by Daniel Kittell | Construction, Industry - Construction, News, Newsletter, Small Business
The construction industry needs to bring 349,000 new workers in 2026 just to keep labor supply and demand in balance. That’s according to the Associated Builders and Contractors (ABC). And most of that demand is coming from the need to replace retiring workers.
Experienced workers are aging out of the construction industry faster than new ones are entering. And while 349,000 is a big number, it’s actually lower than in recent years. ABC projected a need for 439,000 workers in 2025 and over 500,000 the year before. The 2026 dip reflects modest construction spending forecasts through 2027. But ABC cautions that those forecasts could be too conservative, and any policy changes or drops in financing costs could cause demand to outpace projections.
Where the Shortage Hits Hardest
Electricians are in especially high demand right now. The accelerated growth of AI data centers has led to an increase in large-scale projects requiring highly specialized electrical work.
Labor shortages are also critical near large industrial projects like semiconductor manufacturing facilities. These massive projects draw from a limited pool of workers in the region, which can leave local contractors scrambling to staff workers for their own projects.
The Forces Driving Workforce Challenges
Several things are at play here, with the aging workforce being one of the most significant factors. These workers are taking years of knowledge and skill with them, while the industry plays catch-up to replace them.
Another factor at play is immigration enforcement. The construction industry has historically included undocumented immigrants. But border crossings fell sharply in 2025, and deportation efforts have ramped up, causing a stall in that labor pipeline.
Add to this high labor costs and tariffs that are squeezing budgets, which can have the domino effect of discouraging investment in workforce development.
Technology is also changing the industry. Project management software, robotics, automation, and drones are swiftly integrating into the construction landscape. These tools create demand for workers who can adapt and learn new skills quickly.
What’s the Solution?
This is a complex issue with no clear answer.
Some groups are advocating for a more flexible visa framework to bring in skilled workers from other countries. This would give the industry a faster path to filling workforce gaps.
Training programs that can help workers with transferable skills transition into the construction industry could be another piece of the puzzle.
And apprenticeship programs that allow workers to earn while they build skills could help close the gap.
Labor Shortages Affect More than Job Sites
Labor shortages can affect more than the construction industry. When there aren’t enough workers, projects get delayed, and some stall indefinitely. Roads, bridges, and other infrastructure upgrades can take longer to complete. Housing construction can slow as well, creating a tighter supply and potentially pushing prices higher for buyers and renters.
The impact can spread into the broader economy, too. Large projects that support industries like AI and semiconductor manufacturing may take longer to build, which can slow expansion and investment.
The labor shortage isn’t a quick fix, but it’s manageable. Invest in recruiting, training, retention, and competitive pay to stay ahead of the competition and keep your projects moving.
by Daniel Kittell | Accounting News, News, Newsletter, Retirement, Retirement Savings
If you’ve been sleeping on the Roth 401(k), it’s time for a second look. Yes, they used to come with that inconvenient drawback known as the Required Minimum Distribution (RMD), where you had to withdraw money on a set schedule, whether you needed it or not. But with the implementation of the SECURE 2.0 Act, RMDs are no longer required. Add to this a new rule for catch-up contributions, and Roth 401(k)s just became much more attractive, especially for high earners.
No RMDs Means More Control
Before this change, the IRS required you to start withdrawing money from your Roth 401(k) once you hit a certain age, which forced retirees to pull funds out of an account that would otherwise keep growing tax-free.
Now that both Roth IRAs and Roth 401(k)s are free from RMDs, they’re on a level playing field. This gives you control. If you want to leave your money in the account and let it grow, you can. You have the freedom and flexibility to time withdrawals based on your needs, not a government schedule.
Key Differences Between Roth 401(k) and Roth IRA
Both accounts offer tax-free growth and tax-free withdrawals in retirement. But they are not identical, and the differences are important.
With a Roth IRA, you can only contribute up to $7,500 annually in 2026 (or $8,600 if you’re 50 or older). There’s also an income limit. For 2026, the limit is $153,000 for single filers and $242,000 for joint filers. If you earn too much, you’re not eligible to contribute at all.
A Roth 401(k) doesn’t have those restrictions. The contribution limit is $24,500 in 2026, and there is no income limit.
So for higher earners, the Roth 401(k) is the more accessible option.
A New Rule for Catch-Up Contributions
As of January 1 of this year, under the SECURE 2.0 Act, catch-up contributions for employees who are 50 or older and earn over $150,000 must go into a Roth 401(k). You can no longer direct those extra contributions into a traditional 401(k). That means paying taxes now on those catch-up contributions instead of later.
This might feel constricting for some people, but it’s not a bad deal in the long run. Yes, you’ll pay taxes on contributions now, but the growth and withdrawals remain tax-free.
