RBF News                       Q3 2018

Welcome to RBF News - our quarterly summary of the important tax, business, and financial news and opinion to help you see the bigger picture... and make more informed decisions.

Economic Snapshot
Aerial view of business port with shore crane loading container in container ship in import export and business logistics with crane and shipping cargo.International transportation and business concept.
Consumers and government spending powered the U.S. economy to a GDP growth rate of 4.1% in the second quarter, the fastest pace in almost four years.

And it appears the recent tax overhaul is buoying optimism among accountants and CFOs. But fears of a trade war between the U.S. and China are dampening enthusiasm about the economy, according to the most recent quarterly Global Economic Conditions Survey.

Still, the American Institute of CPAs reported that its quarterly Personal Financial Satisfaction Index  reached an all-time high for the second quarter of the year, thanks to the record number of job openings and the strong stock market.

But Federal Reserve chairman Jerome Powell has said that strong growth is one reason the central bank should keep raising interest rates. With inflation moderate, the Fed is expected to stay on the pace of a quarter-percentage point rate hike every three months.
Taxes and Tax Planning
Industrial robot with conveyor in manufacture factory_Smart factory industry 4.0 concept.
Tax bonanza for old machines could hinder Trump's growth goal  - Sherrill Manufacturing, a maker of flatware, is spending at least half of its $250,000 capital budget this year on used equipment, including 20-year-old machinery to make knives that can be written off right away under the new tax law.
 
Massachusetts enacts tax for paid family medical leave law - In late June, Governor Charlie Baker signed legislation that provides for paid family and medical leave for employees. The law creates a new payroll income tax on employers, beginning July 1, 2019. Here is a breakdown of which employers will qualify.
 
Tax loophole from '60s could let wealthy tap 21% corporate rate - An obscure tax provision from the 1960s that was left untouched by President Trump's overhaul could let wealthy individual investors seize for themselves the largest corporate tax cut in U.S. history.
Managing Your Business
Survey: companies that outsource accounting services report higher profits - A poll conducted by Bill.com found that businesses using a CPA firm's client advisory services report higher profits and greater financial insights. Thirty percent of respondents said they felt more prepared to make business decisions, while half said they were less worried about mistakes.
 
How to earn a reputation as a fair manager - We all learn sooner or later that life isn't fair. In Harvard Business Review, Liane Davey writes that the best approach as a manager is to understand the different forms of fairness, and be thoughtful about when and how you apply them.
 
The four day work week is good for business - After spending two months testing a 20% shorter work week, a trust and estate planning firm in New Zealand found its employees happier, more focused, and producing the same amount of work. Now, reports Fast Company magazine, they're making the change permanent.  
Around the Office

A just-released survey of RBF business clients revealed confident expectations about the prospects for their companies in 2018. A solid four out of five (84%) expressed optimism about the future, and nearly nine out of ten (86%) said RBF has had a direct and positive impact on their business. Read a more detailed summary of the survey here.

 

In June, CFO Consultant Kathy Hempel attended a "Nonprofit Awareness Day" celebration at the Massachusetts State House. This statewide event focused on the various impacts of nonprofits across the Commonwealth.   Kathy was a guest of colleague Patricia Bean, Sr. VP at Eastern Benefits Group.

 
Also in June, 20 enthusiastic RBF staff members joined other accounting professionals across the state for the annual "Day of Service" sponsored by the Massachusetts Society of CPAs. Participating RBF staff focused on two different activities; assembling and decorating 23 craft "discovery kits" to give to pre-school children served by Horizons for Homeless Children; and creating 20 music booklets to give to members of the Boston Children's Chorus.
 

In the publishing area, partner Vinny Botta's article, "What tax reform means for contractors," was published in the July member newsletter of Associated Subcontractors of Mass. ASM is the state's leading association for specialty contractors who work on building projects in both the public and private sectors. A copy of Vinny's article can be found here.

 

Last month, several RBF staff took part in a special online training program called ProfitCents University. The training helped participants hone their skills as advisors to our business clients by teaching them to identify areas of strategic opportunity, and help owners improve their company's performance.

 

Out on the links, RBF was a sponsor of the UMass Gridiron Club Golf Classic held at Pinehills Country Club in Plymouth, MA. All proceeds from the outing went directly to supporting the outstanding student athletes of Umass Minuteman football.

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RBF is the  New England-area affiliate of Russell Bedford International, a leading global network of independent accounting and business consulting firms.
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