Tax reform spurs growth of ESOPs to finance growth, reward employees

Article Abstract:

There are several post-tax reform benefits associated with employee stock ownership plans (ESOPs), especially for financial officers looking for new corporate financing vehicles. New ESOP tax advantages resulting from the Tax Reform Act of 1986 include: employer ability to deduct ESOP dividends not yet allocated to participants that are used to repay ESOP loans; and financial institutions' ability to apply the 50 percent interest exclusion to all funds loaned to an ESOP employer. ESOPs remain primarily an employee benefit mechanism that gives workers a chance to build retirement income through employer stock. The main distinction between ESOPs and other retirement plans is that they give workers an ownership interest. A 1986 US General Accounting Office study shows that about 4,800 ESOPs now exist.

Taxation, Employee ownership

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How to get the most out of your accounting firm

Article Abstract:

Accounting firms do more than audit and calculate taxes; they also offer advice on systems management, cost control, and cash flow. Accounting firms are especially well equipped to help companies change accounting practices to comply with the Tax Reform Act of 1986. Accounting firms can also bring objectivity to client projects, which can be invaluable in making decisions or spotting problems. When an accounting firm is engaged, the tasks to be undertaken should be clearly stated, deadlines set, and fees established.

Analysis, Services, Accountants, Business consultants, Management consultants

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