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About Small Business Retirement Plan

admin — Sun, 15 May 2011 09:05:32 +0000

The small business retirement plan is something that gives the owner something to look forward to in the future. The plans offer some security, and the family can find some relief from funeral, and related experiences after your death. Since each plan is different, it pays to examine the plans closely before signing papers.

One of the best ways to learn about small business plans is by searching the Internet. You can use the search tools online to search through the many providers, plans, prices, and other related subjects. Small businesses can open business accounts online that offer them tools for managing their finances, including their retirement monies. Another alternative is the Simplified Employee Pensions. These plans are the most effective and have the lowest fees on plans. Employees have a few advantages with this plan.

Joint Ventures, independent contractors and sole proprietors, etc, can choose the SEPS plans. This simplified plan has Secretarial fees that are commonly lower than some of the IRA plans. That Is the individual retirement accounts. There is minimal recording keep with these plans.
SEP give employers’ larger contribution options, some people prefer the Uni-K plans if they are sole proprietors. SEP has some disadvantages. One of the disadvantages is that the plans are complex for business owners with employees.

Some of the basic Uni-K plans include the 401k solo, single, personal, individual, and the plans available for special practitioners. Home workers may prefer this plan as well. SEP contributions put into an account goes into a 100% vest right away. Tax deferments grow on employees’ SEP account, which builds up from the contributions. The employees do not need to worry about tax owed to the IRS. There aren’t any taxes on the dividends, gains from capital, or interest incurred. Once the employee begins to make withdraws from the account however, then they will have to pay taxes.

With the small business retirement plan, the employees must deduct funds from the account after he or she turns 70 1/2. The employers can make contributes up until then. If anyone “59 1/2″ draws funds from the account, they may have to pay up to 10% on penalties. There is a maximum limit on contributions, which are subject to change each year.

You can set more money aside on the Simplified plans than you can on typically individual retirement accounts. Moreover, employers can enjoy deductibles on taxes. The taxes are excluded from salary as well, since it is not considered a recompense or reimbursement.

Small business owners before did not have many retirement options available. Today, because so many people are getting into small business, there are plenty of insurance plans available. If you are searching for small business retirement plan then go online and do some research. It pays to read all the details on a given plan and compare the plan with other small business plans to ensure you get the most coverage for the best price possible.

2010 Health Savings Account Contribution Limits Set

admin — Fri, 13 May 2011 11:55:47 +0000

The U.S. Treasury and IRS have already announced what the maximum contributions will be for Health Savings Accounts or HSA in 2010. Individuals may contribute up to $3,050 in 2010 and families may contribute up to $6,150 per year. Also, individuals aged 55 or older can contribute $1,000 as a catch-up contribution. The money that HSA participants contribute to their HSA is tax-deductible from their annual income taxes.

In addition to the maximum contribution amounts that HSA participants can contribute each year, there are also maximum out-of-pocket spending caps. In 2010, individuals must have a maximum out-of-pocket spending cap of $5,950. Families must have a maximum out-of-pocket spending deductible of $11,900.

Minimum insurance deductibles are also determined by the government. In 2010, individuals must have a minimum insurance deductible of $1,200 for their high deductible insurance plans. Families must have a minimum deductible of $2,400 for their high deductible insurance plans.

Each of these figures increased by $50 for individual HSA participants and at least $200 for family HSA participants.

What is a Health Savings Account?

A Health Savings Account is a savings account in which participants can put money that they earmark for healthcare expenses. The contributions that HSA participants make towards their HSA each year is reduced from their income tax burden, which helps to save HSA participants money off of their income taxes.

HSA participants can use the money that they put into their Health Savings Accounts to help pay for qualifying healthcare expenses. Often, the healthcare expenses that are covered by Health Savings Accounts are greater than healthcare expenses that are covered by many health insurance plans.

If HSA participants want to use the money in their HSA to pay for non-qualifying healthcare expenses or for expenses not related to healthcare, they can withdraw the funds from their HSA at any time. When they make their withdrawals, the funds will be taxed at that time. However, funds will not be taxed if they are spent on qualifying healthcare expenses.

One of the many benefits of enrolling in a HSA plan is that individuals and families are generally able to save thousands of dollars each year while growing their wealth. The money that HSA participants invest in their HSA can be invested in other high interest-yielding vehicles, such as stocks and bonds. In this sense, HSA are similar to IRAs.

Also, because Health Savings Accounts are combined with high deductible health insurance plans, Health Savings Account participants can save a significant amount of money each month off of the cost of their health insurance premiums.

Where to get a Health Savings Account

Many Health Savings Account participants are able to get their HSA through their employers. In this case, many employers also make contributions to Health Savings Accounts for their employees, which are tax-deductible for the employer and helps employees to grow their savings. If HSAs are not available through employers, many individuals opt to enroll in Health Savings Accounts on their own as individuals or as families.

