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By 2021, there were 20,000 warehouses in the United States and growing, according to the United States Bureau of Labor Statistics (BLS). With more warehouses expected to pop up in 2022 and beyond, one important consideration for businesses of all sizes is to keep track of their inventories. With different tracking and valuation methods, it’s important to understand how they work and what they can tell business owners.

Before inventory can be valued, it’s imperative to understand how it can be expressed mathematically:

Ending Inventory = Starting Inventory + Net Acquisitions – Cost of Goods Sold (COGS)

Now that inventory is better defined, understanding different approaches to inventory valuation are essential to keeping track. The first type of inventory valuation is referred to as FIFO or First In, First Out. This means that businesses sell their earliest produced inventory first and new inventory last.

Assume a company produces 500 widgets on day 1, costing $2 per widget. The same company then produces 500 widgets on day 2, costing $2.50 per widget. This method says that if 500 widgets are sold over the next week, the cost of goods sold (COGS), derived from the Income Statement, is $2 per widget because that’s how much the first 500 widgets cost to produce for inventory. The remaining widgets, 500 widgets at a cost of $2.50 per unit, would be accounted for under the ending inventory on the balance sheet.

One consideration, especially in an inflationary environment, for remaining inventory on the balance sheet is that a business might see a higher tax obligation. This is likely to occur because of higher net income due to a lower cost basis from the older inventory when assessing the COGS. Newer, more expensive inventory will naturally lead to a lower tax basis, especially if inflation falls and the retail cost is mitigated by decreased demand.

The next option is referred to as LIFO – or Last In, First Out. This means that businesses sell what they’ve produced first, then move on to the older inventory. If any inventory is left at the end of the accounting time frame, it’s accounted for accordingly. Assuming the same 500 widgets were sold in the particular accounting period, the time frame’s COGS would be $2.50 per widget, with the 500 widgets left over in inventory valued at the $2 per widget cost.

One important caveat to this type of valuation concerns inventory that’s perishable or becomes obsolete quickly (cell phones, televisions, etc.). It is not an effective method because the product will either spoil or become worth next to nothing due to highly competitive industries. For this approach, using the most recently produced goods first would lend their COGS basis to be higher. In one respect, the higher COGS basis can lower profits, but can also offset taxes due to the same effect. The third type of inventory valuation is referred to as Average Cost. This method is a way to blend LIFO and FIFO, which takes the average of inventory across all production and storage timelines. This approach averages costs in proportion to the number of widgets produced in each run, then calculates the mean cost to determine the ending inventory and COGS figures.

[(500 x $2) + (500 x $2.50)]/1,000 = ($1,000 + $1,250)/1,000 = $2,250/1,000 = $2.25

Therefore, the average cost for inventory using this method would be $2.25 per widget.

With different types of inventory valuation explained, there are considerations that businesses should be mindful of for each approach. This can make a difference to those running the company and potential investors and lenders contemplating investing in or loaning the company money.

According to the IRS, not only is your ignorance no excuse but so is that of your tax preparer. In other words, the fact that your tax preparer made a mistake is no excuse and will not absolve you from compliance penalties.

Unfortunately, the penalty for making what could be deemed an innocent mistake can cost a taxpayer a significant sum. What is worse yet is that defending yourself against the IRS is a costly endeavor in terms of both time and money. Part of the problem is that taxpayers often do not have the option of appealing directly to the tax court and, instead, must first pay the IRS and then challenge it in either District Court or the Court of Claims. Stated plainly, the average taxpayer simply cannot afford to fight the IRS in tax court.

In the remainder of this article, we will look at two main areas that tend to be problematic for taxpayers: first, assorted penalties for misfilings and mistakes; second, obscure international forms.

Miscellaneous Mishaps and Mistakes

Taxpayers can get caught up in “gotcha” type situations where they inadvertently make a mistake in the type, accuracy, or timing of the filings. Here is a checklist of some of the most common issues in which taxpayers typically make unintentional errors that will not be forgiven by the IRS.

