Accounting 499 (2 units) 14186R
Fall 2017
Personal Financial and Tax Planning
TTh 12 – 1:50
INSTRUCTOR
Dr. Shiing-wu Wang
Office: Acct 308C
Tel: (213) 740-5012; Fax: (213) 747-2815
e-mail:
EMERGENCY INFORMATION
- USC Emergencies: 213-740-4321
- USC Public Safety—Non Emergencies: 213-740-6000
- USC Emergency Information Line 740-9233
- USC Information Line 740-2311
- KUSC Radio 91.5
OFFICE HOURS
2– 3:30 MW or by appointment
PREREQUISITES
Acct 374 There will need to be a “D” clearance for this course.
TEXTBOOK AND REFERENCE
Essentials of Personal Financial Planning, 1st Edition, American Institute of Certified Public Accounts (AICPA), 2017.ISBN-13:978-1945498237
Scholes, Wolfson, Erickson, Maydew, Shevlin. Taxes and Business Strategy: A Planning Approach, 4rd Ed. (2008) Pearson Prentice Hall. Upper Saddle River, New Jersey (SWEMS).
Internal Revenue Service Website:
Research database: CCH RIA
COURSE DESCRIPTION
There is an increased demand and growth of personal financial and tax planning services in areas such as estate, retirement, risk management and investments. For example, American Institute of Certified Public Accounts (AICPA) has identifies the following facts.
•The financial planning profession is forecasted to grow two times faster than the U.S. accounting profession through 2017.
•The U.S. Bureau of Labor Statistics projects a 27% growth in the demand for advisers through 2022.
•10,000 baby boomers per day will reach retirement age between now and 2030.
•According to a 2012 Accenture study, some $30 trillion will be transferred from one generation to the next as baby boomers pass along their life savings to their heirs.
As a result, there is a great desire for knowledge of personal financial and tax planning for either personal purposes or professionals who want to pursue financial and tax planning as a career. This is especially true for accounting students. In the absence of a systematic coverage of financial and tax planning in the current curriculum, this course is designed to fill the void.
This course will touch base onessential elements in financial and tax planning. These include
•Retirement planning
•Risk management/insurance
•Investments
•Trust and estate planning
•Wealth management and preservation
•Tax planning and tax effect on all elements identified above
Basic concepts and vehicles used in each of the above element will be introduced. Tax effect on each vehicle will be evaluated and backed up by examples. Two textbooks will be the basis for discussion in this course. Supplement readings from authoritative sources and financial press will be used extensively to update contemporary issues in personal financial and tax planning.
At the end of the course, the students will have exposure to all important issues in personal financial and tax planning and a good understanding of the basic planning approach. This yields a good command of the basic knowledge for either personal gain or future career planning in the financial and tax planning discipline.
COURSE LEARNING OBJECTIVES
Upon successful completion of the course, students will be able to:
- Describe the current financial planning environment
- Explain the fundamentals of financial and tax planning
- Assess alternative investment/savings vehicles and their tax effects
- Access the credit reporting system
- Describe the process, benefits and costs of loans and mortgages
- Compare the values and restrictions of a variety of common insurance products
- Describe basic options for retirement financial planning and tax effects
- Explain the basis components of estate planning
- Compare strategies for charitable gifting and their impact on taxes
GRADING POLICY
A possible total of 500 points can be earned in this course. A student’s grade will be determined by a curve based on the total points earned. The 500 points are assigned as follows:
Midterm30%150
Final exam35%175
Assignments and Research problems25%125
Class participation 10% 50
100%500
NOTES ON GRADING POLICY
1. NO MAKE UP EXAMS WILL BE GIVEN.
2. All assignments, exams, and class participation will be evaluated on effectiveness of your communication. This includes grammar, spelling, organization, format and the other essentials of strong and effective communication.
3. All assignments are due on the dates indicated on the course syllabus. Giving the complexity of the cases, you are required to work as a group of four (no exception). A group report is due on the date indicated. Late assignment will receive a grade of ZERO.
4. Class attendance is very important in developing a coherent view of the materials covered in the course. This is particularly true as there is no single text which ties all of the materials together. It is expected that each student will be prepared for each class and will participate through volunteering or by being called on to add to the discussion.
5. We adhere to the USC Leventhal School of Accounting and Marshall School of Business grading standards. In general, final course grades for this course average approximately B+ (3.3), but may vary based on class performance.
ACADEMIC CONDUCT
Students enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code. Students are responsible for obtaining, reading, and understanding the Honor Code System handbook. Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook. For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101.
Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism inSCampusin Part B, Section 11,Behavior Violating University Standards. Other forms of academic dishonesty are equally unacceptable. See additional information inSCampusand university policies on scientific misconduct.
Discrimination, sexual assault, and harassment are not tolerated by the university. You are encouraged to report any incidents to theOffice of Equity and Diversityor to theDepartment of Public Safety. This is important for the safety of the whole USC community. Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report, or can initiate the report on behalf of another person.Relationship and Sexual Violence Prevention and Services (RSVP) provides 24/7 confidential support, and the sexual assault resource center webpagedescribes reporting options and other resources.
