PBMares Accounting Blog

Which is better – pre-tax 401(k) or after-tax Roth contributions?

Posted by Anna Hunter, CPA, CPC, QPA on Jul 11, 2017 4:24:44 PM

Question:  My retirement plan allows me to choose between pre-tax 401(k) contributions or after-tax Roth contributions.  Which is better?

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Topics: Retirement Planning

Executive Order Delays Implementation of DOL Fiduciary Rule Regulations

Posted by Anna Hunter, CPA, CPC, QPA on Feb 8, 2017 4:23:28 PM

The Department of Labor (DOL) spent years creating their 2016 Fiduciary Duty Rule final regulation to define a fiduciary of covered retirement plans. The purpose of the DOL regulation was to protect the retirement plan consumer (IRA owners, 401(k) plan participants, etc.) and create liability for those who give advice which is found to not be in the best interest of the consumer.  To achieve this goal, the DOL decided to broaden the definition of who would be included as a covered retirement plan “fiduciary”.

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Topics: Retirement Planning

Can I use the retirement plan to reimburse for stolen company funds?

Posted by Anna Hunter, CPA, CPC, QPA on Jan 30, 2017 8:10:00 AM

Question:  One of my employees stole from the company and when we found out we terminated their employment.  Can we use their company retirement plan balance to pay the company back what was stolen?

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Topics: Retirement Planning

What is a 401(k) match “true up” and why must I do it?

Posted by Anna Hunter, CPA, CPC, QPA on Jan 3, 2017 10:53:12 AM

Dear Anna,

Question:  We’ve been funding an employer matching contribution to the 401(k) plan throughout all last year and now I’m being told I must make an additional matching contribution called a “true up”.  My match calculations were right during the year.  There shouldn’t be an additional “true up” needed.  What is going on?

Answer: 

This occurrence is actually quite common.  It happens whenever you are funding the employees’ matching contribution throughout the year but the matching contribution in your 401(k) plan document is defined as using the “Plan Year” and not by “each payroll”. 

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Topics: Retirement Planning

Retirement and Late 401(k) Deposits Are a Big Deal

Posted by Anna Hunter, CPA, CPC, QPA on Nov 30, 2016 9:15:00 AM

Dear Anna,

Question:  So we recently changed payroll companies and I just found out the new company hasn’t been remitting the employee 401(k) plan amounts like my old payroll company was doing for us.  Some of these payments should have been sent in over a month ago.  Can we just send it in now and be done with it?

Answer:  Alas, if only things were so easy.  The IRS and the Department of Labor (DOL) are really serious about preventing the private sector from withholding 401(k) money from an employee’s paycheck but “forgetting” to submit it to the plan. 

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Topics: Retirement Planning

Want To Save More Than your 401(k) Will Allow?

Posted by Anna Hunter, CPA, CPC, QPA on Oct 6, 2016 8:27:00 AM

 

Dear Anna,

Question:  I’m 58 years old and my dental practice is doing well.  I’d like to increase the amount I save for retirement but I’m being told the maximum I can save for myself is $59,000 this year.  Isn’t there anything else I can do to save more for retirement?

Answer:  What a terrific problem to have!  You have the cash to set aside and you are looking for additional ways to save for later in a tax-deferred environment instead of storing the funds in the bank. 

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Topics: Retirement Planning

Starting the Estate Planning Conversation

Posted by Louise Clayton-Kastenholz on Sep 7, 2016 8:30:00 AM

I recently heard of someone who did not want to write a will because it would make you more likely to die. I found the humor in that bit of logic heartwarming.  There is no way to change the likelihood of death, but there is a natural tendency to try to avoid thinking or talking about it.

With this kind of feeling toward the concept, it is not surprising that 55% of adults in America do not have a will. Although those people without wills may not realize it, they do have an estate plan in place, but they have elected not to have any control over it.

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Topics: Tax Planning, Retirement Planning, Estate Planning

Company Retirement Plans Made Easier – Ask Anna

Posted by Anna Hunter, CPA, CPC, QPA on Aug 30, 2016 8:30:00 AM

Question:  My Company had a good year and my accountant says I could use some more deductions on my tax return.  Can I contribute extra to my company’s SIMPLE IRA plan for myself and employees this year?

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Topics: Tax Planning, Retirement Planning

So Long SEP

Posted by Anna Hunter, CPA, CPC, QPA on Jul 18, 2016 9:00:00 AM

Some employers are still using the Simplified Employee Pension (SEP) plan as the company retirement plan.  These plans are relatively easy to set up and maintain as the IRS has an online Form 5305-SEP available to set up a plan.  For those that don’t want to use the model IRS version of a SEP document, many investment custodians will provide a streamlined SEP adoption agreement if the assets are maintained at their company.  Additionally, there is no annual governmental filing requirement for a SEP plan.

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Topics: Retirement Planning