Year: 2026

2026 Tax Brackets, Standard Deductions and More

The tax brackets below apply to income earned during the 2026 calendar year. This is the income you report on the tax return due April 15, 2027 (or Oct. 15 with an extension). These are the final, official figures. The…

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The tax brackets below apply to income earned during the 2026 calendar year. This is the income you report on the tax return due April 15, 2027 (or Oct. 15 with an extension).
These are the final, official figures. The IRS published them on Oct. 9, 2025, in Revenue Procedure 2025-32, and they are the first set to reflect the July 2025 tax overhaul known as OBBBA (Public Law 119-21, formally titled the One Big Beautiful Bill Act). Most inflation-indexed amounts rose about 2.3 percent over 2025. The 10 percent and 12 percent brackets rose about 4 percent because OBBBA gave the two lowest brackets one extra year of indexing. The seven rates themselves did not move, and OBBBA wrote them into law for good.

 
Individual Tax Rates and Brackets

The grid below covers all four filing statuses for 2026. Each cell is the highest amount of taxable income taxed at that row’s rate; anything beyond it spills into the next rate. Your taxable income is whatever remains after you subtract the standard deduction or your itemized deductions from adjusted gross income.

Individual Income Tax Brackets: Tax Year 2026 (Top of Each Bracket, Taxable Income)
Rate Single Joint Separate Head of Household
10% $12,400 $24,800 $12,400 $17,700
12% $50,400 $100,800 $50,400 $67,450
22% $105,700 $211,400 $105,700 $105,700
24% $201,775 $403,550 $201,775 $201,750
32% $256,225 $512,450 $256,225 $256,200
35% $640,600 $768,700 $384,350 $640,600
37% Above $640,600 Above $768,700 Above $384,350 Above $640,600

Joint refers to spouses who combine everything on one return; Separate refers to spouses who each file on their own. Separate filers use the single thresholds through the 32 percent bracket, but their 35 percent bracket ends at $384,350, half of the joint figure.

Trusts & Estates Tax Brackets

Trusts and estates get their own, much narrower, rate schedule. The top rate arrives once taxable income passes just $16,000.

Trusts and Estates Tax Brackets: Tax Year 2026
Taxable Income Rate
Up to $3,300 10%
$3,300 to $11,700 24%
$11,700 to $16,000 35%
Beyond $16,000 37%

Standard Deductions

Here is the 2026 standard deduction for each filing status alongside the prior year. The 2025 column shows the amounts after OBBBA retroactively raised them in July 2025, not the lower figures the IRS had announced in late 2024. OBBBA also locked in the larger deduction going forward.

Standard Deduction Amounts
Filing Status 2026 2025 Increase
Single $16,100 $15,750 $350
Joint $32,200 $31,500 $700
Separate $16,100 $15,750 $350
Head of Household $24,150 $23,625 $525

Taxpayers who are 65 or older, blind or both get an additional amount per condition: $2,050 if unmarried and not a surviving spouse, otherwise $1,650. Separately, OBBBA created a temporary deduction of $6,000 for each taxpayer 65 or older, available for the 2025 through 2028 tax years. It shrinks by 6 cents for every dollar of modified AGI beyond $75,000 for a single filer or $150,000 on a joint return.

AMT Exemptions and Phase-Outs

The table below shows the 2026 AMT exemptions and the income level at which each one starts to shrink.

AMT Exemption Amounts: Tax Year 2026
Filing Status Phase-Out Starts At Exemption
Joint (and surviving spouses) $1,000,000 $140,200
Single filers and heads of household $500,000 $90,100
Married, filing separately $500,000 $70,100
Estates and trusts $104,800 $31,400

The phase-out is where OBBBA bites. In 2025 a single filer kept the full exemption until alternative minimum taxable income (AMTI) passed $626,350, and a couple until $1,252,700. OBBBA pulled those starting points back to a flat $500,000 and $1,000,000 (indexing resumes after 2026) and made the exemption disappear twice as fast: each dollar of AMTI beyond the threshold now wipes out half a dollar of exemption instead of a quarter. A single filer has no exemption left at $680,200 of AMTI, and a couple at $1,280,400.

Capital Gains

How a capital gain is taxed depends first on how long you owned the asset. Short-term gains, from assets owned 12 months or less, are added to your other income and taxed at the ordinary rates above.
Long-term gains come from assets owned longer than 12 months. The three rates (0 percent, 15 percent and 20 percent) are unchanged for 2026, but the taxable income levels that separate them have moved up. The table shows the top of the 0 percent band and the top of the 15 percent band for each filing status; anything higher is taxed at 20 percent.

