Category: Blog

Understanding the Customer Acquisition Cost (CAC)

What is Customer Acquisition Cost CAC?The Customer Acquisition Cost (CAC) measures how much a company spends to obtain new, additional customers. Oftentimes, this calculation is used with the customer lifetime value (LTV) metric, that also projects the customer’s profitability to calculate the newly acquired customer’s value.

It’s primarily used to measure a business’ sales and marketing departments to figure out their profitability, profit margin and return on investment figures.

How to Calculate

CAC = Sales and Marketing Expense / Number of New Customers

Examples of the expenses include product and service promotion expenditures, special compensation and commissions, regular wage payments, and operating expenses.

The tally of newly acquired customers is simply how many new, unique contracts the business acquired. It’s important to keep the expenses and customer acquisition numbers consistent over the same periods.

Why It’s Important

Business owners and their managers, along with investors, can look at sales and marketing efforts from the return on investment of their expenditures and outcomes. For example, there could be multiple channels that sales and marketing took to obtain new customers over a quarter, half-year or 12-month period (such as email marketing, social media marketing, conferences, etc.). Based upon each channel, the customer acquisition cost is determined by dividing the financial outlay per customer acquired.

From there, each channel can be analyzed to see which one works well and, equally important, which ones don’t work well and should either be discontinued or modified. Internal stakeholders and external investors (both existing and potential) can look at trends to see how ongoing efforts may be working and if existing management is productive or needs to be replaced with more competent individuals.

Accounting Considerations

Based on FASB’s Accounting Standards Codification 340-40, businesses are required to document and capitalize incremental costs of securing new customer business if the related expenses are projected to be recouped.

An incremental cost in the scope of obtaining a contract is a cost an entity incurs to obtain a contract that wouldn’t have been incurred if the contract hadn’t been obtained.

While a sales commission (be it fixed or a percentage of a new contract) may be considered an eligible incremental cost to one of its employees, it’s not necessarily always the case. Rather, the true test of whether an incremental cost is capitalizable depends on the subjective interpretation of if a mandated financial expenditure for an incremental cost is attributed to signing a contract with a new customer.

The following sample situations often require more investigation to determine whether the capitalization of costs is applicable:

  • Equity issuances based upon meeting production and essential function goals
  • Employee compensation according to previous years’ executed contracts
  • Sales commissions allocated over multiple timeframes and/or to more than one employee for a single contract

ASC 340-40 also stipulates the amortization schedule of capitalization costs of obtaining a customer contract on a scheduled timeline that follows the delivery to the customer of the contracted goods or services.

Conclusion

While the customer acquisition cost may be straightforward, when it comes to subjective cases, businesses that have experience with murkier situations are able to make the most of their subjective sales and marketing expenses when navigating the tax and accounting landscape. 

Understanding Cash EBITDA

What is Cash EBITDAWhile Cash EBITDA isn’t recognized by generally accepted accounting principles (GAAP), it’s a way for company owners and investors to account for deferred revenue during valuation modeling. This financial metric measures a business’ year-over-year change in postponed revenue to analyze a company’s financial situation.

Defining EBITDA

Before Cash EBITDA is defined, EBITDA must be defined.

EBITDA = earnings before interest, taxes, depreciation, and amortization

This metric is used quite often in financial analysis. Business owners, investors and financial analysts use this metric to examine different companies’ fiscal achievements against sector competitors and to determine the business’ profits from its core functions. 

Since financial statements are required by the U.S. Securities and Exchange Commission (SEC) and financial analysts are presented with varied filings, it still needs to be standardized for analysis. Though it’s not GAAP recognized, EBITDA and adjusted EBITDA are often reported by companies that can make peer-to-peer businesses easier to compare financials.

Some believe it’s not the best comparison due to many factors, including varying tax profiles, capital structures, and capitalization policies that affect net income. It’s important to be mindful that EBITDA doesn’t give any details regarding how a business’ working capital varies with its reinvestment into a business’ capital expenditures.

Some say EBITDA overstates profitability. Others believe EBITDA doesn’t factor in the cost of assets in evaluating profitability. For example, if two companies have the same EBITDA, but one is highly levered, the company with no to little debt is in better shape. 