• Filing late and paying short: Filing a return late and underpaying the tax owed each carries separate penalties. Together, these penalties can add up to 47.5 percent of the original tax owed in a worst-case scenario.
• Careless Filing Details: If you make a mistake in filing your return and it results in tax liability in your favor, you can owe a penalty of 20 percent of the under-reported taxes. In the case of faulty appraisals for items such as donated property, the penalty can double up to 40 percent.
• Writing Bad Checks: Technically it does not matter if it is a physical check or another payment method, but if a taxpayer’s payment to the IRS is declined, the IRS will charge an additional 2 percent penalty.
• Missing Checklists: Failure to file the two-page “due diligence” checklist before claiming certain credits, such as the earned income or college credits, can result in a fine of $545 per credit.

Obscure International Forms

Many compliance-related rules related to international investments and banking activities were originally created to put a stop to drug dealers, terrorists, and flagrant tax cheats. Unfortunately, the regulations are still in force but apply to increasingly more taxpayers as the threshold amounts have not increased yet more U.S. citizens are working, living, or retiring abroad. Moreover, the penalties can be severe. In this section, we will look at some of the most obscure and serious foreign tax compliance issues.

• Passive Foreign Investments: If you own mutual fund shares incorporated abroad you must file Form 8621.
• Personal Holding Companies: If you create a corporation to hold a foreign property, you will need to file Form 5471, for a Controlled Foreign Corporation.
• FBAR: If you have $10,000 or more in any combination of international bank and brokerage accounts, at any single point in the year, you need to file the FBAR form electronically. Note, the trigger here is that the bank or brokerage is outside the United States. If you hold securities of foreign companies or foreign currencies with a U.S. institution, reporting is not required.
• Fatca Disclosures: Facta disclosures were created to combat money laundering, covering all manner of foreign financial assets, including insurance and retirement assets. It can overlap with the FBAR requirements, but the additional reporting here is triggered by higher thresholds starting at $50,000 in assets for single U.S. residents and up to $400,000 for couples residing abroad and filing joint returns.

Conclusion

Remember that ignorance of the tax law is no excuse, especially in the eyes of the IRS. It does not matter if a mistake you make is truly innocent; there is still a good chance that you will end up paying unpleasant fines and penalties and, in the worst case, a big mess. It is best to be timely and diligent in your filings.

Making a plan for your death, while perhaps an uncomfortable subject, is a valuable endeavor. Not only is it a great way to express care for your loved ones, but it can go a long way in easing your own anxieties regarding the end of your life.

While it is common knowledge that a will is the key document regarding the end of someone’s life, it is not the only key item. There are a variety of important details to leave behind for your loved ones that go beyond the information contained in a will. We’ve compiled a helpful list to get you started:

1. Your Living Will – Also known as an advance healthcare directive, this document is your plan for how you want decisions regarding your long-term care to be made in the event of your incapacitation. Living wills are important because they offer guidance regarding key medical decisions, offer clarity and closure for your loved ones, help to prevent conflict among your family members, and lighten the emotional burden that your loved ones bear in the face of difficult circumstances.

2. Your Plan for Care of Dependents – If you have any dependents for whom you are responsible, then you definitely need to have a plan in place for them in the event of your death. Your dependents include any minor children, any adults who are in your legal care, and any pets—those who your death or incapacitation would leave hanging. When making your dependent care plan(s), it is best to work with an attorney in order to ensure that all of your bases are thoroughly covered.

3. Key Information – In the event of your death or incapacitation, you can make things much easier on your loved ones by leaving them an organized and thorough record of all of the key information they might need. A brief list of some of the key information that you should compile includes:

• Personal details
• Family details
• Important contacts
• Financial details
• Locations of important papers and documents
• Household information
• Tax, finance, and business information
• Logins and passwords for online accounts
• Social media account(s) information

Gathering all of these details is no small task, but doing so (and making sure to update them routinely) is an incredible gift for your loved ones.

4. Funeral, Interment, and Obituary Details – This is another area where making your wishes known in writing can be of immense value to your loved ones. If you have specific wishes regarding your funeral, interment, and/or obituary, you should be sure to make a written record to pass along upon your death.

5. Durable Powers of Attorney – Powers of attorney (POAs) are documents that authorize someone else to handle certain matters on your behalf. You might consider establish POAs in the areas of your finances, your medical care, and more.

As you can see, end-of-life planning is a complex and involved subject. Thorough preparation requires significant forethought and effort. It is never too soon to initiate your end-of-life planning process.

