Accounting

It’s never too late for year-end tax planning

Published

2 years ago

December 18, 2024

2024 brought a variety of ups and downs to the U.S. stock market, job market, and individuals’ pocketbooks and financial plans.

The year started with volatility driven by inflation, interest rate adjustments by the Federal Reserve, economic uncertainty, and geopolitical issues. Yet the second half of 2024 has seen some stabilization as inflation receded and the Federal Reserve started to signal a pause in interest rate increases.

However, what does not change is that we need to help our clients navigate their taxes and provide guidance for their financial future amidst the backdrop of uncertainty.

As we approach 2025, now is an important time to sit down with clients to review their goals and do specific year-end planning to help them keep more of what they earn. We have put together a helpful guide to have productive conversations with clients about maximizing retirement contributions, considering tax-smart investment strategies to reduce their tax burden and more.

Maximizing retirement contributions

Whether it is a 401(k) or a SIMPLE IRA, workplace retirement plans are a great option for clients to reduce their taxable income and save more of what they earn for their retirement. You should highly encourage your clients to participate in the employer-offered retirement plan.

If the employer offers a retirement contribution match, clients should try to at least contribute enough to receive the full match. To harness the most tax-efficient elements of the plan, clients should max out the retirement plan, which reduces their overall taxable income. The 401(k)-employee contribution limit in 2024 is $23,000, but those 50 and older can contribute up to $30,500. The employee contribution limit for a SIMPLE IRA in 2024 is $16,000.

Tax-smart investment strategies

End-of-year financial reviews should provide an outline of the gains and losses in your clients’ portfolios. This may identify opportunities for tax-loss harvesting. Tax-loss harvesting is when capital losses from one investment are used to offset taxes owed on capital gains from another investment or personal income.

There are restrictions on the amount you can deduct from personal income taxes due to tax-loss harvesting; however, this could be something to consider if a client navigated several capital losses this year.

Understanding their tax bracket

Work with your clients so they understand where they fall in their tax bracket to determine the most ideal strategies for them. For example, if your client is on the cusp of a higher tax bracket, are there tax-smart strategies that they should consider to stay below that higher tax bracket?

Questions to ask your clients:

Are they planning to sell an asset that would be subject to a capital gains tax? These are taxes that a client could pay on profits made from the sales of an asset like real estate or stock. If your client owned an asset for less than a year, they may owe a short-term capital gains tax depending on their tax rate. If this is the case, you can recommend that they hold onto the asset for longer to reduce their tax burden. On the other hand, if they owned something for more than a year, they may owe a long-term capital gains tax. You might consider investigating tax-loss harvesting opportunities.
Are they invested in their employer’s health savings account or flexible spending account? These accounts set aside money from a client’s paycheck prior to taxes, which will lower their taxable income.
Are there opportunities to defer a payment or a payout from a sale of an asset, collection of severance or other incoming money? If your client was laid off and is collecting a severance or sold a large asset of value (real estate, stocks, etc.), that income amount might push them into a higher tax bracket. It would be beneficial to decide now if they should split those payments between two years if it would lower the overall tax burden.
Do they expect to have income from investments? If so, they might be liable for a 3.8% net investment income tax on the lesser of their net investment income. Net investment income includes, but is not limited to interest, dividends, capital gains, rental and royalty income, and non-qualified annuities.

Consider opportunities to give back

This is a great time of year to discuss with clients causes that are important to them and if they want to provide a monetary contribution — whether financial, stocks, or a high-value item for donation. Open conversations about donations can uncover opportunities that may be eligible for a federal tax deduction. If your client is interested in donating directly to a charity of their choice in a donor-advised fund, it will only be deductible if they itemize and exceed the standard deduction.

If your client is interested in donating directly to a charity, they may consider a qualified charitable distribution. This is a tax-free transfer of money from an IRA to a charity. Normally, a traditional IRA distribution is taxable; however, a QCD is tax-free as long as it is transferred directly to a charity. This option is available for individuals over 70½ years of age or older. The maximum amount that can be transferred through a QCD is $100,000. A QCD can provide several tax benefits. QCD can count toward required minimum distributions of a client’s IRA, therefore, reducing their taxable income.

A donor-advised fund is a charitable investment account focused on supporting charitable organizations your clients care about. If your client contributes either cash or other assets to a DAF, they could take an immediate tax deduction. Keep in mind that some clients may want to start their own charitable fund, or support a 501(c)(3) organization’s DAF. In addition, as they decide on what organizations to support, those funds can grow tax-free and benefit the charitable organizations in the future.

Start conversations about the TCJA sunset

The 2017 Tax Cuts and Jobs Act instituted significant Tax Code changes that reduced taxes for many individual investors; however, these tax cuts are only temporary. The TCJA is set to expire at the end of 2025 unless Congress decides to take action.