Determining EBITDA

The income statement has tax expenses, net income, and interest expenses on it. If not found on the cash flow statement, the depreciation and amortization figures may be found on the financial statement footnotes. While EBITDA is a start, further refinement of EBITDA by using Cash EBITDA is a better financial definition.

Calculating Cash EBITDA

It’s important to account for deferred revenue properly. Since deferred revenue is revenue remitted in advance for products or services to be delivered at a future date, and revenue is recorded on the income statement when fulfillment happens, Cash EBITDA helps businesses and investors obtain a better picture of a company’s financial situation.

The deferred revenue or prepayment is recorded as a liability since the product or service hasn’t been delivered. Once fulfillment has occurred, it’s recognized as income. Therefore, it’s calculated as follows:

Cash EBITDA = TTM EBITDA + Year-over-Year Change in Deferred Revenue 

TTM EBITDA is the 12-month trailing EBITA. Also referred to as last twelve months (LTM), it’s the immediate 12 months of operating earnings. This way, the figure can be updated on a monthly or quarterly basis as the company adds new accounts.

The second component, derived from the balance sheet, is the annual change in deferred revenue.    

This formula is important and useful because if a new client is booked in the first three months of the year, and during a valuation analysis, if Cash EBITDA isn’t calculated, it would skew the valuation since it wouldn’t include new accounts.        

While GAAP is an important institution in the accounting and financial industry, businesses and investors that use well-regarded financial metrics beyond GAAP standards can make better-informed decisions.

Facilitating Access to Housing and In-State Tuition, Sanctioning Iran and the Battle Over DHS Funding

Facilitating Access to Housing and In-State Tuition, Sanctioning Iran and the Battle Over DHS Funding21st Century ROAD to Housing Act (HR 6644) – As many local governments face the problem of rising affordability and severe housing shortages, this bipartisan bill would update existing housing programs to increase the housing supply, as well as streamline federal regulations that slow construction. Among its provisions, the legislation would authorize a pilot program designed to convert vacant or underused buildings into residential housing, issue grants for infrastructure improvements for utilities and transportation, and include construction of new housing units for low- and moderate-income residents. The legislation was introduced on Dec. 11, 2025, by Rep. French Hill (R-AR). It originally passed in the House on Feb. 9, but the Senate made changes before passing it on March 12. It has returned to the House for a final vote.

Territorial Student Access to Higher Education Act (HR 6472) – This act would amend the Higher Education Act of 1965 to provide for in-state tuition rates for certain residents of Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the United States Virgin Islands. The bill would help offset the high cost of attending college on the U.S. mainland, which prohibitively adds thousands of dollars to airfare, housing, and basic living expenses incurred by citizens of U.S. territories. The legislation was introduced by Rep. James Moylan (R-Guam) on Dec. 4, 2025. It passed the House on March 7 and is currently under consideration in the Senate.

Enhanced Iran Sanctions Act of 2025 (HR 1422) – On Feb. 8, 2025, Rep. Michael Lawler (R-NY) introduced this bill to strengthen secondary sanctions on foreign entities (e.g., banks, insurers, pipeline construction and operation facilities) that help process, export, or sell illicit Iranian oil, including for liquified natural gas. The bill lay dormant in the House until late February, when the U.S. launched its attack on Iran. On March 10, the bill was updated to include an interagency work group to develop more sanctions related to Iran and a multinational effort to enforce sanctions. The latest version of the act was passed in the House on March 16; its fate currently lies in the Senate.

Servicemembers’ Credit Monitoring Enhancement Act (S 2074) – The purpose of this bill is to provide free credit monitoring for veterans. Presently, only active duty members can take advantage of this service. The bill was introduced by Sen. Amy Klobuchar (D-MN) on June 12, 2025. It passed unanimously in the Senate on March 5 and is currently under consideration in the House.

