedure 2024-40 includes detailed information on all the adjustments and changes to more than 60 tax provisions that will affect taxpayers when they file their tax returns in 2026. The tax items for tax year 2025 of greatest interest to the most taxpayers include the following dollar amounts:

• Standard deductions: For single taxpayers and married individuals filing separately for tax year 2025, the standard deduction climbs to $15,000 for 2025, an increase of $400 from 2024. For married couples filing jointly, the standard deduction rises to $30,000, an increase of $800 from tax year 2024. For heads of households, the standard deduction will be $22,500 for tax year 2024, an increase of $600 from the amount for tax year 2024.
• Marginal rates: For tax year 2025, the top tax rate remains 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly). The other rates are: 

• 35% for incomes over $250,525 ($501,050 for married couples filing jointly);
• 32% for incomes over $197,300 ($394,600 for married couples filing jointly);
• 24% for incomes over $103,350 ($206,700 for married couples filing jointly);
• 22% for incomes over $48,475 ($96,950 for married couples filing jointly);
• 12% for incomes over $11,925 ($23,850 for married couples filing jointly); and,
• 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).

• Alternative minimum tax exemption amounts: For tax year 2025, the exemption amount for unmarried individuals increases to $88,100 ($68,650 for married individuals filing separately) and starts to phase out at $626,350. For married couples filing jointly, the exemption amount rises to $137,000 and starts to phase out at $1,252,700.
• Earned Income Tax Credits: For qualifying taxpayers who have three or more qualifying children, the tax year 2025 maximum Earned Income Tax Credit amount is $8,046, an increase from $7,830 for tax year 2024. The revenue procedure includes a table providing the maximum EITC amount for other categories, income thresholds and phase-outs.
• Qualified transportation fringe benefit: For tax year 2025, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking rises to $325, increasing from $315 in tax year 2024.
• Health flexible spending cafeteria plans: For taxable years starting in 2025, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements rises to $3,300, growing from $3,200 in tax year 2024. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount rises to $660, increasing from $640 in tax year 2024.
• Medical savings accounts: For tax year 2025 participants who have self-only coverage, the plan needs to have an annual deductible no less than $2,850 (a $50 increase from the previous tax year), but no more than $4,300 (an increase of $150 from the prior tax year).

The maximum out-of-pocket expense amount rises to $5,700, up from $5,550 in tax year 2024. For family coverage in tax year 2025, the annual deductible is no less than $5,700, increasing from $5,550 in tax year 2024; however, the deductible can’t be more than $8,550, an increase of $200 versus the limit for tax year 2024. For family coverage, the out-of-pocket expense limit is $10,500 for tax year 2025, rising from $10,200 in tax year 2024.

• Foreign earned income exclusion: For tax year 2025, the foreign earned income exclusion increases to $130,000, from $126,500 in tax year 2024.
• Estate tax credits: Estates of decedents who die during 2025 have a basic exclusion amount of $13,990,000, increased from $13,610,000 for estates of decedents who died in 2024.
• Annual exclusion for gifts: The exclusion grows to $19,000 for calendar year 2025, rising from $18,000 for calendar year 2024.
• Adoption credits: For tax year 2025, the maximum credit permitted for an adoption of a child with special needs is the amount of qualified adoption expenses up to $17,280, increased from $16,810 for tax year 2024.

Unchanged for tax year 2025

By law, some items that used to be indexed for inflation in the past are currently not adjusted.

• Personal exemptions: For tax year 2025, they remain at 0, as in tax year 2024. The elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act of 2017.
• Itemized deductions: There is no limitation on itemized deductions for tax year 2025, as in tax year 2024 and preceding, to tax year 2018. The limitation on itemized deductions was eliminated by the Tax Cuts and Jobs Act of 2017.
• Lifetime learning credits: The modified adjusted gross income amount used by taxpayers to determine the reduction in the Lifetime Learning Credit provided in Sec. 25A(d)(1) of the Internal Revenue Code is not adjusted for inflation for taxable years starting after Dec. 31, 2020. The Lifetime Learning Credit is phased out for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for joint returns).