Blog – Page 5 – Bharti Sudan CPA

Understanding The Q Ratio

When it comes to evaluating a business, there are many ways to perform a valuation. One way to do so is to use the Q Ratio. Known as Tobin’s Q Ratio or simply the Q Ratio, this method looks at the proportion between the values of a physical asset and its replacement cost. Developed by Nobel laureate economist James Tobin, this ratio presumes a single company; for public investors, if asset values can be estimated, the company’s market value of a publicly traded company may be approximately estimated.

The original formula is as follows:

Q Ratio = Market Value of Assets / Replacement Cost of Capital

While this formula is the original iteration, approximating an asset’s replacement value is complicated and oftentimes not 100 percent realistic to analyze. The more realistic way it’s calculated is by using book values in lieu of the asset’s replacement costs. The new way to calculate it is as follows:

Q Ratio = (Equity Market Value + Liabilities’ Market Value) / (Equity Book Value + Liabilities’ Market Value)

When it comes to calculating the overall market’s Q Ratio:

Q Ratio = Value of the Stock Market / Corporate Net Worth

Putting the Q Ratio in Practice

Essentially, it’s used to value a company. Once calculated, the Q Ratio provides internal stakeholders and outside investors with one way to evaluate a company.

Above 1

If the Q Ratio is more than 1, the business’ market value is higher than its booked assets. It means a company’s valuation is overestimated in the eyes of the market since there is some portion of the company’s assets that are either not documented or valued fully. When the Q Ratio is above 1, a business’ earnings are worth more than replacement costs for the assets. At this level, entrepreneurs are incentivized to develop a competitor business to gain market share and financial gain.

Equal to 1

When the Q Ratio equals 1, it implies the market sees the company’s assets as valued fairly.

Below 1

At this level, a business’ assets are worth more than fair market value, establishing the business as undervalued. Investors with enough assets can purchase the company in question, either via shares if publicly traded or outright if a private company, versus trying to create a competitor company to siphon value away from it.

Further Consideration

When it comes to the calculated Q Ratio, it’s important to keep it in context. While accountants can be precise with many things during preparation, when it comes to market forces and intangible assets, analysts need to use their judgment. Investors and market forces can create hyperbole for a business’ value that can’t be quantified and recorded by accountants. Stock analysts’ perspectives on a business’ prospects or rumors regarding future performance can modulate the present, dynamic valuation of the company.

Another consideration is how to document and gauge intangible assets like intellectual property and goodwill. While accountants can approximate IP or goodwill, it’s not an exact science.

Thus, when businesses use the Q Ratio to value their own company or one they consider purchasing, investors must take the Q Ratio as part of a holistic valuation approach.

The Hidden Tax Trap Keeping America’s Housing Market Frozen

America’s housing crisis has reached a breaking point. With median home prices soaring past $400,000, the National Association of Home Builders reports that 60 percent of U.S. households can’t even afford a $300,000 home. The math has become impossible for most American families.

While we often blame high mortgage rates, restrictive zoning laws and rising construction costs for the housing shortage, there’s another culprit hiding in plain sight: a decades-old tax rule that’s trapping millions of homeowners in houses they’d rather leave.

The $500,000 Problem

When Congress overhauled capital gains taxes on home sales in 1997, they created what seemed like a generous benefit: homeowners could exclude up to $250,000 in profits from taxes ($500,000 for married couples) when selling their primary residence. This replaced a complex system of rollovers and age-based exemptions with something simpler and cleaner.

But Congress made one critical mistake – they never adjusted these limits for inflation or housing price growth.

Nearly three decades later, these same dollar amounts remain frozen in time, even as home values have skyrocketed. According to new research from Moody’s Analytics, if the exclusion had kept pace with home prices, it would now stand at $885,000 for singles and $1,775,000 for couples. Even adjusting for general inflation alone would double today’s limits.

The Senior Squeeze

This outdated tax rule hits empty-nesters particularly hard. Consider this: nearly 6 million households headed by seniors live in homes larger than 2,500 square feet. Many would gladly downsize to something more manageable, but selling could trigger six-figure tax bills on homes they’ve owned for decades.

