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Accountancy Slice
USA
7th August 2025
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THE HOT STORY

President Trump opens U.S. 401(k)s to crypto and private equity investments

President Donald Trump is expected to sign an executive order (EO) later today allowing alternative assets such as private equity, cryptocurrencies and real estate into 401(k)s. A senior White House official said the EO will direct the U.S. Secretary of Labor to review fiduciary guidance on private market investments in 401(k) and other defined-contribution plans that are governed by the Employee Retirement Income Security Act of 1974 (ERISA). While there is no law prohibiting plan sponsors from offering private market investments to employees, they have traditionally steered clear of them because they have a fiduciary duty to provide a menu of prudent, reasonably priced investments to plan participants. The president’s executive order won’t change policy, but it will clarify his position to the rest of the government, Jaret Seiberg, a financial services policy analyst at TD Cowen Washington Research Group, said in a research note. “It will still require the agencies to craft new rules. That could take into 2026,” he added.

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TAX

Tax law sparks corporate spending surge

Companies are expressing optimism about President Donald Trump's new tax law, known as the One Big Beautiful Bill Act (OBBB), which allows immediate expensing of domestic capital costs. AICPA Vice Chair Jan Lewis said: "It gives a definite advantage to domestic R&D." The legislation is expected to ease concerns amid tariff uncertainties, with 19% of Russell 3000 companies mentioning it in earnings calls. Companies like Johnson & Johnson and AT&T are already planning significant investments and expansions, with AT&T anticipating up to $8bn in cash tax savings. However, some firms, including Ford Motor and Boeing, are still evaluating the law's impact. AICPA chief executive Mark Koziel cautioned that the tariff situation complicates the financial landscape for businesses.

IRS cuts hit hard in Covington, Kentucky

The IRS has eliminated 750 jobs in Covington, Kentucky, precipitating significant revenue losses for the city. Covington's mayor, Ron Washington, said: "While the IRS layoffs pose a fiscal challenge to the City's budget . . . the City is pursuing a robust plan for continued growth and stability." The job cuts, part of a broader initiative by the Trump administration, represent nearly 5% of the city's total employment and are projected to cost Covington $1.5m in lost payroll tax revenue. The city plans to use American Rescue Plan Act funds to mitigate the impact, but these funds are temporary. Washington has actively sought to preserve federal jobs, meeting with congressional leaders to address the economic consequences of the cuts.

INDUSTRY

IRS urged to clarify research costs

AICPA has urged the IRS to provide prompt guidance on Sec. 174A, which pertains to the Amortization of Research and Experimental Expenditures. This guidance is crucial for small businesses to understand how to handle domestic research costs on their 2024 tax returns. Reema Patel, AICPA's senior manager of Tax Policy & Advocacy, said: “Providing the guidance cited in the AICPA's comment letter allows immediate tax relief to eligible taxpayers and resolves uncertainty for those who may have already deducted 2024 domestic research costs.” The AICPA recommends that eligible taxpayers be allowed to deduct these costs on their originally filed 2024 federal income tax returns, ensuring clarity and reducing administrative burdens.

FIRMS

AWG Wine Advisors joins Platform Accounting

AWG Wine Advisors, previously known as Allen Wine Group, has merged with Platform Accounting Group, enhancing its business accounting services tailored for the wine industry. Based in Santa Rosa, AWG offers a comprehensive range of services, including bookkeeping, tax planning, and outsourced CFO services. Timothy Allen, managing partner at AWG, said: “Our success stems from a passion for the industry, and in supporting wineries in reaching their goals.” This merger allows AWG to leverage Platform's extensive resources while continuing to provide innovative solutions to its clients. Platform Accounting Group has experienced significant growth, doubling in size annually for the past decade, and now boasts nearly 1,000 employees across 16 states.