Many health insurance providers offer HSA options as part of their menu of health insurance plans. It is important that individuals wishing to enroll in HSA find qualifying high deductible health insurance plans that are specifically suited to correspond to HSA.

It may also be helpful for individuals wishing to enroll in HSA to contact an experience Health Savings Account advisor who can help them find the right plan for their needs and their budgets. HSA advisors can also answer any questions that individuals may have about HSA plans, as they may be different than health insurance plans that many individuals are accustomed to.

Ultimately, HSAs tend to save individuals and families thousands of dollars each year off of the cost of their healthcare. With the HSA contribution increase in 2010, HSA participants can put more money away for savings than ever before.

4 Types of Small Business Plans for Self Directed IRA Accounts

admin — Sat, 12 Mar 2011 03:20:44 +0000

Self directed IRA accounts work great for those who want to make their own financial decisions, but what about individuals who are self employed or own small businesses? Where do they turn when it comes time to think about retirement plans?

Most of businesses aren’t big enough to qualify for a large retirement plan. So the IRS has constructed several small business retirement plans for these people to take advantage of. When it comes to retirement age, many self employed and small business owners could be left with a meager social security check that would not meet the needs of the lifestyle that they are accustomed to living.

Fortunately, most reputable self directed IRA custodians also offer plans such as SEP, SIMPLE, Solo 401(k), and Roth Solo 401(k).

Simplified Employee Plan (SEP)

The SEP is a retirement plan meant for self-employed individuals and small business owners. Typically, the small business has less than 25 employees. This plan offers the individual a retirement account that doesn’t require complicated qualified plans such as a conventional IRA or 401(k). Advantages include:

• All contributions are tax deductible and compound with tax-deferred savings until the time of withdrawal.
• The employer may contribute up to 25% of the employee’s wages with a maximum of $49,000 each year.

Savings Incentive Match Plan for Employees (SIMPLE)

If you own a business with less than 100 employees and do not have any other type of qualified plan available, the SIMPLE is something to look into. With this plan, you and your spouse can make contributions if you make $45,000 or less per year. Advantages include:

• Tax deductible investments compounded with tax-deferment until the time of withdrawal.
• Employee contributions up to $11,500 for those under the age of 50.
• Employee contributions up to $14,000 for those over the age of 50.
• Employers match dollar for dollar up to 3% of the employee’s compensation.

Solo 401(k)

Think of this plan as a combination of the SIMPLE and the SEP. Basically, a sole proprietorship is offered a qualified plan that allows larger contributions and larger deductions. Advantages include:

• You don’t have to be incorporated to qualify. This includes sole proprietors, partnerships and corporations, too.
• Contributions can reach $16,500 annually if you are under the age of 50.
• Contributions can reach $22,000 annually if you are over the age of 50.
• 0-25% of your profit sharing may be included, too.

Roth Solo 401(k)

The Roth works the same as the Solo 401(k), but you also have the added tax benefits of a Roth IRA. Contribution levels remain the same, but taxes are paid before they are put into the retirement. Additional advantages include:

• If your income limits exceed qualification levels for a Roth IRA, you may be able to consider the Roth Solo 401(k) as an option.

There is a Retirement Plan for Everyone

If you thought that you would never be able to participate in a qualified plan, and you were starting to look at other investment opportunities, you still have some other options. Generally, a retirement plan will offer compound interest through tax deductions and tax deferment that other types of investments aren’t able to offer.

If you are looking into the different types of self directed IRA accounts that you may qualify for, you may want to consider one of these four options.

Deep Dive on 2011 401k Contributions

admin — Thu, 10 Mar 2011 16:45:44 +0000

One of my big goals in 2010 was to max out my 401k and I accomplished that in May. As 2010 rolls to a close, it’s time to begin planning for 2011. As you begin planning, you might be wondering how much you should elect to contribute to your 401k for 2011 By way of background, as you likely know, the IRS has a contribution ceiling that represents a limit for tax deferred contributions. And one of the important questions for planning for 2011 is what is the new contribution maximum going to be for your 401k or Roth IRA. If you’re like me, you want to make sure that you can deduct as much as possible from your taxes, so the higher the number, the better.

The frustrating this is that the IRS hasn’t yet posted what the limits are going to be for next year, so I took matters into my own hands and did some research. The IRS doesn’t offer a number on its site for next year, but it does indicate that future increases in the limit for 401k contributions will only go up if inflation goes up. With the way that things are currently trending, that means that next year we won’t be getting an increase next year. That means that social security payments, Roth IRA and 401k contributions limits– anything pegged to inflation — will pretty much stay the same next year. In 2011, my informed best guess is that the contribution maximum will remain at $16,500.

Are There Any Other Better Options Than 401k Retirement Plan?

admin — