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14th November 2025
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THE HOT STORY

IRS raises 401(k) contribution cap

The IRS has announced increased contribution limits for retirement plans in 2026 due to inflation adjustments. The maximum contribution for 401(k), 403(b), governmental 457 plans, and the Thrift Savings Plan will rise to $24,500, up from $23,500 in 2025. Additionally, the limit for Individual Retirement Accounts (IRAs) will increase to $7,500 from $7,000. The catch-up contribution limit for individuals aged 50 and over will also see an increase, reaching $8,000 for most plans. Notably, those aged 60 to 63 can contribute up to $11,250. The IRS's Notice 2025-67 outlines these adjustments and other cost-of-living changes for tax year 2026, including updated income ranges for deductible contributions and eligibility for Roth IRAs and the Saver's Credit.

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TAX

Reforming the U.S. tax code to account for AI gains

In a piece for Bloomberg Law, CPA Peter Gariepy discusses the need to modernize the U.S. tax code in light of the growing influence of artificial intelligence on investment returns. Currently, wages are taxed at rates up to 37%, while capital gains are taxed at a maximum of 23.8%. This disparity creates an imbalance, as high-earning professionals pay more tax than passive investors. A study from Stanford University and Boston College found that AI could generate returns six times higher than most human fund managers. Mr. Gariepy argues that “no American's paycheck should be taxed at a higher rate than an algorithm's investment returns.” To address this, he suggests lowering tax rates on earned wages and eliminating the stepped-up basis loophole, which benefits inherited wealth. Ending this loophole could raise between $197bn and $536bn over ten years, promoting fairness in the tax system.

NYC Mayor-elect Mamdani's budget battle already underway

New York City Mayor-Elect Zohran Mamdani faces a significant budget challenge as he prepares to propose a budget that could close a deficit ranging from $5bn-$8bn. Andrew Rein, president of the Citizens Budget Commission (CBC), emphasized the need for Mamdani to focus on effective programs, saying: "We are spending $120bn a year and not getting the value of those dollars." The CBC has recommended a city-wide performance management system and labor negotiations to enhance productivity and protect vulnerable residents from federal cuts. While Mamdani has proposed a $9bn tax increase to fund various initiatives, the CBC warns that raising taxes on the wealthy could deter them from living in the city, as millionaires contribute 40% of the city's income tax revenue. The city has also faced unsustainable spending, with a rainy day fund of only $2bn, leaving it ill-prepared for future economic downturns.

Taxing times for Chicago businesses

Chicago Mayor Brandon Johnson's administration is contemplating a modification to his corporate head tax proposal, raising the minimum employee threshold from 100 to 200. This change aims to garner support from City Council members for a $21-per-employee-per-month tax, which Mr. Johnson believes could generate $100m in revenue for public safety programs. However, he faces challenges convincing 26 of the 50 aldermen to back the tax on smaller companies. Mayoral spokesperson Cassio Mendoza said: “conversations are ongoing with Aldermen on a number of potential changes,” but no decisions have been finalized. Mr. Johnson's budget plan, which totals $16.6bn, is under scrutiny as he seeks alternative revenue sources without raising property taxes. The proposed changes could impact funding for various community programs, including youth job initiatives and violence interruption efforts.

INDUSTRY

FASB tackles equity method complexity

The FASB is set to reevaluate the equity method of accounting for strategic partnerships and joint ventures. The decision follows feedback from financial statement preparers who identified the method as "overly complicated and costly." FASB has added this project to its technical agenda and will conduct further research and outreach to explore potential improvements. Companies including Eli Lilly & Co. and Block Inc. have voiced their concerns in recent comment letters, emphasizing the need for a more streamlined approach.

FIRMS

EY nominates vice chair for assurance as U.S. leader

The Wall Street Journal reports that EY has nominated Dante D'Egidio, currently vice chair for assurance for EY Americas, as U.S. managing partner, with partners expected to vote to approve his appointment in the coming weeks. He has held his current role since 2023, leading the Big Four firm's efforts to reduce its auditing deficiencies. EY expects to achieve its lowest U.S. auditing shortfall rate in 16 years, at or below 9% this year, as the PCAOB wraps up its inspections process for the Big Four accounting firms. If approved by the partners, D’Egidio in July would succeed Julie Boland, who led the U.S. operation since 2022 but is set to retire from the firm, as she would reach the mandatory age 60 retirement and the end of her four-year term.

Mercer Advisors acquires BLFC team

Mercer Advisors has announced the acquisition of Beach Freeman Lim & Cleland (BFLC), a Southern California-based tax firm specializing in tax, accounting, and business advisory services for high-net-worth clients. All BFLC team members will join Mercer Advisors, which emphasizes equity ownership for full-time employees. Jeremiah Barlow, Chief Solutions Officer at Mercer Advisors, said: “This partnership reflects our strategic focus on tax as a cornerstone of our family office set of services.” BFLC's 20 tax professionals serve various industries, including healthcare and real estate, from offices in El Segundo, Irvine, and Ontario.

ECONOMY

U.S. government to release abridged version of October jobs report

The U.S. government has announced that October’s jobs report will be incomplete, as it will exclude the unemployment rate due to the household survey not being conducted during the government shutdown. Kevin Hassett, director of the National Economic Council, confirmed that only the payrolls data from the business survey will be published, with the missing household survey affecting just this month’s report. The shutdown halted data collection as workers were furloughed, though September’s delayed report may be released soon as its data was gathered before the shutdown began. Government departments, including the Bureau of Labor Statistics, are now resuming operations, with an updated release schedule expected shortly.

Consumer anxiety impacts retail sales

Two-thirds of U.S. consumers feel anxious after making purchases, according to Narvar's 2025 State of Post-Purchase report. Frustrations over returns, theft, and delivery failures are causing 40% of consumers to abandon their carts. Anisa Kumar, chief executive of Narvar, said: "Retailers that treat post-purchase as a strategic extension of their brand will be best positioned to build loyalty." The report highlights that 90% of shoppers check return policies before buying, and 76% won't return after a poor experience.

FRAUD

Ex-Newsom chief of staff arrested in fraud case

Dana Williamson, California Gov. Gavin Newsom's former chief of staff, has been arrested on federal charges for allegedly misappropriating $225,000 from a dormant state campaign account. The 23-count indictment, revealed on Wednesday, claims Ms. Williamson and her associates, Greg Campbell and Sean McCluskie, billed the campaign for fictitious consulting services through shell companies starting in spring 2022. Notably, they wrote off $1m in luxury handbags and private jet travel as business expenses on their tax returns.

TECHNOLOGY

Fed Gov. says streamlined payment accounts to be operational in 2026

The Federal Reserve has announced plans to operationalize a new tiered system of streamlined "payment accounts" by the fourth quarter of 2026, aimed at enabling risk-based access to its payment services. Gov. Christopher Waller said the Fed is working at “startup speed” and will soon issue a request for information before a formal rule proposal.

CYBERSECURITY

Cybersecurity tips for tax season

As tax season approaches, Dr. Sangeeta Chhabra emphasizes the need for a proactive security strategy to combat rising artificial intelligence-driven cyber threats. The Microsoft Digital Defense Report reveals that 52% of cyber incidents are financially motivated, with AI enhancing the sophistication of attacks. "Always assume that someone, somewhere, is using AI to test your defenses," warns Dr. Chhabra. She outlines various threats, including deepfake audio and highly personalized phishing, which are becoming increasingly difficult to detect. To mitigate risks, she recommends continuous education, implementing multifactor authentication, and adopting AI-aware security tools. Additionally, organizations should prepare a breach response plan and foster a culture of zero trust to enhance their defenses during this critical period.

INTERNATIONAL

U.S. lifts tariffs on key imports from Ecuador, Argentina, Guatemala and El Salvador

The United States has announced the removal of tariffs on certain food imports from Argentina, Ecuador, Guatemala, and El Salvador, aiming to enhance market access for U.S. firms. A senior Trump administration official said that these agreements are expected to lower prices for items like coffee and bananas, with U.S. retailers likely to pass on the savings to consumers. U.S. Treasury Secretary Scott Bessent indicated that "substantial" announcements would follow to further reduce living costs. The framework agreements will maintain some tariffs while eliminating others on products not produced in the U.S. Argentine Foreign Minister Pablo Quirno expressed optimism, saying the deal would "create the conditions" for increased U.S. investment in Argentina. Leaders from the involved countries welcomed the agreements, highlighting their potential economic benefits.

How OBBBA impacts Canada-US individuals tax comparisons

Nathan Boidman, a retired Canadian attorney and CPA, analyzes the impact of the One Big Beautiful Bill Act (OBBBA) on individual tax matters in the U.S. and compares them with Canadian tax laws. The OBBBA modifies the state and local tax (SALT) deduction limit from $10,000 to $40,000 until 2029, benefiting high-income earners. However, it does not revert the maximum individual tax rate from 37% as set by the Tax Cuts and Jobs Act. In Canada, individuals face higher maximum tax rates, around 54% in provinces like Ontario and Quebec. The OBBBA also makes the Qualified Business Income deduction permanent, while Canada lacks a similar provision.
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