Long-Term Capital Gains Thresholds: Tax Year 2026
Filing Status Top of 0% Band Top of 15% Band
Single $49,450 $545,500
Joint $98,900 $613,700
Separate $49,450 $306,850
Head of Household $66,200 $579,600
Estates and trusts $3,300 $16,250

Note that the 20 percent rate does not begin where the 37 percent bracket begins. A single filer reaches 20 percent once taxable income passes $545,500, roughly $95,000 before the 37 percent bracket starts at $640,600. Collectibles are capped at a 28 percent rate, and the 3.8 percent net investment income tax still applies above $200,000 of modified AGI ($250,000 for joint filers).

Conclusion

Use these amounts as a guide in understanding your tax situation for 2026, when you prepare and submit the return in 2027. Because these are official IRS figures rather than projections, you can rely on them now for withholding, estimated payments and year-end planning. They are also a good starting point for a conversation with your tax advisor.

Making the Most of the Q Ratio

Be it an internal or external valuation, there’s a bevy of options to value a business with ratios. Examples include price-to-earnings, price-to-sales or EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).

3 min read

Making the Most of the Q RatioBe it an internal or external valuation, there’s a bevy of options to value a business with ratios. Examples include price-to-earnings, price-to-sales or EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). Along with these available valuation options, another valuation option is the Q Ratio.

This metric compares a tangible asset’s market value against the same asset’s substitute values. This ratio, credited to inventor and Nobel laureate James Tobin, hypothesized that this valuation ratio can gauge whether a listed company’s overall equity market value should be approximately equivalent to a company’s asset replacement costs. This can be extrapolated to either one share of equity or the whole market.

The initial formula took the assets’ market value and divided it by the same assets’ replacement cost of capital.

However, it’s not always easy to approximate the total assets replacement costs. Therefore, assets book values are inserted in place of the assets replacement costs.

Consequently, the next iteration is:

Step 1: Add the Liabilities Market Value + Equity Market Value

Step 2: Divide the Sum of Step 1 by (Liabilities Market Value + Equity Book Value)

For the broad equity market:

= Equity Exchange Worth / Corporate Net Worth

Let’s look at how it’s calculated:

Company X’s 30 million shares are floating on public exchanges, priced at $15 per share. This equals the firm’s total market value. The firm has $450,000,000 in physical assets. The formula is as follows:

Q Ratio = (Total Market Value of Firm) divided by (Total Asset Value of Firm)

= $525,000,000 / $450,000,000

= 1.17

As the calculation says, this company’s market valuation is greater compared to the replacement cost. This shows the firm is likely to be overpriced and ripe for a possible takeover.

Interpreting Results

Utilized to calculate a company’s value, it’s important to understand how the resulting calculation works. If the resulting calculation is less than 1, a company’s booked assets hold more value than the value of its equity worth. An organization’s calculation under 1 implies that its market valuation is undervalued. It can be interpreted as a potential acquisition target by another company that can exploit its untapped value.

When a company’s Q ratio exceeds 1, its market value is greater than the book value (or replacement cost) of its assets. A high Q ratio often indicates that the market is placing value on unrecorded intangible assets – such as patents, brand equity or intellectual property – or expecting strong future growth, rather than simply meaning the company is overvalued. A ratio of more than 1 shows that a business’ earnings were greater compared to their assets replacement costs. This can be a sign that potential competitors may step in to create competition to garner a portion of the business’ profits.

When a company’s Q ratio is exactly 1, the company’s assets are said to be reasonably priced.

Considerations

Market speculation, along with intangible assets, there are two main sticking points when evaluating the resulting Q ratio. When analysts’ projections impact a business’ market valuation or price target, these market forecasts can’t necessarily be articulated via financial statement and accounting analysis. This can skew how the market values company equities. Market hype can’t be recorded in a company’s financial statements. Intangible assets or goodwill is the other component that cannot be fully valued – only estimated. The calculation must similarly be considered if a business holds extensive intellectual property, especially high-growth, technology-based companies.

While there are many ways to value a company or the entire equity market, understanding how this ratio is calculated is essential to being versatile with financial valuations.

Required Minimum Distribution Tactics

At age 73, investors must begin taking distributions from tax-deferred retirement accounts, even if still working. One exception: many workplace plans let you delay RMDs…

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Required Minimum Distribution TacticsAt age 73, investors must begin taking distributions from tax-deferred retirement accounts, even if still working. One exception: many workplace plans let you delay RMDs from your current employer’s plan until you retire if you are still employed and own no more than 5 percent of the business; IRAs and former employers’ plans get no such break. (Those born in 1960 or later start at age 75.) If you fail to take the full required minimum distribution (RMD), the IRS charges a 25 percent penalty on the shortfall, reduced to 10 percent if corrected within about two years. The rules cover traditional IRAs along with 401(k) and 403(b) plans; Roth IRAs and Roth 401(k)s are exempt during the owner’s lifetime, though inherited Roth accounts are.

Each year’s deadline is Dec. 31. Your RMD amount is fixed by your balance on the prior Dec. 31, so timing does not change what you owe; waiting until year end simply keeps the money growing tax-deferred longer. The initial RMD is due for the year in which you turn 73. You can wait as late as April 1 the following year, but that stacks two distributions into a single tax year, which could push you into a higher bracket. RMDs are taxed as regular income.

Roth Conversion

If you expect RMDs to push you into a higher bracket, shrink your tax-deferred balances before they begin. In the years before age 73, ideally low-income years after you retire, you can convert part of a traditional IRA or 401(k) to a Roth IRA. A conversion moves money directly from the pre-tax account to the Roth, so the annual Roth contribution limit, earned-income requirement and 10 percent early-withdrawal penalty do not apply. The amount converted is taxed as regular income that year, but the assets then grow tax-free with no lifetime RMDs. Two cautions: once RMDs begin, the year’s RMD must be withdrawn first and cannot itself be converted, and each conversion carries its own five-year holding period.

In-Kind Distributions

An in-kind RMD transfers securities from your retirement account to a taxable brokerage account without selling them first. The RMD amount is still taxed as regular income, but the shares stay invested. Because no cash changes hands, nothing is withheld; most custodians ask you to waive withholding or sell enough shares to cover it. If you waive it, cover the tax through estimated payments to avoid an underpayment penalty.

Your cost basis resets to the shares’ fair market value on the distribution date, and a new holding period begins. Growth after that is taxed at the lower long-term capital gain rate once the shares have been held more than a year.

For example, assume you distribute stock worth $20,000 that was bought inside the IRA for $12,000. The full $20,000 is taxed as regular income, not just the $8,000 of growth, because none of that money has been taxed yet. Your basis in the taxable account becomes $20,000, so you later pay capital gains tax only on appreciation above that.

Batching RMDs – Or Not

Many retirees hold more than one IRA (traditional, rollover, SEP or SIMPLE), and each has its own RMD. Although each account’s figure is calculated separately, you may add them together and withdraw the combined amount from whichever of those IRAs you prefer. The same rule applies among 403(b)s. You may not aggregate across account types: each 401(k) requires its own RMD, and inherited IRAs cannot be combined with your own (only with each other, if from the same decedent).

Qualified Charitable Distributions (QCD)

For the charity minded, a qualified charitable distribution has your IRA custodian pay a charity directly on your behalf. The amount satisfies some or all of your RMD yet never enters your taxable income, which lowers your adjusted gross income and helps whether or not you itemize. QCDs are available from age 70½, must come from an IRA (not a 401(k)), must be paid by the custodian directly to the charity, and cannot go to donor-advised funds or private foundations. The 2026 cap is $111,000 per person. Tell your tax preparer; the 1099-R will not flag it.

 

7 Grocery Hacks to Lower Your Costs

These days, it seems like prices are going up, especially at the grocery story. In fact, the all-item Consumer Price Index (CPI), a measure of economy-wide inflation, claimed food prices in September 2026 were 2.5 percent…

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7 Grocery Hacks to Lower Your CostsThese days, it seems like prices are going up, especially at the grocery story. In fact, the all-item Consumer Price Index (CPI), a measure of economy-wide inflation, claimed food prices in September 2026 were 2.5 percent higher than in September 2025. But don’t despair, there are some ways to save. Here are some quick hacks you can use to beat price creep.

Get Supermarket Apps

Your phone’s app store probably has an app from your neighborhood grocery store just waiting for your download. When you get it, make sure you join the loyalty program, where points can add up. Plus, check out the weekly/daily deals and take advantage of them. If you do this regularly, you’ll save a large chunk of change.

Keep Your Coupon Books

You know those booklets you get in the mail from the local grocery store that are pages long, usually show up on Tuesdays and you throw them away? Don’t. Save them, scour them and snag low prices. Make this a regular habit and you’ll definitely save.

Save the Coupons in the Bag

Related to the above item, there are often coupons stuffed into the bottom of your bag during checkout. Make sure you look to see whether you might use them, then put them in a safe place and grab them the next time you head out.

Make a List

Before you leave the house, jot down what you need. In fact, start an evergreen list on your phone in your notes tab that you can update with each grocery run. If you stick to the list, there’s a big chance you won’t buy things you won’t eat and/or rack up a big bill. Another hack? Never go to the grocery store hungry. You might end up buying more than you need and regret it later!