SUPPORT SYSTEMS
The Office of Disability Servicesand Programs provides certification for students with disabilities and helps arrange the relevant accommodations.
If an officiallydeclared emergency makes travel to campus infeasible,USC Emergency Informationwill provide safety and other updates, including ways in which instruction will be continued by means of blackboard, teleconferencing, and other technology.
KEY DATES
Monday, October 16 / First Day of Class, 2nd Half, Session 442Tuesday, October 24 / Last Day to Add/Drop without"W" for ACCT courses (2nd Half Session 442
Monday, November 6 / Last Day to change enrollment from P/NP to a Lettergrade (2nd Half Session 442)
Friday, November 10 / Last Day to Drop with a "W", Regular Session Courses
Monday, November 20 / Last Day to Drop with “W” for ACCT courses (2nd Half Session 442)
Wednesday-Friday, November 22-24 / Thanksgiving Break
Friday, December 1 / Last Class Meeting
December 6 – December 13 / Final Examinations
Thurs., December 14 - Sun., January 7 / Winter Recess
CLASS SCHEDULE
Date / Topics / AssignmentsOct / 17 / Introduction
- Personal financial planning process, concepts and regulatory environment.
- Tax planning fundamentals and financial planning integration
- Applicable steps and strategies within the personal financial/tax planning process, including communications skills (behavioral elements).
19 / Fundamentals of Financial and Tax planning
- Personal financial statements
- Cash management strategies
- Debt management strategies – financing asset acquisitions
- Tax liability management strategies
- The economic environment
- Consumer protection issues
- Tax law fundamentals
24 / Return to Alternative Investment/Savings Vehicles
- Time Value of Money Concepts
- Review of compound interest
- Savings vehicles
- Investment in saving vehicles
- Tax effect on savings vehicles
26 / Investment Basics
- Regulatory environment
- Data gathering
- Analysis
- Investment policy statement
31 / Types of Investment Vehicles
- Cash and cash equivalents
- Bonds
- Stocks
- Mutual funds
- ETF
- Other
- Taxation of the investment vehicles
Nov / 2 / Personal finance and credit reporting system
- Basics of loans and mortgage
- Overview of the credit reporting system in U.S. – FCRA, history, and development
- the function of credit reporting system and its importance to the economy
- Major credit reporting agencies and FICO scores
- Interest and payment computation
7 / Insurance Planning Basics Part I
- the different types of life insurance
- underwriting factors as they relate to risk classifications
- the different types of individual and group medical expense plans
- the tax advantages of HSAs, FSAs, and HRAs
9 / Insurance Planning Basics Part II
- The various types and uses of annuities
- Types of disability insurance
- The appropriate Policy Form for insured property based on covered perils
- The need for LTC insurance
14 / Midterm
16 / Retirement planning– Saving for retirement
- Employer-sponsored retirement plans available to an employer, 401(k), Roth 401(k), 403(b), SEP
- Compensation planning, pension
- ESOPS
- Tax effect on employer-sponsored retirement plans
- Individual arranged retirement plans
- IRA (deductible and non-deductible)
- Roth IRA
- The power of tax-deferred compounding
21 / Retirement planning – Social Security and Medicare
- Overview of Social Security and Medicare
- Contribution to Social Security and Medicare
- Social Security and Medicare in retirement
- Planning for Social Security – full retirement benefits or early retirement benefits
- Tax of Social Security benefits
28 / Retirement planning – Investing and spending
- Building a retirement portfolio – diversification and rebalancing
- Withdrawal rate and portfolio allocations
- Required Minimum Distributions (RMD)
- Inherited IRA
- Cost of retirement – health care costs, long-term care, etc.
30 / Estate Planning Basics
- Basic concepts and documents of estate planning.
- The steps within the estate tax calculation and sources of funding.
- Skip generation transfer
Charitable Gift Planning Basics
- Gifting strategies and the characteristics of charitable trusts
- Tax effect of charitable gift
Dec / 12 / December per University schedule
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STUDENT LEARNING OUTCOMES
Below are the five Student Learning Outcomes developed for this program by the USC Leventhal faculty and administration and filed with the AACSB, the accrediting body for accounting and business schools:
LSOA STUDENT LEARNING OBJECTIVESOBJ 1 / Technical Knowledge / Students will demonstrate technical proficiency in the accounting discipline, including the use of technical accounting knowledgeto help solve problems and make decisions.
OBJ 2 / Research,Analysis and Critical Thinking / Students will demonstrate the ability to research, critically analyze, synthesize, and evaluate information including professional standards for decision making in the local, regional and global business environment.
OBJ 3 / Ethical Decision Making / Students will demonstrate an understanding of ethics, ethical behavior and ethical decision-making.
OBJ 4 / Communication / Students will demonstrate the ability to communicate ideas both orally and in writing in a clear, organized and persuasive manner.
OBJ 5 / Leadership, Collaboration and Professionalism / Students will demonstrate leadership skills and the ability to work cooperatively and productively to accomplish established goals.
This course will primarily deal with the Outcome #1, 2, 3 and 4.
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