Department of Homeland Security Appropriations Act, 2026 (HR 7744) – This is the bill that is currently holding up appropriations for the Department of Homeland Security (DHS) for the fiscal year ending Sept. 30. The bill was introduced by Rep. Tom Cole (R-OK) on March 2 and passed in the House on March 5. However, it has triggered a partial government shutdown and is under heated debate in the Senate. Republicans insist on passing the complete bill with increased funding for national security and border protection. The legislation also includes provisions prohibiting funds for Diversity, Equity and Inclusion and Critical Race Theory programs, as well as abortions and gender-affirming care for ICE detainees. Senate Democrats are seeking to include guardrails that would prohibit ICE agents from wearing masks or entering homes, schools, hospitals, etc., without a judicial warrant.

PAY TSA Act of 2026 – Rep. Nick Langworthy (R-NY) introduced a carve-out bill for DHS on March 16, authorizing specific fees already collected to fund the Transportation Security Administration (TSA) during shutdowns. The bill would direct the Aviation Passenger Security Fee (initiated after the 9/11 terror attacks) to be used to pay TSA agents during any period that TSA appropriations lapse. Airlines currently charge this passenger fee ($5.60 for a one-way trip and up to $11.20 for a round-trip) for flights that originate in the United States. The bill is not expected to pass due to Republican opposition to carving out funding from the general DHS appropriations bill.

End Special Treatment for Congress at Airports Act of 2026 (S 4123) – Sen. John Cornyn (R-TX) introduced this bill on March 17 as a companion bill reflecting stalled appropriations for DHS – and for TSA workers specifically. The bill calls for a ban on Congressional lawmakers’ current preferential status that enables them to sidestep security checkpoint lines at U.S. airports. The ban would require members of Congress to wait in TSA lines along with other passengers. The bill passed in the Senate on March 19, and its fate now lies with the House.

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Natural Disaster-Proof Your Finances

Natural Disaster-Proof Your FinancesHurricanes, floods, wildfires, tornadoes and earthquakes are becoming more severe and more frequent with each passing year. Without sufficient protection, these events can cause lasting financial disruption. While no one can prevent a natural disaster, preparing your finances in advance is one of the most practical forms of crisis readiness.

Build a Financial Safety Net

Save at least three to six months of essential living expenses in a liquid account that you can access quickly. This money can help cover temporary housing, food, transportation, or medical needs if your income is disrupted or your home becomes uninhabitable.

In addition to emergency savings, keep a small amount of cash on hand (e.g., $200 to $500 in small bills). Be aware that many businesses accept only cash in the immediate aftermath of a disaster, as power outages often disable ATMs and card readers.

Protect Important Documents

Organize key documents and store them in a waterproof file cabinet or container to help you quickly file insurance claims or request disaster assistance. It is a good idea to keep paper copies on hand since power or cellular outages may prevent access to cloud storage online. Other records to keep easily accessible include driver’s licenses, passports, Social Security cards, insurance policies, birth and marriage certificates, and military or medical documents. It is also wise to leave copies with a trusted family member or friend who lives outside your immediate area.

Document Your Home and Belongings

After a disaster, you can speed up insurance claims processing by proving what you owned and its pre-disaster condition. Take photos or videos of every room in your home, including closets, cabinets, and storage areas. Capture serial numbers, brand names, and high-value items. Remember to update this home inventory periodically – especially when you make major purchases. Store the documentation in the same secure location as your important records.

Review and Strengthen Insurance Coverage

You should review your homeowners or renters’ insurance regularly to confirm that coverage amounts reflect current replacement costs. Many times, homeowners and renters discover too late that there are gaps or exclusions in their coverage that will cost them thousands in out-of-pocket expenses. Be aware that standard policies often exclude damage from floods, earthquakes, and in some cases wildfires (although not as broadly excluded), depending on your location. Consider supplemental policies for these conditions if you live in a high-risk area. Also, check to see if your auto insurance covers damage by flooding or debris. Set aside enough money in your emergency savings account to pay for insurance deductibles, and keep your insurer’s contact information and policy numbers stored on your phone for easy access.

Guard Against Fraud and Financial Disruption

Disasters often attract scammers posing as contractors, insurance representatives, or aid organizations. Legitimate disaster assistance programs do not require advance fees, so be wary of anyone requesting upfront payment or your personal financial information. It’s a good idea to enable alerts and multifactor authentication on your banking and investment accounts for extra security.