Though this article offers some helpful tips and starting points, the best way to create a thorough and effective end-of-life plan is to work with a professional who can guide you each and every step of the way. If you are ready to take this important planning step, reach out to the RBG professionals today. You can do so via our website’s Contact page or by emailing rbfco@rbfco.com. Be sure to request a copy of our free “Everything They Need to Know” digital planning guide.

The reality series “Chrisley Knows Best” first premiered on the USA Network in March 2014. It followed the lives of Georgia real estate professionals Todd Chrisley and his wife, Julie. Filmed in and around Atlanta, the show was an instant hit – after an initial first season of eight episodes, it would go on to run for another eight seasons between its original inception and 2022. Over the course of 197 episodes, it became a ratings hit and positioned the Chrisleys as legitimate professionals in the industry.

That is until they were eventually tried and convicted of federal charges for both bank fraud and tax evasion.

It’s true. In November 2022, the Chrisleys finished out a trial that would see them sentenced to 12 years for Todd and seven years for Julie. It was said that over the course of a decade, they had defrauded banks out of tens of millions of dollars. While doing so, they simultaneously evaded paying federal income taxes on the money they were making – including income directly related to their smash hit reality show.

But what happened and why did it take so long to catch them? The answers to questions like those require you to keep a few key things in mind.

The Chrisleys and the Federal Government: The Story So Far

According to United States Attorneys, the original charges that the Chrisleys were brought up on are as follows:

• For 10 years, both Todd and Julie Chrisley knowingly and intentionally conspired to defraud community banks in and around the Atlanta, Georgia area.
• They did so successfully, obtaining more than $36 million in personal loans in the process.
• With the assistance of a former business partner, they submitted everything from false audit reports to invalid personal financial statements to the aforementioned community banks to obtain these loans.
• The money was not spent on their business efforts, as it was intended. Instead, they used it to buy fancy cars, high-end clothes, personal real estate, and more. They also used a significant portion of the funds to travel around the world.
• Whenever the balance on one of their old loans would come due, they would simply use the same means to take out a new one to pay it off – thus creating a vicious circle that, it turns out, they would never be able to escape from.

To top it all off, after the money was spent, Todd Chrisley then filed for bankruptcy protection. It is estimated that he ended the decade with more than $20 million from those loans, every penny of which was obtained through fraud.

Keep in mind that this is all while the Chrisleys were also earning millions of dollars from their television show on an annual basis. Lucky for them, they found an accountant willing to work with them to help defraud the IRS to ensure they didn’t have to pay any taxes on that money. All money was kept in a bank account that was created only in Julie Chrisley’s name, which was then later transferred to a relative.

Unluckily for them, their accountant must not have been very good as he filed nothing for the Chrisleys in the way of tax returns for 2013 through 2016. Make no mistake: if you’re a couple on a hit reality television show who is definitely making millions of dollars per year, and you fail to even attempt to pay taxes, the IRS is going to realize this sooner rather than later. If you’re simultaneously defrauding community banks out of millions upon millions of more dollars, you really should be more careful.

Even after they were indicted, the Chrisleys were still up to their old ways. Julie in particular continued to submit fraudulent documents to the bank to make it appear like they hadn’t been lying about the circumstances under which they were transferring that business bank account to a relative. The grand jury, as it turns out, was less than persuaded.

All told, this is definitely the type of fall from grace that should act as a cautionary tale for just about everyone. It doesn’t matter how successful you are in your business, while simultaneously also being a public figure and reality television celebrity – you still have to play by the rules and you especially have to pay your taxes. When the situation gets so bad that even your accountant is sentenced in federal court to three years in prison followed by an additional three years of supervised release, you know that you were probably in over your head.

When it comes to transactions between family members, the tax laws are frequently overlooked, if not outright trampled upon. The following are some commonly encountered situations and the tax ramifications associated with each.

Renting to a Relative – When a taxpayer rents a home to a relative for long-term use as a principal residence, the rental’s tax treatment depends upon whether the property is rented at fair rental value (the rental value of comparable properties in the area) or at less than the fair rental value.

Rented at Fair Rental Value – If the home is rented to the relative at a fair rental value, it is treated as an ordinary rental reported on Schedule E, and losses are allowed, subject to the normal passive loss limitations.

