Tucked inside the narrowly passed “One Big Beautiful Bill Act,” President Trump’s sweeping tax and spending package, is a provision that’s drawing media attention: the creation of a new tax-deferred investment account called a Trump Account. A proposed $1,000 “baby bonus” tied to the account only adds to the intrigue. While the reconciliation bill primarily focuses on extending the 2017 tax cuts and reshuffling federal spending priorities, this unexpected addition could offer new planning opportunities for taxpayers.
Help Your Clients Implement a Fortune 500 CFO Strategy
Randy Sadler, CIC Services
For decades, some of America’s largest corporations have used a financial strategy that gives their CFOs greater control over insurance costs, helps them finance risks the commercial market handles poorly and creates an opportunity to retain underwriting profit when losses come in below expectations. Approximately 90% of Fortune 500 companies have captive insurance subsidiaries.¹ Historically, the economics favored organizations with substantial capital, large insurance programs and the resources to support their own insurance operations. Small and midsize businesses rarely had the scale to justify the cost and complexity. That equation has changed. A mature network of specialized insurance professionals and structures now allows qualifying privately held businesses to pursue many of the same risk-financing advantages. Federal tax law can further improve the economics for certain smaller insurance companies. For CPAs and tax professionals, this creates an advisory opportunity. The challenge is recognizing which clients could benefit and what conditions must exist before recommending it.