Plan for Logistics and Communication

Financial preparedness extends beyond money and paperwork. Before a storm or evacuation, fill your vehicle’s gas tank and gather essential supplies, including medications. Charge phones and power banks, and consider portable battery chargers for small devices. Also, create a family communication plan so everyone knows how to check in if normal communication channels fail. Designate an out-of-area contact person who can relay information if local networks are overloaded.

Take Action After the Disaster

If a disaster affects your ability to pay bills, contact lenders and service providers immediately.. Some lenders may add a natural disaster code to your credit report or offer hardship accommodations, which can provide context to other lenders, but they do not automatically prevent credit-score damage. If necessary, register for federal disaster assistance as soon as possible. Timely applications can help cover housing, repairs, and other essential expenses.

Know Your Risk

Finally, understand the climate risks specific to where you live. While certain locations are more appealing, they may come with higher exposure to flooding, fires or storms. Being informed allows you to prepare and make better long-term financial decisions. With organization, preparation, and awareness, you can face emergencies with greater confidence and resilience.

Filing Your 2025 Taxes? Why Accuracy Matters More Than Ever This Year

Filing Your 2025 Taxes?Tax season is here, and while the IRS opened its doors for 2025 returns on Jan. 26, with the familiar April 15 deadline intact, this year’s filing experience is shaping up to be anything but routine. A perfect storm of workforce cuts, rushed new tax breaks, and strained systems means that getting your return right the first time has never been more important.

A Smaller IRS With a Bigger Job

The numbers tell a sobering story. According to the Taxpayer Advocate, the IRS entered this filing season with 27 percent fewer employees than it had just a year ago. Congressional funding clawbacks combined with the Department of Government Efficiency’s push for retirements and reductions have hollowed out the agency’s capacity at nearly every level.

The Treasury Inspector General for Tax Administration warned that the IRS could struggle this year, noting that by Dec. 30, 2025, the agency had managed to onboard only two percent of the employees it was authorized to hire for submission processing. The culprits? New hiring procedures imposed by the Trump Administration and delays stemming from last year’s record 43-day government shutdown.

What does this mean for you? Automated systems will continue handling straightforward electronic returns efficiently. But anything requiring human attention, whether that’s an amended filing, identity verification or a return flagged for errors, will move at a crawl. Phone lines will be even harder to get through than usual, if you can get through at all.

New Deductions, New Confusion

Adding complexity to an already strained system, the One Big Beautiful Bill Act that President Trump signed in July introduced a set of temporary tax breaks that took effect retroactively for 2025. These include deductions for tips, overtime, seniors, and car loan interest, all requiring new forms, schedules and guidance that had to be produced in a hurry.

The potential for mistakes is significant, especially for the 45 percent of filers who prepare their own returns. Most 2025 W2 forms will not break out overtime pay separately, leaving taxpayers to figure it out themselves. And despite the political rhetoric around “no tax on Social Security,” the reality is a larger deduction for seniors that phases out as income rises. Some recipients may not realize they still need to report their benefits as taxable income.

The SALT cap increase from $10,000 to $40,000 is good news for many, but it also means taxpayers should take a fresh look at whether itemizing now makes more sense than claiming the standard deduction.

Direct Deposit or Prepare to Wait

The IRS is pushing hard for electronic refunds, and for good reason. Most error free, electronically filed returns with direct deposit are processed within 21 days. But if you prefer a paper check or accidentally provide incorrect bank account information, expect a much longer wait with fewer staff available to sort out problems.

Returns sent by mail? Plan on six weeks or more. Amended returns are averaging five months or longer, and the IRS is already working through an elevated backlog from prior years.

The Bottom Line

Accuracy matters more than speed this year. The system still works well for straightforward, completely correct returns, but it is far less forgiving when something goes wrong. If you are uncertain about how to handle one of the new deductions or think you might be missing documentation, filing for an automatic extension is a smarter move than submitting a return with errors.

File electronically. Double-check every entry. Use direct deposit. And if your situation is at all complicated, seek out a tax professional who can help you navigate a filing season where the margin for error has never been thinner.