The result? They stay put, waiting until death when their heirs can inherit the property with a stepped-up basis that erases all capital gains. Meanwhile, these oversized homes remain off the market, unavailable to growing families who desperately need the space.

Moody’s Analytics estimates these “overhoused” seniors spend $3,000 to $5,000 more annually on maintenance, utilities and property taxes than they would in smaller homes – adding up to $20 billion to 30 billion in unnecessary costs nationwide each year.

An Unexpected Burden on the Middle Class

Surprisingly, this tax burden doesn’t primarily affect the wealthy. Middle-class homeowners in expensive markets like California and Massachusetts face steep tax bills despite modest incomes. Widows face their own challenges, having just two years after a spouse’s death to sell while maintaining the full $500,000 exclusion (though they do receive a partial step-up in basis on their late spouse’s share).

An IRS study revealed a startling fact: 20 percent to 25 percent of capital gains taxes collected under current rules come from filers earning less than $20,000 annually. Meanwhile, wealthier homeowners often have the resources and flexibility to structure sales strategically, minimizing their tax exposure.

The Housing Market Ripple Effect

This tax trap creates a cascade of problems. Young families remain stuck in starter homes. First-time buyers face even fiercer competition for limited inventory. Labor mobility suffers as workers can’t relocate to areas with better job opportunities. The entire housing ecosystem becomes frozen.

The shortage is stark: monthly active listings only climbed back above 1 million in May, according to realtor.com. Before the pandemic, that number hadn’t dropped below that threshold since at least 2016.

Solutions on the Table

Congress is considering two approaches to break this logjam. One would be to double the current exclusions and index them to inflation going forward. The more radical proposal would eliminate the cap entirely.

The Double-Edged Sword

Any change comes with risks. Moody’s Analytics warns that while updating these limits could unlock hundreds of thousands of homes and boost inventory, it might also intensify competition at the lower end of the market as downsizing seniors compete with first-time buyers for the same properties. It could also make housing an even more attractive tax shelter, which would ultimately drive prices higher.

The Path Forward

The paradox is clear: raising or eliminating the capital gains exclusion could provide immediate relief to millions of homeowners trapped by tax considerations. It could inject a much-needed supply into a starved market. But without careful implementation, it could just as easily fuel another round of price increases, leaving affordability as elusive as ever.

Controversial Defense Funding Bill, Shoring Up ESOP Plans, and Leave Benefits for Public Health Personnel

National Defense Authorization Act for Fiscal Year 2026 (S 2296) – Introduced by Sen. Roger Wicker (R-MS) on July 15, the Senate passed this legislation on Oct. 9. The bill is a carve-out of the 2026 budget bill intended to fund military appropriations for the 2025-2026 fiscal year. The bill was largely supported by Republicans but less so by Democrats, who are in favor of keeping the government closed until all of their budget concerns are addressed. In addition to establishing funding and policies for military and defense-related activities, the bill includes a roadmap for bomber modernization, a real-time database for contractor compliance oversight, and authorizing programs for nuclear weapons facilities. The legislation would authorize $32.1 billion over the President’s budget request, and the White House opposes provisions in the bill that thwart the President’s ability to control immigration and conduct foreign affairs, including submitting plans to Congress ahead of actions, dictating the terms of intelligence support to Ukraine, and enabling the Defense Department to bypass the Administration’s tariffs. The bill currently rests with the House, which asserts it will not return to regular session until the Senate passes the current controversial CR budget bill.

Employee Ownership Representation Act of 2025 (S 1728) – This bipartisan bill seeks to expand the membership of the Advisory Council on Employee Welfare and Pension Benefit Plans to include two representatives of employee ownership organizations. While the council presently includes 15 members from business, labor, and the public, the council has no expertise specific to Employee Stock Ownership Plans (ESOPs). The legislation was introduced by Sen. Bill Cassidy (R-LA) on May 13 and passed in the Senate on Oct. 9. It currently awaits consideration by the House.

Retire Through Ownership Act (S 2403) – The main purpose of this bill is to provide a clear definition for certain closely held stock that aligns valuations with IRS standards in an effort to mitigate valuation risk for ESOPs. It would also provide “safe harbor” for trustees relying on these guidelines. The Act was introduced by Sen. Roger Marshall (R-KS) on July 23. It passed in the Senate on Oct. 9 and currently lies with the House.

Uniformed Services Leave Parity Act (S 1440) – Introduced by Sen. Tammy Duckworth (D-IL) on April 10, this legislation would authorize leave benefits (parental leave, emergency leave) to Public Health Service (PHS) officers. The bill sponsors assert that the current lack of these important benefits is a challenge to recruiting and retaining PHS personnel, who should be on par with the same benefits offered to uniformed service members. The bill passed in the Senate on Oct. 9 and is up for review in the House.

Internal Revenue Service Math and Taxpayer Help Act (HR 998) – This bill was introduced on Feb. 5 by Rep. Randy Feenstra (R-IA). Among other provisions, it instructs the IRS to provide taxpayers with details of notices that relate to a math or clerical error. The bill passed in the House on March 31 and in the Senate on Oct. 20. It currently awaits the President’s signature to become law.

The Silent Threat: How Simple Misconfigurations Are Fueling 2025 Worst Cyberattacks

As organizations invest heavily in next-gen firewalls, AI detection, and threat intelligence, grave cyberattacks have been reported as a result of overlooked misconfigurations. According to the latest statistics, about 23 percent of cloud security incidents are directly connected to misconfigurations. These missteps create easy entry points for cybercriminals that may lead to data breaches, ransomware demands, and financial loss.

What are Misconfigurations?

Misconfigurations are overlooked errors in system setups that create vulnerabilities without the need for hackers to apply advanced hacking techniques. These silent threats are human-driven oversights when configuring software, hardware, or cloud services. Good examples include improperly set permissions in cloud storage, insecure API keys left in code repositories, inadequate security monitoring, and unsecured access points like IoT devices with default passwords.

These issues arise from human error, which accounts for 82 percent of misconfigurations. This is also compounded by today’s cloud era, where businesses depend on cloud platforms, software as a service stacks (SaaS), and AI-driven infrastructure. Many organizations now use multiple providers, and this makes configurations challenging. Rushed deployment also adds to the misconfiguration problem, especially when a thorough audit is not conducted. Unlike malware or phishing scams, misconfigurations remain undetected until exploited.

2025’s Worst Cyberattacks Fueled by Misconfigurations

This year alone, there has been a surge in incidents related to misconfiguration, which is alarming. There were more than 9.5 million cyberattacks in the first half of the year. A good example is the Coinbase breach of May 2025, in which data from more than 70,000 customer records was stolen. This breach is attributed to insider threats exploiting misconfigured permissions.

Recently, cybersecurity researchers revealed a botnet campaign that exploited misconfigured DNS sender policy framework (SPF) records across 20,000 domains and compromised more than 13,000 MikroTik routers. This enabled large-scale spam and spoofing attacks.

In many regions, misconfigured VPN gateways and remote access tools have also contributed to ransomware campaigns. This is through attackers bypassing perimeter defenses by exploiting a misconfigured VPN portal.

IoT weaknesses have also seen entire networks of smart devices compromised, simply because administrators did not change the default login credentials. The entry points ranged from security cameras to industrial sensors, allowing attackers to access more sensitive corporate systems.

Why Organizations Keep Making the Same Mistakes

Talent shortage – Many IT teams are stretched and lack sufficient experts to catch every misstep.
False confidence in automation – While automated tools are a great help, they are not foolproof. Overreliance on these tools and having a set-and-forget mindset can leave room for security breaches.
Velocity over security – This happens when rapid delivery of product features overshadows the slower discipline of security reviews.
Siloed responsibility – In many organizations, security is delegated to a separate team instead of being embedded across different units like the development, operations, and business units.
Awareness gap – Many teams underestimate how a single overlooked setting, like an open test environment, can escalate into a full-scale breach.

Prevention Strategies and Best Practices

Fortunately, misconfigurations are one of the preventable causes of security breaches. Preventing misconfigurations requires proactive measures that include:

Continuous auditing and testing – It is crucial to ensure regular audits and testing of automated tools for configuration management to detect and reduce the window of exposure.
Adopt zero-trust models – No device or user should be trusted by default; grant only minimum access where required.
Strengthen access controls – Always change default device credentials, partition networks, and enforce MFA across all accounts.
Automated detection tools – Use cloud security posture management, compliance-as-code, and drift detection to catch misconfigurations in real time.
Cross-functional training and culture – Employee training is vital, as human error accounts for 82 percent of incidents. Security literacy should extend to both technical and non-technical teams.
Follow industry guidelines – Align with recognized security frameworks (NIST, ISO, CIS) and CISA’s published guidance on the Top Ten Cybersecurity Misconfigurations. For example, avoid using default configurations, enforce patch management, and properly segment networks.
Incident response readiness – Have a well-drilled response playbook to ensure minor disruption in case the defenses fail.

Conclusion

Simple misconfiguration remains a silent enabler of devastating cyberattacks through avoidable errors. Business owners must prioritize configuration hygiene to build resilient digital infrastructures and protect against future threats.

It is a clear lesson that cybersecurity doesn’t always depend on battling sophisticated hackers but rather ensuring they don’t get an easy way in.

How to Save Money with the Half Rule

What if you could lower your grocery bill without giving up the things you love, fight inflation, and have some money left at the end of the month? Sounds too good to be true? It’s not. It’s the Half Rule. This means cutting the amount of product you use in half and seeing what happens.

Truth is, most of us probably use too much of the things we love. Here are several reasons why:

Manufacturers often ask you to use more of the product than you need.
You’ve probably gotten used to using a certain amount of a product;
And finally, product inflation. Specifically, you might think that if you get pleasure out of something, you might need to use more of it. For instance, why get a tall vanilla latte when you can get a grande, right? But ask yourself: Is it really that much better?

To this end, here are some things you can easily use half of and never miss the other half:

Shampoo. Try using half the amount and adding more water, especially if it’s concentrated.
Laundry detergent. Try a half cup. A little goes a long way, especially if it’s a small load.
Dryer sheets. These are so easy to tear in half.
Cooking oil. Use an oil mister instead of pouring it into your pan or skillet.
Restaurant meals. Eat half or a third and save the rest for another meal. Or better yet, split a meal with your partner, friend or work colleague. Bonus: you’ll also save calories.
Bagels. Just eat half! Save the other half for your next snack or breakfast.
Starbucks order. Try a tall. Or if you get a vente, try a grande. Give it a whirl. See what happens.
Glass stovetop cleaner. If you use less, you might have fewer streaks.
Tape. When you’re wrapping gifts, give string a try.

When you change a few things here and there, over time, you’ll really see the difference in your bank account. Also, imagine how nice it’ll feel not to have to buy these items so often. That’s a big change in spending.

The Half Rule is not for everything. While it works on so many things, there are some things you cannot to apply it to – like filling up your gas tank or cutting a prescription in half. Never do that.

Overall, it’s a good rule. And when you’re persistent over time, you’ll start to develop a habit – one that will help you see a difference quickly and save you money in the long run. It’s a ripple effect that might expand into other areas of your life. In sum, the Half Rule is so effective, you just might go all in – and stay there.

Sources

“The Half Rule” – A Frugal Hack I Live By

Ideas for Small Business Succession Planning

It can be hard to build up your own business, but it can be harder to sell it for what it’s worth. In fact, only around three in 10 family-owned businesses survive for the next generation. Whether family-owned or in a partnership of non-family owners, business succession is no easy feat.

Succession Planning

It is very important to have a succession plan, even if the business is fairly new. That’s because it gives heirs a roadmap for what to do if the owner dies unexpectedly. The first step is to figure out who you want to run the business after you. If you want to pass it on to one or more family members, be sure to ask if they’d like to own it. Note that the family route may need to be considered a year or more before the transfer to ensure the successive owner has time to learn the ropes.

If you decide to sell the business to a third party, consider if you want to sell it outright or retain partial ownership and continue to get a share of the profits. Also, think about whether or not you want to participate in running the business once ownership changes hands.

Business Owner Partners

In the case of a shared business, a succession plan can help clarify the intent of both owners and provide a legal path of succession if one owner dies. In a worst-case scenario, instead of the surviving partner taking the reins to run the business on his own, he may end up having to run it alongside the deceased owner’s spouse, who might not possess the skills, experience, or proclivity for the business. Or maybe the surviving spouse decides not to sell the business but receive a share of the profits without doing any work.

Key Man Insurance

If the surviving owner would simply like to buy out the deceased owner’s interest in the business, there are certain financial strategies available in the event he doesn’t have the assets to do so. One vehicle is called key man insurance, which refers to policies paid for by the business to cover the death of the business owner. Death proceeds are specifically earmarked to keep the business operating upon the death of the owner.

Buy-Sell Agreement with Life Insurance

A succession plan that includes a Buy-Sell Agreement contract specifies what will happen to the business shares of the owner upon his death. In most cases, the surviving business partner will use the life insurance proceeds to buy the shares at a predetermined value, which ensures that the deceased’s family is adequately paid for his share of the business upon his death.

Family-Owned Business

In the case of a family-owned business, a family member who is active in the business may take out an insurance policy on the owner and use the proceeds to buy out the interests of the non-active family members after the owner dies.

Private Annuity

Another option is a private annuity, in which the owner sells his business to his children in exchange for a fixed annuity income, based on IRS interest rates, for the rest of the owner’s life and, if elected, that of his spouse. If the owner outlives his life expectancy, the children may end up paying him more than the business is worth. However, if the owner dies sooner, they may pay less than the business is worth.

Family Limited Partnership

With a family limited partnership, the business owner transfers some or all of his business to individual family members while he is alive. When the owner dies, the portion of the business that has been transferred is no longer considered a part of the owner’s estate and is therefore not subject to estate taxes.

Seller Financing

If the owner has trouble selling the business to a third party, including perhaps a valuable employee who would like to take over, consider a seller financing agreement. Instead of paying the owner a lump sum, the buyer pays him a fixed, regular payment over a set number of years. Future business revenue secures the note, and the current owner would be qualified to know how well business revenues might hold up under the new ownership. Some sellers set up a finance agreement for just five years or so, after which time the buyer is expected to qualify to refinance with a conventional loan. It’s also possible for the financier to sell the new owner’s note if he decides down the road to get out of the financing role. The good news is that, should the buyer default on the loan, the seller would still own the company.

Understanding Contribution Margin After Marketing

Contribution margin after marketing (CMAM) measures how much money is generated per unit retailed after factoring in a company’s variable costs, along with marketing costs.

It’s analogous with contribution margin, however, a business must factor in marketing costs the company experiences when publicizing a good to likely consumers with details on the business’ wares. This metric determines how well net sales can satisfy expense obligations and what percentage of net sales may remain to satisfy fixed expenses.

Comparing Variable Versus Fixed Costs

Variable costs, as the name implies, are expenses that rise and fall according to output quantities. Fixed costs, conversely, are expenses that don’t change despite variation of production quantities. Understanding these concepts is helpful when calculating CMAM to see how both types of expenses impact the different calculations.

CMAM = Sales Revenue – Variable Costs – Marketing Expense

It can also be determined on a per-unit basis to help a business understand how a single product unit contributes to the company’s comprehensive profits. One can calculate the CMPU (contribution margin per unit) as follows to provide a more granular analysis:

CMAM/Unit = Sales Revenue/Unit – Variable Expenses/Unit – Marketing Expense/Unit

What separates variable costs (including marketing expenses) from the sales revenue is CMAM. The balance is profit along with fixed costs. To calculate if a business saw a net loss or profit, the formula is:

Net Operating Profit = CMAM – fixed costs

If a profit is reported after subtracting variable costs, costs to market, plus fixed costs, it means a business or specific department is profitable. If it’s negative, the business sees a loss that won’t enable it to pay its bills.

Illustrating CMAM

When it comes to a company producing widgets, the following is already known. Variable costs for production for a single widget are detailed below:

$2.25 for unprocessed inputs
$1.80 firsthand production expenses
$0.50 power
$0.40 freight expenses
$4,500 business equipment rentals
$6,000 factory rent
$30,000 management salary
$10,000 marketing costs

Each widget costs $10, and the business sold 30,000 last year. Therefore, it’s calculated as follows:

CMAM = Sales Revenue – Variable Costs – Marketing Expense

Sales Revenue = $10 x 30,000 = $300,000

Variable Costs = ($2.25 + $1.80 + $0.50+ $0.40) x 30,000 = $4.95 x 30,000 = $148,500

CMAM = $300,000 = $148,500

The next step is to calculate net operating loss or profit: we take CMAM ($148,500), then subtract fixed costs:

$148,500 – ($4,500 + $6,000 + $30,000)

$148,500 – $40,500 = $108,000

Based on that calculation, the company producing widgets realized $108,000 for its net operating profit last year. The next section will discuss how businesses can use this information to improve their operations.

Using CMAM for Business Analysis

Managers use this metric to determine the viability of a product. If there are multiple iterations or options of a product, it can help managers determine which product sells the best and rank them if there are multiple versions of a widget. Businesses can analyze each unit’s contribution margin for each version of a widget to determine which versions provide the greatest option for profitability. Depending on the outcome, the company may choose to produce only the most profitable one or two widgets.

When it comes to the CMAM, businesses that use it for analysis can increase their sales efficiency for the present and future.

Initial Look at the New Tax Form Schedule 1-A: Four Key Deductions for 2025

The IRS has released draft Schedule 1-A, introducing four new temporary deductions within the One Big Beautiful Bill Act. If you are wondering what the new form looks like and how the calculations work, read on as we explore each below.

Modified Adjusted Gross Income (MAGI)

It is important to note that all four deductions require calculating your MAGI first, which determines eligibility and phaseout amounts for each deduction.

The Four New Deductions and How the Calculations Work

These deductions are all referred to on the schedule by their colloquial names, for example: “No Tax on Tips,” “No Tax on Overtime” and “No Tax on Car Loan Interest.” The sole exception, however, is popularly referred to as the “No Tax on Social Security” provision, which is called the “Enhanced Deduction for Seniors” on the form.

1. Tips Deduction

Maximum: $25,000 annually
Eligibility: Must receive qualified tips in customarily tipped occupations
Phaseout: Begins at $150,000 MAGI ($300,000 joint filers)
Rate: $100 reduction per $1,000 over threshold
Requirements: Valid Social Security number; married couples must file jointly

2. Overtime Deduction

Maximum: $12,500 single ($25,000 joint filers)
Eligibility: Only the premium portion of overtime pay (the “half” of time-and-a-half)
Phaseout: Same as tips deduction – begins at $150,000 MAGI
Rate: $100 reduction per $1,000 over threshold

3. Car Interest Deduction

Maximum: $10,000 annually
Eligibility: Interest on loans for new vehicles under 14,000 pounds and assembled in the United States
Phaseout: Begins at $100,000 MAGI ($200,000 joint filers)
Rate: $200 reduction per $1,000 over threshold
Requirements: Must provide VIN; loan must originate after Dec. 31, 2024

4. Enhanced Deduction for Seniors

Amount: $6,000 fixed deduction
Eligibility: All taxpayers (replaces “No Tax on Social Security” promise)
Phaseout: Begins at $75,000 MAGI ($150,000 joint filers)
Rate: 6 percent reduction of excess income over threshold

Key Points to Remember

All deductions are available whether you itemize or take the standard deduction
All require valid Social Security numbers
Married couples must file jointly to claim these benefits
Income limits mean higher earners receive reduced or no benefits
These are deductions, not exclusions – income is still reportable for state/local taxes

Final Steps

After you have calculated everything applicable for the four possible deductions, you will enter the total on the new line 13b on Form 1040. The total amount of the deductions entered here is removed from your income prior to calculating your tax. Remember, these are deductions and not credits, so they only reduce your taxable income and are not a direct reduction in your tax due.

You can see an example of the new draft Form 1040 illustrating this below.

Screenshot of new Form 1040

Conclusion and Draft from Status – and IRS Warning

The above provides guidance to taxpayers and professionals on how both the deductions calculations work and flow through Form 1040. The IRS warns, however, that the forms and instructions currently released are in draft form at this point. Before any forms or instructions can be released in their final state, they need to be approved by the OMB. It is not unusual for draft releases of instructions and publications to have some changes before their final release, even if only minor.

Enhancing Homebuyer Protections, Wildfire Risks, 911 Response and Domestic Manufacturing

Homebuyers Privacy Protection Act (HR 2808) – Introduced by Rep. John Rose (R-TN) on April 10, the House passed this bill on June 23, and the Senate passed it on Aug. 2. Signed into law on Sept. 5, this bipartisan bill prohibits a consumer reporting agency from selling a mortgage applicant’s personal information to other lenders without their explicit consent. The legislation is designed to safeguard homebuyers’ personal financial information and eliminate the frequent bombardment of other lender marketing offers during the financing process underway with the applicant’s existing lender.

SUPPORT for Patients and Communities Reauthorization Act of 2025 (HR 2483) – This bill renews billions of dollars in federal funding for programs responsible for preventing overdoses and further strengthening treatment and recovery services. The renewal of funds to nationwide county programs is timely, given the current behavioral health and substance abuse disorder crises. The bill was introduced by Rep. Brett Guthrie (R-KY) on March 31, passed in the House on June 4 and in the Senate on Sept. 18; it currently awaits signature by the president.

TRAVEL Act of 2025 (HR 3400) – Also known as the Territorial Response and Access to Veterans’ Essential Lifecare Act, the purpose of this bill is to enable VA physicians and specialists to travel to hard-to-reach areas in U.S. territories for up to one year. The Act is designed to help fill critical gaps in VA medical services across the Pacific territories by compensating providers with travel bonuses. The legislation was introduced by Representative Kimberlyn King-Hinds (R-Northern Mariana Islands) on May 14. It passed in the House on Sept. 15 and currently lies with the Senate.

Fire Ready Nation Act of 2025 (S 306) – Introduced by Sen. Maria Cantwell (D-WA) on Jan. 29, this legislation would establish a fire weather program at the National Oceanic and Atmospheric Administration (NOAA). The new program would enable scientists to better predict wildfires, fire weather, and fire risk via forecasting, detection, and modeling, as well as respond quickly to prevent devastation to families, homes, and businesses due to wildfires. The legislation was passed in the Senate on Sept. 10 and is now under review in the House.

Enhancing First Response Act (S 725) – This bill was introduced on Feb. 25 by Sen. Amy Klobuchar (D-MN) and passed in the Senate on Sept. 10. The law would reclassify 911 dispatchers as public safety workers from their current role as office and administrative support in the federal Standard Occupational Classification system. In addition, the bill contains provisions to improve access to the 911 call system during major disasters and make the system more resilient against outages and disruptions. The fate of this bipartisan bill now rests in the House.

National Manufacturing Advisory Council Act (S 433) – This Act was introduced by Sen. Gary Peters (D-MI) on Feb. 5. It seeks to establish a working group of representatives from industry, labor, and academia to advise Congress on policies and programs to enhance domestic manufacturing despite the challenges of global competition, U.S. supply chain issues, and the current tariff solution. The bipartisan legislationwas passed unanimously in the Senate on July 14 and is currently under review in the House.