Why This Matters for High Earners
Put it all together and the Roth 401(k) starts to look like the better option for high earners. You can contribute more than a Roth IRA allows, and you won’t be excluded due to income limits. Your money grows tax-free, and when you withdraw it, you don’t owe taxes on the gains. This can be significant if your balance grows over decades.
Then there’s the question of future tax rates. Many people assume they’ll be in a lower tax bracket in retirement, but when you factor in required withdrawals, Social Security income, and other assets, this isn’t always the case. Some retirees may even end up in higher tax brackets. A Roth 401(k) helps avoid that risk.
To recap, no RMDs, higher contribution limits, and no income restrictions make Roth 401(k)s a strong option. And now, if you’re a high earner making catch-up contributions, you’ll be in a Roth account whether you planned for it or not. Hopefully, now you can start to see why that’s actually a good thing.
by Daniel Kittell | Accounting News, Industry - Professional Services, News, Newsletter, Professional Services, Small Business
Key Takeaways
- Hourly billing rewards time, not results. The traditional billable hour model creates a misalignment between client and firm. Clients want efficiency, but firms earn more when work takes longer. That tension is prompting a shift toward alternative fee arrangements (AFAs).
- AI is accelerating the move to value-based pricing. When AI can compress a five-hour task into one, billing by the hour loses its logic. Firms are increasingly pricing based on outcomes and expertise rather than time spent to stay competitive and protect revenue.
- Outcome-based pricing works best with transparency. Flat fees, capped fees, and hybrid models all have merit, but they require clear communication, accurate project scoping, and client trust to succeed. Done right, they benefit both sides.
Ask any lawyer, accountant, or consultant how they charge for their work, and the answer is almost always the same: by the hour. Agencies have built their entire businesses around the billable hour. Log your hours, multiply by your rate, send the invoice. Simple, consistent, and easy to track.
But the model has never been perfect. And now, with AI changing how work gets done, more firms are starting to question whether billing by the hour still makes sense.
The Problem with Billing by the Hour
The biggest criticism of billing by the hour is perhaps the most obvious: it rewards time, not results. The longer a task takes, the more money the firm earns. That creates a quiet tension between client and firm. The client is interested in efficiency while the firm has a financial incentive to move slowly.
There’s also the issue of unpredictability. Clients don’t often know what the final bill will be. This uncertainty can strain relationships, test trust, and make budgeting difficult for clients.
Finally, hourly billing punishes expertise. For instance, a seasoned attorney who resolves an issue in two hours get paid less than a junior attorney who takes four hours.
AI Has Entered the Chat
AI is changing the conversation here. Firms can research, draft, analyze, and review documents faster than ever with the assistance of AI. Tasks that once took days now take hours. That efficiency is great for clients but eats into billable revenue.
If a task that used to take five hours now takes one, should the firm earn less? The value delivered hasn’t changed, just the time it took to deliver it. And this is why firms are beginning to revisit value-based or outcome-based pricing, which falls under the umbrella of alternative fee arrangements (AFAs).
Alternative Fee Arrangements (AFAs)
AFAs come in several forms. The most common structures are flat fees (one fixed price for a defined service), capped fees (hourly billing up to a maximum cost), blended rates (a single hourly rate across all staff levels), and hybrid models (a combination of hourly and fixed pricing).
These structures shift focus away from time and toward outcome-based pricing, where fees are tied to results. That could mean winning a case, closing a deal, or hitting a specific performance goal.
Why Outcome-Based Pricing Appeals to Clients
Clients don’t care how many hours went into the work. They care about results, and the firm gets paid for delivering results. Outcome-based pricing aligns incentives. Both sides are working toward the same goal.
It also gives clients more clarity. They know what they’re paying for upfront, and they don’t have to meticulously track each phone call and email to the firm to estimate their bill.
For firms, outcome-based pricing creates an opportunity to bill based on expertise, not hours.
How AI Supports the Transition
AI can help make the transition more practical. It improves efficiency by automating routine work, analyzing past projects, and pricing future work more accurately. It also helps to recover time that was previously lost to administrative tasks. That means firms can focus more on high-value work. And that supports a pricing model based on outcome, not time.
Possible Challenges in Transitioning
Shifting away from hourly billing may not be without challenges. Firms need to communicate clearly with clients about new pricing structures. There also needs to be strong internal oversight, where pricing reflects project scope as well as the true effort and risk involved. And there needs to be real transparency. Clients need to trust that a firm’s new outcome-based fees are fair and not just a different way to overcharge.
Hourly billing isn’t disappearing overnight, but firms that shift toward value-based billing will stand out in a crowded market.
by Daniel Kittell | Accounting News, IRS, News, Newsletter, Tax, Tax Planning, Tax Planning - Individual
Inheriting an IRA might feel like a financial win, but the rules today are different than they were just a few years ago. If you’re not up to date, an unexpected tax bill could catch you off guard. Here’s what changed, and how to plan around it.