Cloud Sovereignty vs. Big Tech: How Businesses Are Avoiding the ‘AI Lock-in’ Trap in 2026

Cloud SovereigntyArtificial intelligence (AI) is no longer a competitive advantage; it has become a necessary infrastructure. Businesses now heavily rely on AI-powered systems, from automated customer service to predictive analytics and decision-making tools. These platforms are cloud-based, and their reliance comes with growing concern of AI lock-in. This dependence on major cloud providers and the convenience of Big Tech ecosystems can turn into long-term dependency. In response, cloud sovereignty is gaining momentum.

What Is Cloud Sovereignty?

Cloud sovereignty refers to the ability of an organization to maintain full control over its data, infrastructure, and digital assets. This includes where data is stored, how it is processed, and which legal jurisdiction governs it.

Unlike traditional cloud hosting, where companies rely on a single global provider, cloud sovereignty emphasizes:

  • Data ownership and portability
  • Compliance with local laws and regulations
  • Reduced dependence on foreign-controlled infrastructure
  • Strategic control over AI models and workflows

The Rise of Big Tech and the AI Lock-in Problem

Over the past decade, companies like AWS, Google Cloud, and Microsoft Azure have built highly integrated AI ecosystems, especially since the surge of generative AI. These platforms offer powerful tools, including proprietary machine learning services, exclusive Application Programming Interfaces (APIs), pre-trained AI models, and seamless infrastructure scaling.

However, when businesses build their AI systems entirely on one provider’s proprietary tools, switching becomes difficult. Platform dependency can also create serious risks when a vendor fails. A good example is the collapse of Builder.ai, an AI app builder backed by giants like Microsoft and the Qatar Investment Authority. Its collapse was an indicator that companies do not have complete control over the software and data on which their operations depend. This is what is known as AI Lock-in, where:

  • AI models rely on proprietary APIs
  • Data pipelines are optimized for a specific cloud architecture
  • Workflows depend on unique vendor tools
  • Migration costs become prohibitively high

As a result, businesses suffer:

  • Escalating operational costs
  • Limited negotiating power
  • Reduced flexibility
  • Strategic vulnerability

In 2026, with AI deeply embedded into operations, being locked-in can threaten long-term agility and innovation.

Regulatory Pressure is Accelerating the Shift

Governments worldwide are tightening digital sovereignty and data protection rules. From stricter data residency laws to AI governance frameworks, compliance is no longer optional. Industries such as finance, healthcare, and telecommunications face heightened scrutiny. They must prove where data is stored, who can access it, and how AI models are trained and governed. Additionally, businesses can’t afford regulatory risks. Regulations such as the CLOUD Act demand data access transparency, while different states are pushing for data localization policies.

Relying entirely on a foreign-controlled AI ecosystem can raise compliance risks. In some regions, businesses are now required to use local or sovereign cloud providers for sensitive workloads. Gartner predicts 35 percent of countries will adopt region-specific AI platforms by 2027 as countries increase investment in domestic AI stacks to meet sovereignty goals.

Regulation, once seen as a burden, is now a strategic driver pushing companies toward sovereign-first strategies.

How Businesses Are Avoiding AI Lock-in Trap

Businesses are not abandoning cloud AI. Instead, they are becoming more strategic about how they implement it.

  1. Embracing open-source and interoperable AI
    Many businesses are adopting open-source AI frameworks and models to reduce dependency on proprietary systems. By building on interoperable standards, they maintain flexibility to deploy workloads across different environments. This approach allows businesses to experiment freely without being tied to a single vendor’s ecosystem.
  2. Adopting multi-cloud and hybrid strategies
    Rather than relying on one provider, a business can distribute workloads across multiple clouds. This reduces operational risk, strengthens negotiation leverage, enhances flexibility and improves resilience. Hybrid models, where on-premise infrastructure is combined with cloud services, are also growing in popularity. They ensure sensitive data remains locally controlled while still leveraging AI scalability.
  3. Partnering with sovereign or regional cloud providers
    Regional cloud providers are gaining traction as they offer local data hosting, compliance with national regulations, and greater transparency.
  4. Strengthening contract and governance frameworks
    Procurement and legal teams are now playing a more active role in cloud decisions. They negotiate stronger data portability clauses, clear exit strategies, transparent pricing structures, and model ownership rights.