Rented at Less Than Fair Rental Value – When a home is rented at less than the fair rental value, which often happens when the tenant is a relative of the homeowner, it is treated as being used personally by the owner; the expenses associated with the home are not deductible, and no depreciation is allowed. The result is that all of the rental income is fully taxable and reported as “other income” on the 1040. If the taxpayer were able to itemize their deductions, the property taxes on the home would be deductible, subject to the current $10,000 cap on state and local taxes. The taxpayer might also be able to deduct the interest on the rental home by treating the home as their second home, up to the debt limits on a first and second home.

Possible Gift Tax Issue – There also could be a gift tax issue, depending if the difference between the fair rental value and the rent actually charged to the tenant-relative exceeds the annual gift tax exemption, which is $17,000 for 2023. If the home has more than one occupant, the amount of the difference would be prorated to each occupant, so unless there was a large difference ($17,000 per occupant, in 2023) between the fair rental value and actual rent, or other gifting was also involved, a gift tax return probably wouldn’t be needed in most cases.

Below-Market Loans – It is not uncommon toencounter situations where there are loans between family members, with no interest being charged or the interest rate being below market rates.

A below-market loan is generally a gift ordemandloan where the interest rate is less than the applicable federal rate (AFR).The tax code defines the term “gift loan” as any below-market loan where the forgoing of interest is in the nature of a gift, while a “demand loan” is any loan that is payable in full at any time, at the lender’s demand.The AFR is established by the Treasury Department and posted monthly. As an example, the AFR rates for November 2022 were:

Generally, for income tax purposes:

Borrower – Is treated as paying interest at the AFR rate in effect when the loan was made. The interest is deductible for tax purposes if it otherwise qualifies. However, if the loan amount is $100,000 or less, the amount of the forgone interest deduction cannot exceed the borrower’s net investment income for the year.

Lender – Is treated as gifting to the borrower the amount of the interest between the interest actually paid, if any, and the AFR rate. Both the interest actually paid and the forgone interest are treated as investment interest income.

Exception – The below-market loan rules do not apply to gift loans directly between individuals if the loan amount is $10,000 or less. This exception does not apply to any gift loan directly attributable to the purchase or carrying of income-producing property.

Parent Transferring a Home’s Title to a Child – When an individual passes away, the fair market value (FMV) of all their assets is tallied up. If the value exceeds the lifetime estate tax exemption ($12,920,000 in 2023), then an estate tax return must be filed, which is rarely the case, given the generous amount of the exclusion. Because the FMV is used in determining the estate’s value, that same FMV, rather than the decedent’s basis, is the basis assigned to the decedent’s property that is inherited by the beneficiaries. The basis is the value from which gain or loss is measured, and if the date-of-death value is higher than the decedent’s basis was, this is often referred to as a step-up in basis.

If an individual gifts an asset to another person, the recipient generally receives it at the donor’s basis (no step-up in basis).

So, it is generally better for tax purposes to inherit an asset than to receive it as a gift.

Example: A parent owns a home worth (FMV) $350,000 that was originally purchased for $75,000. If the parent gifts the home to the child and the child sells the home for $350,000, the child will have a taxable gain of $275,000 ($350,000 − $75,000). However, if the child inherits the home, the child’s basis is the FMV at the date of the parent’s death. So in this case, if the date-of-death FMV is $350,000 and if the home is sold for $350,000, there will be no taxable gain.

This brings us to the issue at hand. A frequently encountered problem is when an elderly parent signs the title of his or her home over to a child or other beneficiary and continues to reside in the home.Tax law specifies thatan individual who transfers a title and retains the right to live in a home for their lifetime has established a de facto life estate. As such, when the individual dies, the home’s value is included in the decedent’s estate, and no gift tax return is applicable. As a result, the beneficiary’s basis would be the FMV at the date of the decedent’s death.

On the other hand, if the elderly parent does not continue to reside in the home after transferring the title, no life estate has been established, and as discussed earlier, the transfer becomes a gift, and the child’s (gift recipient’s) basis would be the parent’s basis in the home at the date of the gift. In addition, if the child were to sell the home, the home gain exclusion would not apply unless the child moves into the home and meets the two-out-of-five-years use and ownership tests.

Another frequently encountered situation is when the parent simply adds the child’s name to the title, while retaining a partial interest. If the home is subsequently sold, the parent, provided they met the two-out-of-five-years use and ownership rules, would be able to exclude $250,000 ($500,000 if the parent is married and filing a joint return) of his, her or their portion of the gain. A gift tax return would be required for the year the child’s name was included on the title, and the child’s basis would be the portion of the parent’s adjusted basis transferred to the child. As mentioned previously, the child would not be able to use the home gain exclusion unless the child occupied and owned the home for two of the five years preceding the sale.

Incorrect Withholding – Often spouses who are both working will not coordinate with each other when they complete their Form W-4s they provide to their employers for the purpose of determining the amount of income tax to be withheld from their wages. Sometimes this lack of communication results in a substantial under-withholding and an unpleasant surprise at tax time.

Child Files Own Tax Return Incorrectly – Frequently a child who is eligible to be claimed as a dependent by their parent(s) files their own return without checking the “someone can claim you” box on page 1 of 1040 – and if the parent does claim the child there’ll be correspondence from the IRS. The child may have claimed more standard deduction than allowed and possibly could deprive the parents of deductions and credits that they are otherwise entitled to. The remedy in this situation requires the child’s return to be amended.

These are not the only examples of the tax complications that can occur in family transactions. It is recommended that you contact this office before completing any family financial transaction. It is better to structure a transaction within the parameters of tax law in the first place than suffer unexpected consequences afterwards.

There is an important issue related to filing the 2022 S-corporation (Form 1120-S) and partnership (Form 1065) tax returns that requires the cooperation of the shareholders and partners.

Background: The IRS, for the 2021 tax year, without sufficient warning, introduced two new schedules for S-corporations and partnerships, the Schedules K-2 and K-3. These two schedules are supplemental schedules to the Schedule K-1 that provides shareholders and partners with information that is needed to prepare their individual tax returns (Form 1040). Problem is these two new schedules were designed to report all forms of foreign transactions not just the ones that applied to the particular entity and were dealt with on supplemental schedules in the past. In fact, these two new schedules are both about 20 pages in length, which in turn substantially increases the return preparation time and preparation costs. As you might imagine this change created quite an uproar in the tax preparation community last filing season, and as a result the IRS provided some filing relief for certain 2021 returns.

Fast Forward to the Present – The IRS draft instructions for filing the 2022 S-corporation and partnership returns include two exceptions for filing the K-2 and K-3 Schedules for domestic S-corporations and partnerships. Unfortunately, and has become the norm for the IRS, the qualifications to use these exceptions are complicated.

Domestic Entity Exception – To use the domestic entity exception to avoid filing the Schedules K-2 and K-3, the entity can only have minimal foreign activity which is limited to passive income upon which no more than $300 of foreign tax was paid or accrued and reported on a U.S. information return. In addition all direct partners and shareholders must be U.S. citizens, resident aliens or certain domestic estates and trusts.

This Is Where You May Play a Role – Among other requirements, to qualify for the domestic filing exception each partner/shareholder must receive a notification from the entity along with the K-1 notifying the partner/shareholder that they will not receive a Schedule K-3 unless it is specifically requested. Generally unless involved in foreign transactions the K-3 is not required. If no partners/shareholders request a K-3 the partnership/S corporation is not required to complete and filed.

Form 1116 Exception – The IRS also provides an additional exception to filing Schedules K-2 and K-3 for domestic partnerships and S-corporations if all partners/shareholders qualify for the Form 1116 foreign tax credit filing exemption. The exemption from filing Form 1116 to claim foreign tax credit applies to individuals who have less than $300 ($600 for married couples filing jointly) in creditable foreign taxes paid on qualified passive foreign income. In other words, the partner or shareholder can claim a foreign tax credit without filing Form 1116. This exemption applies only if the foreign income is reported on a U.S. information return, such as a 1099-DIV, 1099-INT, 1099-B or a K-1. The downside to claiming the credit without using the Form 1116 is a taxpayer cannot make the election to claim any foreign tax credit carryovers.