Changes Made by the SECURE Act
The SECURE Act of 2019 eliminated the “stretch IRA,” which allowed inherited funds to grow tax-deferred for decades while keeping annual withdrawals relatively low. Now, many non-spousal heirs must withdraw the entire inherited IRA within 10 years of the original owner’s death.
This is the 10-year rule, and it can be a tax trap for non-spouse beneficiaries.
If the IRA is traditional, any withdrawals are taxed as ordinary income. If you wait and withdraw everything in year 10, it could push you into a much higher tax bracket.
Who Gets a Pass from the 10-Year Rule?
Not everyone is subject to the 10-year rule. The IRS created a category called “eligible designated beneficiaries.” Beneficiaries in this category can still stretch distributions over their life expectancy. They include:
- A surviving spouse
- A minor child of the deceased IRA owner (until reaching adulthood)
- A disabled beneficiary
- A chronically ill beneficiary
- A beneficiary who is no more than 10 years younger than the original owner
A surviving spouse has the most flexibility. They can roll the inherited IRA into their own IRA and treat it as their own account, which allows them to follow standard RMD rules based on their age.
Minor children who inherit an IRA can take RMDs based on their life expectancy until they reach age 21. After that, the 10-year rule kicks in.
Why the 10-Year Rule Can Be a Problem
The 10-year rule can be problematic for tax purposes. If you inherit an IRA with significant funds and you’re forced to withdraw it within 10 years, those withdrawals could push you into a higher tax bracket. And that, of course, means paying more to the IRS than necessary.
It’s important to note that the 10-year rule enacted in the SECURE Act only applies to IRAs inherited in 2020 and beyond. If you inherited an IRA before 2020, you’re still covered under the old rules.
How to Avoid the Tax Trap
The key is in planning. Don’t wait until the ninth year to make withdrawals. Instead:
- Spread withdrawals over the 10-year period to manage your tax bracket.
- If possible or applicable, coordinate distributions with lower-income years.
- Work with a tax advisor to help you work through different withdrawal strategies.
Here’s the bottom line: the SECURE Act changed the rules for inherited IRAs, and without careful planning, the 10-year requirement can create significant tax bills for beneficiaries. Be prepared, understand the timing, and work with a tax professional to reduce the impact.
by Daniel Kittell | Accounting News, Industry - Veterinary Medicine, News, Newsletter
Running a veterinary clinic means juggling patient care, staff needs, and business operations. Technology can help ease that load, and in 2026, several trends are beginning to emerge for better efficiency, security, and staff and client support. Here are the technology trends shaping the veterinary industry in the year to come.
AI Is Reshaping Workflow
AI is becoming an indispensable tool for diagnostics, documentation, and scheduling. Some AI-powered tools can create notes and exam summaries, helping staff spend less time on paperwork and more time on animals. AI tools can also scan X-rays or lab results to support faster and more accurate results than humans alone. But AI is not a replacement for humans. Professional expertise still guides treatment, and human interaction is still imperative for client comfort, confidence, and retention.
Telemedicine Isn’t Going Anywhere
The pandemic pushed the industry into exploring virtual care, and now it’s a practical tool for ongoing care and follow-ups. Telehealth platforms allow practices to consult with clients, address minor concerns, and answer questions. It’s convenient for both clients and practices (when used efficiently, telehealth can help increase daily cases), but it’s especially helpful for clients in rural areas and those with mobility issues.
Health Trackers for Personalized Care
Just like wearable gadgets for humans, activity trackers and smart collars can track an animal’s heart rate, steps, and sleep. They alert clients through apps when red flags like weight gain or low energy start trending, potentially leading to preventative care and tailored treatment plans, not just emergency or reactive care.
Cloud-Based Practice Software
Cloud-based management software is essential. It automates scheduling, inventory, and billing, and it offers stronger security. Staff can log in from anywhere, updates happen automatically, and multi-location clinics or hospitals can work more seamlessly across sites. Costs typically start low, add-on features like online scheduling are usually easy to integrate, and if a computer crashes? Your data is still safe.
Flexible Payment Options Help Reduce Financial Stress
Affordability remains a significant barrier to care. Payment flexibility not only helps clients but also protects a clinic’s revenue by facilitating ongoing care and routine visits. Platforms that support wellness checkups, subscriptions, pet insurance, and in-house financing can ease budgets, reduce admin work, and ensure clients follow through with recommended care. Sometimes, payment flexibility is all it takes to prevent economic euthanasia.
Digital Wellness Plans
Digital wellness platforms can create custom plans to help clients stay on schedule, which leads to reliable revenue streams for practices. These platforms help by spreading out costs and reminding pet owners when it’s time for exams, vaccines, medicines, or screenings. It’s affordable for owners, sustainable for staff, and helps to increase compliance. And when clinics see higher compliance, pets stay healthier. If your practice is just wading into the waters of digital wellness platforms, try starting small with one platform to test.