Your clients may have seen tax cuts due to the TCJA and if they have, it will behoove you to have transparent conversations with them about how to navigate the TCJA expiring in 2025 and the potential tax increases they could see.

The most significant tax cuts in the TCJA included:

Federal individual income tax rates generally decreased;
Many itemized deductions were capped or disallowed;
The standard deduction doubled;
Changes to the Alternative Minimum Tax rules decreased the number of individual taxpayers subject to the AMT;
The gift and estate tax exemption doubled; and,
The qualified business income deduction was introduced.

Although how Congress will address the TCJA sunsetting in 2025 is unknown, it is critical for you to understand how the TCJA impacted your clients to help them determine how they will or will not be affected. As you have conversations with clients during year-end planning, here are areas to consider:

Income tax planning: Take a look at your clients’ federal income tax rates now compared to 2017 and see if they were higher. Then review the AMT and check to see if your clients may qualify for that under pre-TCJA rules. Understanding if your clients will have a higher income tax or be subject to the AMT under pre-TCJA rules is important for them to know ahead of time and discuss potential income deferral strategies — especially for retirees who are navigating distributions or Roth conversions.
Standard deduction: If your clients currently claim the standard deduction under TCJA, but they used to itemize, you may start flagging for them that they should consider itemizing for 2026 and the best ways to do that.
Gift and estate planning: Currently, the enhanced gift and estate tax exemption is $13.61 million, but this will be cut in half after 2025 if the TCJA expires. You should have open discussions with your high-net-worth clients if they are considering making large gifts and if they want to use this exemption. Keep in mind, many wealth transfer strategies like the creation of trusts or real estate transfers require time to fully implement. If you have these conversations with clients now, they’ll be able to stay in front of potential changes and hopefully avoid any delays.

Help your clients keep more of what they earn

Having transparent and open year-end financial planning conversations now with your clients will help them get a head start on the coming year, identify goals, and determine the right strategies for their unique situation. It will also give you more opportunities to collaborate with financial advisors, estate attorneys, and other professionals to navigate the more complicated issues.

Accounting

Global ESG Reporting Standards and Double Materiality Compliance

Published

5 days ago

August 9, 2026

Business Finance News

Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

Published

1 week ago

August 5, 2026

Business Finance News

Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

Accounting

Automated Tax Compliance and Global Regulatory Harmonization in 2026

Published

1 week ago

August 5, 2026

Business Finance News

Corporate tax accounting departments are navigating an era of unprecedented regulatory complexity as global tax harmonization frameworks take full effect alongside real-time digital tax reporting mandates. Tax directors and accounting teams are adopting cloud-based tax compliance automation tools to manage multi-jurisdictional tax liabilities and satisfy stringent reporting rules across international jurisdictions.

Implementation of Global Minimum Tax Provisions
The implementation of international tax reform agreements—notably the Pillar Two global minimum tax framework—has reshaped multinational corporate tax planning. Multinational enterprises with consolidated revenues exceeding established thresholds must ensure an effective tax rate of at least 15% across every jurisdiction in which they operate.

Accounting teams are implementing specialized tax calculation modules integrated directly into enterprise resource planning (ERP) platforms. These automated tools calculate effective tax rates per country, identify top-up tax liabilities, and generate standardized compliance documentation required by national tax authorities.

Real-Time Digital Invoicing and E-Reporting Mandates
Tax authorities across Europe, Latin America, and Asia-Pacific have enacted mandatory electronic invoicing (e-invoicing) and continuous transaction controls (CTC). Under these systems, corporate transaction data must be submitted electronically to government portals in real time at the point of sale or invoice issuance.

This shift toward continuous digital tax reporting eliminates traditional annual tax audits in favor of ongoing automated compliance monitoring. Accounting departments are upgrading invoicing software to ensure seamless XML data formatting, digital signature authentication, and real-time validation against tax authority databases.

Automation and Data Analytics in Corporate Tax Strategy
To keep pace with dynamic tax legislation, tax departments are transitioning from reactive compliance teams to proactive strategic advisors. Machine learning algorithms analyze corporate transactional data to identify tax credits, research and development (R&D) incentives, and cross-border transfer pricing adjustments.

By automating routine tax return filings and calculations, corporate tax directors can focus on long-term capital structuring, evaluating the tax implications of corporate mergers, and optimizing international supply chain networks.

Strategic Priorities for Tax Executives
1. ERP System Upgrades: Ensure enterprise software is capable of generating real-time, granular tax data required for global minimum tax compliance.
2. E-Invoicing Integration: Implement scalable e-invoicing platforms to satisfy regional continuous transaction control regulations.
3. Strategic Tax Analytics: Utilize predictive tax modeling tools to evaluate structural changes in corporate operations and cross-border trade.