Give Meat the Day Off

Meat is one item that’s most always on the rise. In fact, as of April 2026, ground beef was priced on average $6.90 per pound, according to the Federal Reserve Bank of St. Louis. So, what to do? Try to swap it with black beans, tempeh, tofu or any other non-meat protein. Cook these delicious meals several times a week and if you’re interested, browse these meatless dinner ideas. Over time, you’ll save a lot of MOO-lah.

Use Curbside Pickup

If you’re pressed for time and/or struggle with impulse buying, this is the hack for you. When you order food online, chances are you’ll order only essentials and not the goodies that call your name when you’re in the store. Best of all, at most big box stores like Target, Walmart and Kroger, the service is free. Another plus: You’ll be able to see your total – and if it’s a bit high, you can edit it and reduce your cost.

Eat Your Leftovers

If you really want to save on groceries, heat up your meal from the day before. Resist throwing it away, going out or ordering takeout on the way home. One way to make eating leftovers go the distance is to make a double portion. This way, you won’t be stuck with a tiny bit of food that sits in your fridge uneaten for days.

If you integrate these hacks into your daily routine, over time, you’ll notice a difference and prevent high prices from eating into your budget.

Sources

Food Price Outlook – Summary Findings | Economic Research Service

6 Ways To Cut Grocery Costs as Inflation Jumps Again

The Shift to Agentic AI: Why Multi-Step Automation Is Replacing Basic Chatbots (and How to Prepare Your Business)

When a customer asks about a delayed order, a traditional chatbot provides a tracking link or explains the shipping policy. This offers a fast response. However, a human employee still has to log into the inventory management…

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The Shift to Agentic AI: Why Multi-Step Automation Is Replacing Basic Chatbots (and How to Prepare Your Business)When a customer asks about a delayed order, a traditional chatbot provides a tracking link or explains the shipping policy. This offers a fast response. However, a human employee still has to log into the inventory management system, track down the order, email the logistics provider and update the customer relationship management (CRM) system.

A more capable AI system retrieves the order details, checks the latest shipping status, drafts an appropriate response, updates the CRM system and notifies a human employee for a final review.

The difference between the two systems is the ability to coordinate work across multiple steps. This is the promise of agentic AI.

What is Agentic AI and How is it Different?

Agentic AI describes software that works toward a goal by carrying out a sequence of steps. These steps include planning, using tools, checking results and adjusting actions based on the information available.

Traditional rule-based chatbots follow predefined rules and decisions paths. Generative AI assistants can interpret natural language requests and produce flexible responses, summaries and drafts. Workflow automation tools connect applications and execute predictable actions when specified conditions are met.

Agentic AI builds on these capabilities by allowing a system to determine and carry out a sequence of steps toward a goal, within defined boundaries. For example, while an AI assistant can draft a sales follow-up email when requested, an AI agent can research a lead using approved sources, summarize relevant information, update the CRM, prepare a personalized email and send it for approval before delivery.

Pressures Driving Agentic AI

  1. Disconnected tools – Employees in most cases have to copy data between an application like the CRM, an inventory system and accounting software. Each handoff costs minutes and invites errors. Agents that work across applications can carry context between them.
  2. Customer expectations – A fast response from a chatbot means little if the resolution will take days. When connected to reliable systems and properly configured tools, AI Agents can shorten the information gathering and preparation stages that delay resolution.
  3. Capacity – Growing companies need more output without proportionally more headcount. Offloading repetitive coordination frees people for judgment-heavy work.

Where Businesses Can Apply Agentic AI

Organizations are deploying agentic AI solutions across core operational areas to streamline multistep processes:

  • Sales and business development – Instead of a representative spending hours researching leads, an AI agent can analyze inbound inquiries, cross-reference company profiles using web tools, populate CRM fields and draft tailored follow-up proposals for human review.
  • Customer support and case management – Beyond answering frequently asked questions, AI agents can investigate customer issues, verify records, troubleshoot problems and prepare solutions.
  • Finance and back-office operations – In accounts payable, an agent can extract structured data from incoming PDF invoices, match line items against existing purchase orders, flag price discrepancies and prepare payment records. Proposed payments can then be submitted for approval before execution.
  • Marketing operations – An agent can aggregate weekly campaign metrics across multiple advertising channels, highlight underperforming assets, draft updated copy variations and submit them to the marketing director for approval before pushing changes live.

How to Prepare Your Business for Agentic AI

While agentic AI offers substantial operational benefit, autonomous execution introduces risks. For example, inaccurate information can be carried into subsequent steps, potentially resulting in incorrect records or actions. Excessive systems permissions can create security vulnerabilities, while inadequate audit trails make it difficult to investigate errors or demonstrate compliance. Therefore, any adoption strategy must include strict access controls, comprehensive decision logs and human oversight at critical decision points.

Adopting agentic workflows does not require an immediate, companywide overhaul. Instead, businesses should follow a structured, low-risk roadmap.

  • Select one high-friction workflow – Identify a repetitive, well-defined process that currently requires manual coordination across two or three applications.
  • Map the process and set baselines – Document every step, decision tree and common exception. Establish baseline metrics for task completion time, error rates and operational cost.
  • Pilot with strict guardrails – Deploy a focused AI agent in a controlled environment. Restrict write permissions and configure mandatory human-in-the-loop approvals for external facing actions or financial commitments.
  • Audit, measure and scale – Review performance logs, assess error rates, refine prompt instructions and tool integrations, and expand autonomy only after demonstrating consistent, safe outcomes.

Conclusion

The shift toward agentic AI represents a significant development in business process automation. Sustainable competitive advantage will not come simply from adopting the latest conversational tools, but from intentionally redesigning business processes to combine machine execution with human judgment. 

Cracking Down on Identity Theft and Dating App Scams, Strengthening Emergency Alerts, Law Enforcement and College Sports

Improving Social Security’s Service to Victims of Identity Theft Act (HR 5345) – The purpose of this legislation is to provide a single point of contact at the Social Security Administration…

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Cracking Down on Identity Theft and Dating App Scams, Strengthening Emergency Alerts, Law Enforcement and College SportsImproving Social Security’s Service to Victims of Identity Theft Act (HR 5345) – The purpose of this legislation is to provide a single point of contact at the Social Security Administration for victims of identity theft. A team of specially trained employees will track cases from beginning to end, including coordination with other agencies as necessary. The bill was introduced by Rep. David Kustroff (R-TN) on Sept. 15, 2025. It passed in the House on Dec. 1, 2025, the Senate on Sept. 17, 2026, and was signed into law on Oct. 7.

Romance Scam Prevention Act (HRs 2481) – This bill requires online dating service providers to issue fraud ban notifications to online dating service members. The notices would also include statements that banned users may be using a false identity and that users should not send money or personal financial information to another user. The legislation was introduced by Rep. David Valadao (R-CA) on March 31, 2025. It passed in the House on June 23, 2025, in the Senate on Sept. 23, 2026, and was enacted by the president on Oct. 20.

End Tax Penalties on American Hostages Act (HR 9496) – This legislation postpones federal tax deadlines and suspends penalties for U.S. nationals who are unlawfully detained or held hostage abroad. Introduced by Rep. Claudia Tenney (R-NY) on June 29, the bill passed in both chambers during September and currently awaits the president’s signature.

Mystic Alerts Act (HR 7022) – This bipartisan bill was introduced by Rep. August Pfluger (R-TX) on Jan. 12. Named in honor of the people who died at Camp Mystic in Texas during the 2025 floods, this act authorizes wireless emergency alerts to be transmitted to mobile devices by satellite, making them more available via commercial mobile service providers to personal devices (on an opt-out basis). It passed in the House on April 20, in the Senate on Sept. 30 and has yet to be enacted.

Criminal History Access Act of 2026 (HR 8352) – Introduced by Rep. Derek Schmidt (R-KS) on April 16, this bill would enable law enforcement agencies to access criminal history record information maintained by the Federal Bureau of Investigation for the purposes of hiring, training and assessing ethical conduct. This act passed in the House on May 12, in the Senate on Sept. 30 and currently awaits enactment.

Bankruptcy Threshold Adjustment Act of 2026 (HR 7730) – This bill restores previously expired (2024) debt limits for Subchapter V (small business) and Chapter 13 (personal) bankruptcies. Under Subchapter V, the debt limit increases from $3.4 million to $7.5 million. Under Chapter 13, the debt limit increases from around $2.1 million to $2.75 million. The bill was introduced on Sept. 11, 2025, by Rep. Jimmy Panetta (D-CA). The restored limits enable a quicker and less expensive reorganization process. Introduced on Feb. 26 by Rep. Ben Cline (R-VA), the bill passed in the House on Sept. 16, in the Senate on Sept. 28 and currently awaits the president’s signature.

Protect College Sports Act of 2026 (S 4668) – This act, introduced by Sen. Ted Cruz (R-TX) on June 2, is designed to protect the name, image and likeness rights of student athletes. It also limits athletes’ ability to transfer to another school more than once during their collegiate career without having to miss a season. One of the more controversial components is that the bill would increase direct player spending caps from roughly $21.5 million to approximately $49.2 million, which would give larger, well-funded university athletic programs a competitive recruiting edge. The act passed in the House on Sept. 28 and is under consideration in the Senate.