Earned expands with third acquisition

Earned, a tech-enabled financial services firm based in New York City, has announced its acquisition of Schwartz & Schwartz, a Boston-based tax and accounting firm specializing in services for healthcare providers. This marks Earned's third acquisition in the past year following a $200m investment from Summit Partners and Silversmith Capital Partners. John Clendening, founder and chief executive of Earned, said: “This marks a major step forward in Earned's national expansion strategy and underscores the power of our integrated model.” With over 8,000 clients and $2.3bn in assets under management, Earned aims to provide a comprehensive suite of financial services tailored for healthcare professionals. Andrew Schwartz, co-founder of Schwartz & Schwartz, emphasized the alignment of its mission with Earned's goal of enhancing financial services for healthcare providers. Earned is actively seeking more firms to expand its reach further.

PERSONAL FINANCE

What parents need to know about the 'kiddie tax'

The "kiddie tax," established nearly 40 years ago, aims to prevent parents from evading taxes by transferring investment assets to their children. If a child under 18 or a full-time college student under 24 earns more than $2,700 in 2025 from unearned income, their income is taxed at the parent's marginal rate. Robert Persichitte, a CPA and certified financial planner, explains: “The easiest way to understand the kiddie tax is to think about the loophole it closes.” The first $1,350 of unearned income is not taxed, while the next $1,350 is taxed at the child's rate. Any income above $2,700 is taxed at the parent's rate. The kiddie tax applies only to unearned income, such as dividends and capital gains, and is generally avoidable unless the child has significant assets or income.

FINANCIAL PLANNING

New tax law reshapes estate strategies

The recent federal tax law significantly alters estate, gift, and income tax planning, necessitating immediate attention from individuals and estate planners. Starting January 1st 2026, the basic exemption amount will rise to $15m per person, allowing married couples to shelter up to $30m. Richard J. Miller Jr., a partner at Hughes Hubbard & Reed, emphasizes the importance of "sophisticated planning" to leverage these exemptions effectively. Families should reassess their estate plans, particularly regarding spousal lifetime access trusts and credit shelter trusts, to ensure compliance with the new regulations. Additionally, high-net-worth individuals are encouraged to review their charitable giving strategies to maximize deductions before the end of 2025. The law also introduces changes to irrevocable non-grantor trusts, allowing for better tax deductions. Overall, the new tax landscape presents opportunities for wealth preservation through strategic planning.

TECHNOLOGY

Google to spend $1bn on AI training scheme

Google has announced a $1bn investment over three years to provide artificial intelligence training and resources to U.S. universities and nonprofits. Over 100 institutions are already participating. Senior Vice President James Manyika said: "We're hoping to learn together with these institutions about how best to use these tools." The initiative aims to address concerns surrounding AI's role in education.

CYBERSECURITY

Federal court filing system breached in cyber hack

The U.S. federal judiciary's electronic case filing system has been compromised in a sweeping cyber hack that is understood to have exposed sensitive court data in several states. The Administrative Office of the U.S. Courts, which manages the federal court filing system, first determined how serious the matter was around July 4th, said a source. The office, and also the Justice Department and individual district courts around the U.S., are still trying to determine the full extent of the incident. “It’s the first time I’ve ever seen a hack at this level,” observed one person with knowledge of the incident who has more than two decades' experience on the federal judiciary.

INTERNATIONAL

President Trump signs EO creating 25% tariff on goods from India

President Donald Trump has signed an executive order imposing a 25% tariff on India for its purchases of Russian oil, raising the total tariffs on the country to 50%. This decision, effective 21 days post-signing, allows both India and Russia a window to negotiate with the U.S. administration regarding the import taxes. The move marks a significant escalation in trade tensions between the U.S. and its ally, India.

U.S. tariffs could hit alcohol sales hard

The 15% tariff on E.U. goods could jeopardize nearly $2bn in alcohol sales and 25,000 jobs in the U.S., according to a letter from 57 industry groups to President Donald Trump. The Toasts Not Tariffs Coalition, which includes major producers like Diageo and Pernod Ricard, has called for a better trade deal. The coalition highlighted the tariff's impact on the holiday season, a crucial time for sales. The letter stated: "As we approach the critical holiday season, we implore you to secure this important deal for the U.S. as soon as possible." The E.U. has also considered retaliatory measures.
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