For the Form 1116 exception to apply to the partnership or S-corporation, the entity must receive notification from all partners or shareholders no later than one month before the entity’s unextended filing deadline, which is February 15, 2023, for calendar-year partnerships and S-corporations. So don’t be surprised if the notification required for domestic entity exception also includes a request for the Form 1116 exception information.  

Where the partnership or S-corporation is only advised by some of the shareholders or partners that they qualify for the Form 1116 exemption, then the entity need only complete the Schedules K-2 and K-3 for the other partners or shareholders to the extent that the entity does not qualify for the domestic filing exception.

Please contact our office if you have questions.

For the most part, New Year’s resolutions are hard to keep because many times you either list too many things or ones that aren’t manageable for the long haul – especially those that involve money. Here are a few simple tricks to help you make changes that are bite-sized, easy to implement, and more likely to stick.

Do a five-minute daily money check-in. Life is so busy that sometimes it’s easy to just spend money, then move on to the next task at hand. You might think, “I’ll check my bank balance later,” and then you never do. But if you’re serious about getting a handle on your finances, you might want to try this one thing: give yourself a “money minute.” Select a time of day, maybe after dinner, to log into your bank account. Take stock of what you spent money on. Did you really need that bottled water? That designer coffee? This way, you can nip those small (perhaps unnecessary) expenditures in the bud and make smarter choices in the coming days.

Get a money-saving app. One of the best ones to help you achieve financial goals is Ibotta. Let’s say you want to buy a new pair of running shoes; a good brand that’ll last. With this app, you’ll save on everyday purchases and when you’ve earned enough cash back, you can cash it in for a gift card from your selected store and get what you want.

Consider micro savings goals. This technique is actually about rewarding yourself financially for changing your behavior. For instance, every time you go to yoga or Pilates, stash away $5. Or if you wake up early or finish a difficult task, stash away $10. When you’ve saved enough money to buy whatever it is you’ve decided on beforehand, you’ve not only avoided the trap of putting your goodie on credit (and paying interest) but also most likely started a new, healthy habit.

Set up an automatic savings plan. After you’ve paid taxes, insurance premiums, and perhaps even your retirement account, you might consider tucking away money for yourself that you’ll never miss. Every. Single. Paycheck. That’s right. When you automatically have a set amount deducted every time you get paid, over time you’ll accumulate a bucket of money to use in whatever way you deem important – it could be saving for a vacation or a new car. It could also be a fund for emergencies. The point is, it’s an easy, failsafe way to save and achieve your goals.

Do one frugal thing a day. This is all about a little bit of forethought and then just taking action. And when you adopt this mindset, you’ll be working daily toward your financial goals like paying off debt, saving money to quit a job you hate, or even have enough extra cash to invest in real estate or whatever strikes your fancy. Here are a few things to consider: drink more water than soda. Eat at home. Use public transportation instead of driving when you can. But this just scratches the surface. For more smart ways to start living frugally, check out this super helpful article. You’ll be surprised at all the ways you can cut back and save.

All of these tricks are easy and, in some cases, no-brainers. When you take a few minutes, set your mind on what you want, anything’s possible. Here’s to fulfilling your dreams in the New Year! 

Sources: https://lifeandabudget.com/11-financial-resolutions-that-will-stick/

Technology advancement has brought about great digital transformation. Unfortunately, this has come with a global tech talent shortage. IT executives highlight the shortage as a huge barrier to the adoption of emerging technologies, as reported by this Gartner study. 

It is estimated that the demand for tech talent will keep increasing, and this could result in an estimated 85 million global talent shortage by the year 2030. Therefore, companies need to rethink their approach to hiring and retention. 

Reasons Behind the Tech Talent Shortage

It is worth trying to first understand what is causing the tech talent shortage. A few of the reasons that have led to the shortage include:

• Advances in technology – Technology is advancing at a high speed, requiring workers with skills to match the new technology. Unfortunately, the tech education system can’t keep up with the speed, hence a shortage of people with the required skills. 
• The great resignation – This became a buzzword with work from home that came with the Covid pandemic; unfortunately, even after the pandemic, people are still leaving their jobs. A survey by TalentLMS and Workable found 72 percent of employees working in tech are considering quitting their jobs or exploring other opportunities. 
• High demand for tech talent – There has been an increase in the demand for tech workers in recent years as more businesses and industries turn to technology for daily operations. New technology creates new roles such as data professionals, data security specialists, and software engineers among others that are highly competitive.
• Challenges in training and development – some companies might not have the resources and time to invest in employee development. 