Beyond the Hype: A Strategic Blueprint for AI Investment in 2025 and Beyond

Artificial intelligence (AI) is one of the most talked-about technologies today. It has taken a shift from the broad general-purpose tools to specialized innovations that promise real impact. AI is dominating headlines with investor pitches. There has also been a surge in startups promising AI-powered solutions. However, some businesses have already adopted and invested millions into AI projects with little return. As AI advances, business owners and investors need to stop chasing the latest headlines and consider how to best integrate AI to create lasting value.

Understanding the AI Investment Landscape in 2025

Since the AI breakout, it has advanced dramatically. There are three forces that are reshaping the investment and adoption of AI.

Maturation of Foundation Models
The large language models (LLMs) are now cheaper and faster. They are also customizable. This means that businesses no longer need to build from scratch and can just adapt existing models in their industry.
Regulations and Accountability
Governments are tightening frameworks around data privacy, transparency, and responsible AI. Compliance has become a key competitive differentiator.
Sector-Specific Applications
Advancements in AI have given way to specialized use cases. For example, fintech AI can track fraud, while manufacturing AI optimizes the supply chain.

The AI Hype Cycle

According to Gartner’s 2025 “Hype Cycle for Artificial Intelligence.” AI technologies move through predictable stages. These include the innovation trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment, and plateau of productivity. Between 2023 and 2024, generative AI dominated the headlines. It has now entered the trough of disillusionment as organizations confront their limitations, governance risks, and the difficulty of proving ROI. However, this is not to be seen as a setback, but rather a turning point as businesses shift focus from experimentation to scaling reasonably. Investment is now focused on foundational enablers such as ready data, ModelOps for lifecycle management, and AI agents. By 2025, businesses will be realizing that quick wins are harder than expected. On the bright side, businesses have an opportunity to build sustainable systems that offer measurable business value.

Lessons Learned from the First Wave of AI Adoption

The promises that came with AI led some businesses to invest heavily. This resulted in several mistakes:

Chasing innovation over value
Many businesses rushed to invest in AI-powered projects like chatbots without linking them to actual business goals. For instance, customers have raised concerns about frustration with bank AI bots that confuse rather than help customers, according to the Consumer Financial Protection Bureau (CFPB).
Falling for AI hype
Some businesses invested in companies branding themselves as AI-driven, even when the solutions offered relied on basic automation.
Ignoring integration
Failing to consider that AI is not a plug-and-play solution. This saw some early adopters underestimating the cultural, technical, and operational changes required to integrate AI into workflows.

A Strategic Blueprint for AI Investment

For businesses to invest wisely:

Start with the problem, not the tool
Instead of shopping for tools to adopt, a business should first ponder what problem it wants to solve. This means clearly defining the problem to solve, such as personalizing marketing campaigns or predicting supply shortages. Clarifying a problem ensures the AI investment is focused and not an experiment.
Build a portfolio approach
Borrowing from how investors diversify portfolios, a business should also diversify its AI initiatives. They can do this by balancing short-term projects, such as automating repetitive tasks, with long-term projects like predictive analytics. This is to ensure there is a steady return on investment.
Prioritize responsible and compliant AI
Reputation is crucial, and businesses should avoid mishandling customer data. To do this, companies must invest in compliance, transparency, and explainability as part of their AI strategy.
Invest in people, not just technology
AI does not replace talent. Companies should invest in training and upskilling their workforce. This prepares employees to work well with the new technology to ensure adoption is smooth and effective.
Build scalable infrastructure
Even with the most advanced AI model, failing to have the right foundation will result in unsuccessful implementation. The lesson? Companies must invest in flexible systems that can grow with them.

Conclusion

AI is no longer a futuristic concept. It is a business reality. Adopting AI alone is not enough, and businesses need to do it wisely. Businesses should refrain from jumping on the latest trends. Instead, make strategic choices that align with long-term goals. The focus should be on the problems to be solved and not the tools.

Certified Public Accountant

Category: Blog