Initial Public Offering Considerations

On a year-over-year basis from 2025 to 2026, the number of Initial Public Offerings (IPOs) jumped from 180 to 208 for the first six months, increasing from $27 billion to $137 billion, based on a U.S. Securities and…

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Initial Public Offering ConsiderationsOn a year-over-year basis from 2025 to 2026, the number of Initial Public Offerings (IPOs) jumped from 180 to 208 for the first six months, increasing from $27 billion to $137 billion, based on a U.S. Securities and Exchange Commission press release from September. With additional paid-in-capital (APIC) a major consideration during an IPO, it’s important to consider how it works and how to account for it. 

APIC Defined

APIC is the portion of the stock price that investors value, by their purchase price, above the equity’s par value. It’s the premium that investors assign to the company’s equity on the stock exchange, based on the company’s existing value.

One integral thing to note is that APIC happens only for transactions originating from the primary market or when tendered straight from the business. While transactions post-IPO don’t generate APIC, common as well as preferred stock classes can see APIC creation.

APIC is determined as follows: = (Issue Price minus Par Value) x Amount of Equities Obtained by Investors

There are three primary factors that go into the calculation: how many shares are floating publicly, the issuing company’s assigned equity par value, and the Initial Public Offering’s issue price.

Illustrating How APIC is Calculated

If a stock’s par value is $0.01, it is issued at $15 per share, and 19.33 million common shares are issued at the IPO, the APIC is:

APIC = ($15 – $0.01) x 19,330,000

APIC = $14.99 x 19,330,000 = $289,756,700

Par Value = $0.01 x 19,330,000 = $193,300

Based upon the issue price and the par value, this results in the premium per share of $14.99.

Defining Par Value

This is a token amount assigned to common and/or preferred equities. Company management determines par value before the market establishes the equity’s worth. Sometimes equities are issued with no par value stock. If par value is required, it may be as little as one cent per share.

Issue Price

Issue price is in contrast to what investors value and expect the company to be worth. In this case, the price would be $15 per share.

Accounting Considerations

APIC is recorded in the shareholders’ equity section of the balance sheet. It is the equity-side offset to the cash the company receives in the offering: cash goes up by the total proceeds on the asset side, and common stock (par value) plus APIC go up by the same amount on the equity side, so the balance sheet stays in balance.Along with the retained earnings, it’s more often the biggest part of shareholder equity.

APIC provides companies a way to obtain cash without having to exchange guarantees with investors.

Looking at the journal entry, it’d be entered as follows:

 

  Debit Credi
Cash $15.00  
Common stock (par value)   $0.01
Additional paid-in capital (APIC)   $14.99

 

Based on the journal entry, the APIC portion is entered as a credit. Since APIC concerns stocks, the credit of $14.99 increases the balance of the equity account. As the company issues common stock, the company receives cash. The cash flow statement’s financing section would document the trade via a cash inflow.

Conclusion 

Understanding how APIC works is essential for businesses, especially those considering to take their company from the private to the public equity markets.

Rolling Over Your 401(k) Just Got Less Painful – Here’s What the IRS Changed

Anyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later…

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Rolling Over Your 401kAnyone who has moved retirement money out of an old employer’s plan knows how frustrating it can be. Every administrator has their own forms. Timelines are all over the place. Paper checks show up weeks later with vague instructions. The whole thing should have been fixed a long time ago.

The IRS is finally doing something about it. Notice 2026-49 puts out four sample forms and a five-step procedure meant to bring some consistency to direct rollovers. Plans do not have to use them, and there is no safe harbor, but you can see where this is going.

The Problem Worth Solving

When you leave a job, you have to figure out what to do with your 401(k). You can cash it out and take the tax hit. You can leave it sitting there. Or you can roll it into a new employer’s plan or an IRA.

A direct rollover is usually the way to go. The money travels straight from the old plan to the new one without ever hitting your bank account, which keeps things clean and avoids the 60-day deadline you face if you take possession yourself.

The trouble is that every plan does things differently. A 2024 GAO study found that roughly one in three people doing rollovers ended up with a paper check in hand that they were supposed to forward themselves. Checks get lost. They sit on the counter for weeks. And the whole time, that money is not invested anywhere.

How the New System Works

Here is what Treasury is proposing. You fill out Form 1 and give it to the plan or IRA that will be receiving your money. That form lets the receiving plan reach out to your old plan and handle the transfer on your behalf. The two plans swap Forms 2 through 4 to make sure everything is in order. If something goes sideways, the receiving plan has to tell you.

The IRS wants this done electronically whenever possible. When electronic is not an option, the old plan should write a check payable to the receiving plan for your benefit and mail it directly there. No more sending checks to participants and hoping they take it from there.