Business Challenges of IT Talent Shortage

Businesses are feeling the effect of the tech talent shortage, especially when it comes to digital transformation. Emerging technologies such as robotic process automation (RPA), artificial intelligence, blockchain and augmented reality that promise to keep a business ahead of its competition require skilled workers. 

Hiring new talent or reskilling employees also comes at a cost, and companies struggle to fill positions. On the other hand, failing to have skilled employees results in unrealized annual revenues. 

As a result, businesses of all sizes find themselves failing to develop projects on time and hence fail to meet deadlines. In other cases, the existing employees end up overburdened with too much work, and this may lead to them quitting. Eventually, a business experiences slow innovation and slow growth. 

How to Handle the Tech Talent Shortage

A few strategies to help address this issue include:

• Investing in employee development and training
  Providing ongoing training and development opportunities for current employees can help them acquire new skills and knowledge. This will not only make them more valuable to your organization, but also less likely to leave.

• Attract top talent through a strong employer brand
  Building a strong employer brand can help in attracting top talent to your organization. This can involve highlighting your company’s culture, values, and mission, as well as offering competitive compensation and benefits packages. A good reputation will also help attract new talent.

• Partnering with educational institutions
  A company may also partner with local colleges and universities to gain access to a pool of talented students who are looking for internships or entry-level positions. Additionally, setting up mentorship or internship programs helps build a pipeline of talent for your organization.

• Increase recruitment efforts
  Sometimes it might be difficult to find the right talent, which makes it necessary to increase recruitment efforts. This could involve working with recruitment agencies, posting job openings on job boards and social media platforms, and attending job fairs and industry events.

• Consider hiring remote workers
  Even with all efforts in place, it may still be difficult to find the right talent in a business location. Today, technology has enabled people to work remotely. This offers access to a larger pool of candidates and also can help attract top talent from other parts of the country or even the world. It is also possible to work with freelancers or contractors to fill specific skills gaps on a project-by-project basis.

• Enhance the recruitment process
  An inefficient recruitment process will cost the company good talent. Therefore, any poor communication or delayed communication will affect talent acquisition. A company might need to streamline its recruitment process.

Final Thoughts

The global tech talent shortage is already negatively affecting businesses. Since the shortage is expected to rise, business leaders need to decide on the best way forward so they are not left behind in digital transformation. A good decision should fit business goals whether choosing to hire internal talent, remote workers, or outsource technology needs. 

Even if you have no heirs, you should have an estate plan. Otherwise, the state will determine the fate of your worldly possessions. If you pass away “intestate” (without a will), the state can even keep all of your assets for itself – if no heirs are found.

The most basic tenet of no-heir estate planning is to write a will. Every state has different rules about what constitutes a legally enforceable will, so be sure to check out your state’s guidelines. If you move, you’ll need to update your will according to the state you live in when you pass away.

In your will, direct who receives which of your assets. No edict says you must leave possessions to a relative. You can choose a friend, a group of people, or even one or more charitable organizations. You also should choose an executor of your will: someone you trust to carry out your wishes. This person can be an attorney or bank custodian of your assets. You should speak with whomever you choose to make sure they are willing to take on the role of executor. It is generally no small task and might entail distributing and even selling your possessions in order to make cash distributions to the beneficiaries.

If you have any pets, be sure to figure out during the planning process who is willing to take care of your animals after you pass, or direct their care to a specific shelter.

Also, consider the beneficiaries you will designate for bank and investment accounts, as well as any insurance policies you own. Note that beneficiary designations you assign on these accounts will supersede your will instructions, even if they precede when you wrote your will. For example, your employer might pay for a life insurance policy in your name that pays out proceeds equaling two to three times your salary. You might not even remember that you completed this paperwork years ago, naming your girl/boyfriend at the time as your beneficiary. If you don’t keep those designations up to date, you may end up leaving a substantial sum to a woman/man who broke your heart, instead of the person who embraces it now.