Final Thoughts

In 2026, the real risk is not using AI, but losing control over it.

Cloud sovereignty represents a strategic shift while not rejecting Big Tech. It must be viewed as the ability to act strategically, as no business can dominate every layer of the AI stack due to constraints like the high cost of training advanced AI models.

Businesses that prioritize sovereignty today are building resilient, flexible, and future-ready AI ecosystems. Those who ignore it may find themselves powerful – but trapped.

Understanding Hidden Values

Understanding Hidden ValuesCompanies that have assets on their balance sheet, but the values of those assets aren’t accurately reflected, are considered to have hidden value. As part of an investor’s fundamental analysis of a potential investment, it looks at a company’s financial statements, the state of the macro economy, and the business’ competitive position relative to its industry. It looks at assets’ book value, reflected on the balance sheet, compared to what the market values it on a fair value or market price. The difference between the balance sheet price and the prevailing market value is what may be hidden.

Defining Hidden Value

Common areas where hidden value may be found include natural resources, real estate, a business’ customer base, and inventory. When investors evaluate a project and conduct accurate analysis between the balance sheet’s book value and the hidden value they believe the market will price it to in the future, investors may take advantage of the increase in value through early investing.

Real Estate

When it comes to real estate, by the way of generally accepted accounting principles (GAAP), real estate asset purchases are reported at historical cost. However, real estate values oftentimes rise but are not necessarily reflected on the company’s balance sheet. Since the price is reflected on the balance sheet, minus depreciation, if the real estate’s appraisal sells for at or near the appraised price, the difference shows the potential for hidden value.

Asset Considerations

Regardless of the type of asset, and depending on how the items have been cared for, hidden value may exist in the difference between financial statement value and real-world production capability. Assets that are taken care of impeccably, such as machinery, despite following a depreciation schedule, may have actual value above their reported value. Where intellectual property is involved, the amortization schedule may not reflect the full value if the company uses the IP or licenses it for revenue.

Inventory accounting methods, specifically last-in, first-out (LIFO), can impact hidden value considerations. When inflation is elevated, this method denotes the latest costs to the cost of goods sold. More mature inventory at lower costs is kept on the balance sheet for longer periods. This accounting method reduces the assets’ fair value recorded on the final inventory figure, as well as potentially creating tax benefits by lowering the business’ recorded income.

Customer Loyalty

Businesses that have a strong base of loyal customers often own an undervalued asset of customer loyalty. When customers have established a positive relationship with a company, it can make customers more open to new products or services. By opening an easier reception for future growth, the business creates an asset that’s not completely reflected on the balance sheet.

Conclusion

Regardless of the industry or the type of company, implementing effective accounting analysis and recording is one way to maximize one’s tax obligations and maximize asset value to investors and purchasers. Understanding how to do it is the first step in identifying and strategizing current and future financial plans.

Understanding Qualifying Dispositions

Understanding Qualifying DispositionsWith 57 percent of public companies offering their workers employee stock purchase plans (ESPPs), according to the National Association of Stock Plan Professionals (NASPP), understanding how qualifying dispositions work is an essential skill.

The concept refers to someone selling or otherwise “disposing” of equities who sees advantageous tax benefits. This is especially pronounced when a stockholder’s normal tax income rate differs markedly from prevailing tax rates for long-term investments.

Eligible individuals are those employed by a company that offers such a benefit. There are two different options available for worker participation.

The first option is where employees participate in the ESPP. The second option is through an incentive stock option plan (ISOs). It’s noteworthy to distinguish that the ESPP is for most employees employed after a particular time at a company. However, ISOs are reserved primarily for senior management and executives, such as chief financial officers (CFOs), chief executive officers (CEOs), etc.  

What determines if it’s a qualifying disposition is how long the employee keeps the equities prior to the sale.

ESPP Example

If 100 shares are acquired via ESPP, bought via a 10 percent discount to the prevailing offer of $40, the purchase of 100 shares of stock at $36 equals $3,600. If the stock appreciates to $60 in the future, the difference (and capital gain) would be $2,400 in profits ($6,000 – $3,600).

Qualifying Disposition Example

This scenario breaks down how the discount and, ultimately, how capital gains are treated.

The discount of $4 per share is taxed at the employee’s present wage rate. Depending on the tax rate the employee is taxed at, the liability would be ($4 a share, multiplied by 100, times the tax rate of 30 percent or $120).

Using the ESPP example’s figures, the long-term gain of $24 per share (times 100 shares) is taxed based on the lesser rate of say 15 percent. ($3.60/share times 100 = $360).

Therefore, the entire taxes owed end up being $120 + $360 = $480.

Non-Qualifying Disposition Example

However, for stock liquidations not meeting qualifying disposition criteria, the $2,400 would see a 35 percent capital gains tax ($2,400 multiplied by 35 percent = $840).

Based on the qualifying versus non-qualifying distribution scenarios, the difference of $360 in capital gains savings represents a stark contrast in tax obligations. Therefore, it’s important to determine how to meet a qualifying disposition.

It requires the following criteria to be met. The stock sale date must occur at a minimum of 12 months from the stock purchase date. It also must be held for at least 24 months from the ESPP offer date or the ISO stock warrant date.

While transactions may differ in the quantity of shares sold and for how much, the timing for workers selling the shares is far less variable. It is important for employers to ensure workers are familiar with the tax implications.

 

Sources

https://www.naspp.com/blog/five-trends-in-espps

Burying Time Capsules, Ending Payments to Dead People, and Safeguarding Voting Rights for U.S. Citizens

Burying Time Capsules, Ending Payments to Dead People, and Safeguarding Voting Rights for U.S. Citizens

Disapproving the action of the District of Columbia Council in approving the DC Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025 (HJRes 142) – After passage of the One Big Beautiful Bill Act, the Council of the District of Columbia (DC) opted out of the tax code from the Act, amending several provisions and restoring the DC child tax credit. This resolution nullifies DC’s amended legislation. It was introduced on Jan. 22 by Rep. Brandon Gill (R-TX). It passed in the House on Feb. 4, the Senate on Feb. 12, and was enacted on Feb. 18.

Semiquincentennial Congressional Time Capsule Act (S 3705) – This bill instructs the Architect of the Capitol to bury a time capsule in the Capitol Visitor Center (on or before July 4, 2026) as part of this year’s 250th anniversary celebration of the nation’s founding. The purpose of the capsule is to represent legislative milestones to date via a joint letter to the future Congress by the majority and minority leaders of the Senate and the House. The time capsule is meant to remain there until July 4, 2276, the nation’s 500th anniversary. The legislation was introduced by Sen. Thom Tillis (R-NC) on Jan. 27. It passed the Senate on Jan. 27, the House on Feb. 9, and was signed into law by the president on Feb. 18.

Bankruptcy Administration Improvement Act of 2025 (S 3424) – This Act was introduced by Rep. Christopher Coons (D-DE) on Dec. 10, 2025, and passed in the Senate on the same day. It cleared the House on Jan. 12 and was signed into law on Feb. 6. The bill makes alterations to the administration of bankruptcy cases by increasing fees paid to trustees in Chapter 7 (liquidation) cases, and extends by five years the fees paid to trustees in Chapter 11 (reorganization) cases. It also extends the term of bankruptcy judgeships in various districts, as well as other provisions.

Ending Improper Payments to Deceased People Act (S 269) – This legislation requires the Social Security Administration (SSA) to share its death records with the Treasury Department in order to prevent improper payments to deceased individuals. In the past, this bill had to be extended every three years, but the new bill makes the requirement permanent. The bill was introduced by Sen. John Kennedy (R-TN) on Jan. 28, 2025. It passed unanimously in the Senate on Sept. 19, 2025, cleared the House on Jan. 13, and was enacted on Feb. 10.