Tax Rules Stay the Same

None of this changes how rollovers are taxed. Eligible distributions that complete a proper rollover still stay out of income. You still cannot roll over a required minimum distribution. Pre-tax money stays pre-tax. Roth stays Roth. This is about the plumbing, not the tax code.

IRA-to-IRA transfers are not covered here. Those already go through the ACATS electronic system, so Treasury left them alone.

No Safe Harbor Yet

Plans can use these forms, change them, or ignore them completely. Right now, there is no reward for following along.

That could change. Treasury says it is thinking about offering safe harbors down the road. A receiving plan that uses the standard forms might eventually be allowed to assume the rollover is valid unless something looks off. That would give administrators a real incentive to adopt the new process.

Conclusion and What Comes Next

The IRS has hinted at bigger changes. Future guidance might require electronic transfers across the board, kill off the practice of mailing checks to participants, and get rid of some of the procedural friction that slows things down.

For now, the sample forms are sitting in the appendix of Notice 2026-49. They are there if you want them. If you have ever spent weeks tracking down a check that went to the wrong address or trying to explain one plan’s process to another plan’s administrator, you understand what Treasury is trying to fix. They want rollovers to be faster, simpler, and harder to mess up. This is a start.

Valuation Reserve Requirements

According to FitchRatings, over the past 12 months ending August 2026, there were 109 defaults by 89 entities, compared to the same period ending July 2026 where 83 entities saw 105 defaults. With businesses (especially life insurers) exposed to asset…

3 min read

Valuation Reserve Requirements, what is AVRAccording to Fitch Ratings, over the past 12 months ending August 2026, there were 109 defaults by 89 entities, compared to the same period ending July 2026, when 83 entities saw 105 defaults. With businesses (especially life insurers) exposed to asset management risks, it’s important to understand how to find financial balance.

Defining Asset Valuation Reserve (AVR)

An AVR is a repository for life insurance companies to offset a drop in markets and/or asset portfolios that are meant to fulfill contractual obligations for claims, annuities, and related insurance obligations.

According to the American Council of Life Insurers and the National Association of Insurance Commissioners (NAIC), the AVR factors in every realized investment profit and loss after factoring in net deferred taxes for credit and equity investments. Companies are required to fund the AVR initially and adjust it annually to manage ongoing and future obligations.

As part of the agreement that insurance companies have to pay out an insurance claim in exchange for receiving premiums, an insurance company has to ensure they are financially solvent to keep paying out claims. The same requirement also pertains to annuities that an insurance company contracts with customers, including making periodic payments. Through the valuation reserve requirements, insurance companies can measure their reserves and investments to increase the chance they’ll be able to meet their financial obligations regularly.   

Depending on the interest rate environment, insurance companies can experience threats to their allocated reserves to continue annuity payments over time compared to life benefits paid out all at once. Based on the American Council of Life Insurers, the percentage in reserves for annuities increased to 23 percent in 1990, up from 8 percent in 1980, showing how insurers must keep up with client demands and manage risk.    

How it’s Constructed

An AVR creates an organized set of entries for the assets and liabilities. Insurance companies are also able to compare assets and liabilities against actuarial valuation standards to plan for projected unknown, unsettled asset shortfalls. It also helps companies monitor the appropriate detection of long-term anticipated stock investment proceeds. For publicly traded insurance companies, it provides greater transparency for equity and bond holders, along with regulators.

The default component accounts for four-fifths of the AVR. Insurance companies implement investment vehicles such as mortgages and fixed-income options to manage their credit risk. As the name implies, the equity piece of the AVR balances the reserve with preferred and common equities or stocks, along with real estate investments. This mix is required for insurance companies because it creates a buffer from gains realized from positive market years, which offset insurance company obligations during periods of negative market performance.

Building the AVR is unique to each company’s financial makeup and needs to be dynamic, but must follow industry standards. While insurers or any market participant cannot predict the market with 100 percent accuracy, insurers with a properly constructed and reported AVR can more easily navigate an economy that becomes turbulent and uncertain.

Sources

https://www.fitchratings.com/research/corporate-finance/fitch-ratings-us-private-credit-default-rate-rose-to-6-3-in-august-2026-14-09-2026

https://www.acli.com/-/media/ACLI/Files/Fact-BooksPublic/2019FLifeInsurersFactBook.ashx?la=en

https://content.naic.org/sites/default/files/call_materials/4%20-%20AVR%20IMR%20Final%20Rept%20to%20NAIC%20%20Dec%202002.pdf

Heirless Estate Planning

The purpose of estate planning is to distribute your assets to heirs in a formal, legal process. If you do not have any heirs to speak of, you might not feel the need to do this. However, your assets will go somewhere, so you may…

6 min read

Heirless Estate PlanningThe purpose of estate planning is to distribute your assets to heirs in a formal, legal process. If you do not have any heirs to speak of, you might not feel the need to do this. However, your assets will go somewhere, so you may want to have control over that before the state steps in to decide for you.

Without a formal will, the general rule for inheritance distribution starts with a surviving spouse and children (who often share the estate), followed by grandchildren, parents, siblings, nephews and nieces, grandparents, then other extended relatives such as aunts, uncles and cousins. The exact order varies by state. Note that ex-spouses, and in most states stepchildren, receive nothing under standard state inheritance laws; they must be specified in a will or trust document, or named as an account beneficiary, to receive any consideration.

This means that, without a will or close family heir, your assets could go to an estranged sibling or even a cousin you’ve never met. If you have absolutely no family left when you pass on, the proceeds generally go to the state through a process called escheat (this includes funds from physical assets that are auctioned off).

Start with Living Matters

Before you start allocating where your assets go after your death, first complete paperwork assigning people to manage your assets if you ever become incapacitated while still alive. The key documents include:

  • Durable Power of Attorney (DPOA) – this document names an agent, such as a trusted friend, attorney, or bank trust department, to take over managing your financial and legal affairs if you are deemed unable.
  • Health Care Directive – authorizes someone to make medical decisions on your behalf when you are unable.
  • Living Will – details what life-saving procedures and treatments you would and would not like to receive in order to keep you alive. Separately, a DNR (do not resuscitate) order, signed by your physician, directs medical staff not to perform CPR if your heart or breathing stops.

Choose Your Estate Manager

Your will should assign an executor to manage your estate once you pass away. Again, this can be a friend or a custodian (e.g., bank, attorney, financial advisor). This person is responsible for initiating probate court proceedings and distributing assets as dictated by your will. Responsibilities may include notifying your landlord/lender(s), utility providers, banks, credit card companies, investments, and insurance companies of your passing, as well as managing the sale of any property you own. Most states allow any competent adult to serve as executor, including the attorney who drafted your will, though some states restrict people with felony convictions or those who live out of state.

It behooves the heirless to consider estate planning to better allocate funds toward people or causes they care about, such as friends, coworkers, or charities. For example:

  • Animal shelter or humane society
  • Local church or other religious institution
  • The public library
  • The Public Broadcasting Service (PBS)
  • A local land trust, the World Wildlife Fund or other conservation organizations
  • A favorite city institution, such as a museum, zoo, symphony, ballet or theater
  • Scholarship fund for your alma mater – K-12 or university
  • YMCA or Jewish community center
  • Medical institutions, such as local clinics, St. Jude Children’s Research Hospital, Planned Parenthood, cancer or other disease research
  • Charities for children, such as the National Center for Missing & Exploited Children or Children’s Health Fund

If nothing local appeals, browse options at websites such as CharityWatch.org, a website dedicated to assessing how efficiently charities use donations.

Note that retirement accounts and life insurance policies generally request a beneficiary, and many bank and brokerage accounts allow one. You may not even remember that when you opened an account years ago, you listed your boyfriend or wife at the time as your beneficiary, even though that person is now your ex. Be aware that these beneficiary designations supersede any will instructions. These assets pass directly to the named beneficiary outside of probate, without going through your executor. Be sure to check and confirm your beneficiary designations while you are still alive to eliminate this issue. Many states automatically revoke an ex-spouse’s designation after a divorce, but that rule generally does not apply to employer retirement plans such as 401(k)s, so an ex could still collect. If no beneficiary is named, the account typically becomes part of your estate and goes through probate.

Charitable Donations

For people with substantial assets who want to leave money to one or more charities, sophisticated philanthropic vehicles include:

  • Charitable remainder trust – The money is deposited into a trust while you are still alive. You receive an immediate tax deduction based on the present value of the charity’s future share (the remainder interest) of this irrevocable trust, as well as an income stream from the trust for life or for a set term of up to 20 years. When the trust ends, whatever charity you designate receives the remaining assets.
  • Donor-advised funds – You make an irrevocable, tax-deductible contribution of cash, securities, or appreciated noncash assets to a fund, which is professionally managed for future growth. You may recommend money be granted to a qualified 501(c)(3) charity over time, basically leaving a legacy that continues to give.
  • Private foundations – You can actually start your own charitable organization with an initial tax-deductible gift and appoint a board of directors or trustees (who may receive reasonable compensation) to manage and distribute assets according to your wishes. Foundations can make grants beyond public charities in limited cases, but only under strict IRS rules. They must also distribute at least 5 percent of their assets each year and pay an excise tax on investment income, and donors face lower deduction limits than for gifts to public charities.

It is best to consult with a financial advisor, tax professional, or estate planning attorney with experience in setting up a sophisticated charitable giving plan to make the most of your contributions.