It is also a good idea to name a “Transfer on Death” (TOD) designation on other types of accounts, such as your bank checking and savings accounts. This designation also supersedes will instructions and allows your money to be distributed once the beneficiary presents your death certificate and proper ID. It’s advisable to name the executor of your will as TOD, as he may need to access your funds quickly to pay for funeral and burial expenses. Other assets can take longer to distribute, so a TOD designation is a quicker way for your beneficiary to access cash.

Be aware that even if you have prepared a will, your estate will still be subject to probate, in which a judge makes the final determination of your assets. If you wish to avoid this step, you can fold all or a portion of your assets under one or more trusts, which will distribute them according to the trust directions and avoid probate altogether. A trust is particularly beneficial if you have a large estate or wish to leave a substantial donation to one or more charities.

Another estate planning consideration is what to do if, instead of dying, you become incapacitated and cannot make decisions for yourself. As part of the estate planning process, you should name a power of attorney to make financial decisions for you. This can be anyone – a friend or close neighbor, or the person you name as executor of your will. 

You should also establish a living will, advanced care directive, and/or healthcare proxy. A living will is a directive that states your wishes regarding medical care should you become incapacitated (e.g., permanently unconscious). An advanced care directive can be more specific, such as establishing a “do not resuscitate” (DNR) order if your breathing or heartbeat stops, and if you would like to donate tissues or organs after you pass.

A healthcare proxy, which may be referred to as a medical or durable power of attorney, is the assignment of a person who will make all of your healthcare decisions when you no longer can. Note that with medical instructions as well, states have varying guidelines. It’s important to be familiar with your state’s requirements and update your medical care directives if you relocate to another state.

For the most part, New Year’s resolutions are hard to keep because many times you either list too many things or ones that aren’t manageable for the long haul – especially those that involve money. Here are a few simple tricks to help you make changes that are bite-sized, easy to implement, and more likely to stick.

Do a five-minute daily money check-in. Life is so busy that sometimes it’s easy to just spend money, then move on to the next task at hand. You might think, “I’ll check my bank balance later,” and then you never do. But if you’re serious about getting a handle on your finances, you might want to try this one thing: give yourself a “money minute.” Select a time of day, maybe after dinner, to log into your bank account. Take stock of what you spent money on. Did you really need that bottled water? That designer coffee? This way, you can nip those small (perhaps unnecessary) expenditures in the bud and make smarter choices in the coming days.

Get a money-saving app. One of the best ones to help you achieve financial goals is Ibotta. Let’s say you want to buy a new pair of running shoes; a good brand that’ll last. With this app, you’ll save on everyday purchases and when you’ve earned enough cash back, you can cash it in for a gift card from your selected store and get what you want.

Consider micro savings goals. This technique is actually about rewarding yourself financially for changing your behavior. For instance, every time you go to yoga or Pilates, stash away $5. Or if you wake up early or finish a difficult task, stash away $10. When you’ve saved enough money to buy whatever it is you’ve decided on beforehand, you’ve not only avoided the trap of putting your goodie on credit (and paying interest) but also most likely started a new, healthy habit.

Set up an automatic savings plan. After you’ve paid taxes, insurance premiums, and perhaps even your retirement account, you might consider tucking away money for yourself that you’ll never miss. Every. Single. Paycheck. That’s right. When you automatically have a set amount deducted every time you get paid, over time you’ll accumulate a bucket of money to use in whatever way you deem important – it could be saving for a vacation or a new car. It could also be a fund for emergencies. The point is, it’s an easy, failsafe way to save and achieve your goals.

Do one frugal thing a day. This is all about a little bit of forethought and then just taking action. And when you adopt this mindset, you’ll be working daily toward your financial goals like paying off debt, saving money to quit a job you hate, or even have enough extra cash to invest in real estate or whatever strikes your fancy. Here are a few things to consider: drink more water than soda. Eat at home. Use public transportation instead of driving when you can. But this just scratches the surface. For more smart ways to start living frugally, check out this super helpful article. You’ll be surprised at all the ways you can cut back and save.

All of these tricks are easy and, in some cases, no-brainers. When you take a few minutes, set your mind on what you want, anything’s possible. Here’s to fulfilling your dreams in the New Year! 

Sources: https://lifeandabudget.com/11-financial-resolutions-that-will-stick/