Safeguard American Voter Eligibility Act (S 1383) – This controversial voting bill passed in the House on Feb. 11. The Republicans in the Senate have secured 50 votes for passage, but the bill requires 60. The provisions in the current bill include requiring:

  • Each state is to submit full voter rolls to the Department of Homeland Security (DHS) for verification of citizenship via its SAVE system, which has historically had a high error rate of flagging citizens as non-citizens.
  • Voter roll purges every 30 days and end the 90-day quiet period that allows voters mistakenly purged time to re-register before Election Day.
  • New or changing voter registrants to show proof of U.S. citizenship (birth certificate or passport; five states already meet this requirement for a Real ID driver’s license).
  • Voters to show photo ID at polls in order to vote (38 states already require this)
  • A ban on automatically mailing ballots to all voters (currently used by eight states and DC); voters would have to send individual requests to receive a mail ballot.

Democrats in the Senate have vowed to block passage via filibuster.

 

The Value of Diversifying with International Stocks

The Value of Diversifying with International StocksWhen investors think about building a strong equity portfolio, U.S. stocks often dominate the conversation. The United States is home to many of the world’s most innovative, profitable, and well-known companies, and has a history of delivering strong long-term returns. However, the United States is not the only country with successful, growth-oriented businesses. In fact, nearly half of the global equity market is located outside the United States, offering investors a much broader opportunity than in domestic markets alone.

Despite this reality, many investors stick to a home country bias. This behavioral tendency means they prefer companies headquartered in their own country because they’re more familiar and feel safer. Unfortunately, home country bias can unintentionally increase portfolio risk. A singular concentration of investments in one geographic region exposes investors to country-specific economic cycles, policy changes, and market disruptions, while limiting access to attractive opportunities elsewhere in the world.

Global investing offers the following benefits:

  • Overall Diversification – Spreading investments across different markets, sectors, industries, companies and currencies in various countries improves opportunities for higher growth potential while balancing risk.
  • Highly Regarded Brand Names – Investing internationally offers access to a larger universe of well-established global brands. Household names such as Toyota, Nestlé, and Samsung are headquartered outside the United States, yet they generate revenues throughout the world, boasting strong balance sheets, consistent cash flow, and favorable long-term prospects. International stocks offer investors exposure to global innovation and consumption trends beyond U.S. markets.
  • Sector Diversification – In recent years, the U.S. stock market has become saturated with information technology and related industries – even among broad market index funds. While tech is a powerful growth driver, this concentration increases portfolio risk if the sector underperforms. International markets tend to have greater representation in other sectors, such as industrials, financials, materials, and consumer staples, so adding international stocks can help diversify overall sector exposure.
  • Currency Diversification – International investing exposes U.S. investors to foreign currencies, which reflect the economic conditions of their respective countries. Because currencies do not always move in tandem, holding assets denominated in multiple currencies can help reduce overall portfolio volatility. For example, if the U.S. dollar weakens, gains from foreign currencies may partially offset losses in U.S. dollar-denominated investments. While currency movements can add risk in the short term, they may provide an additional layer of diversification over the long term.
  • Country Diversification – International investing extends beyond developed markets to include emerging economies around the globe. Emerging markets are countries experiencing rapid economic growth, industrialization, and rising household incomes. Examples include India, Brazil, South Korea, and Taiwan. While emerging markets can offer higher growth potential, they also tend to be more volatile. For this reason, investors should consider allocating only a modest portion of their international exposure to emerging markets as part of a diversified strategy.

Diversify Risk Via Your Investment Vehicle

While international stocks offer diversification and growth potential, they also come with distinct risks, including regulatory differences, lower market liquidity, and political instability. Also note that international investments may involve higher transaction costs compared to domestic securities, especially when purchasing individual foreign stocks

Investors can help mitigate these risks by choosing inherently diversified investment vehicles, such as international mutual funds and exchange-traded funds (ETFs). Broad index-tracking funds are often the most cost-effective way to gain exposure, while professionally managed mutual funds can actively navigate changing global conditions.

International stocks provide access to companies, markets, and currencies that cannot be reached through domestic investments alone. When thoughtfully integrated into a portfolio, they may enhance diversification and improve long-term risk-adjusted returns.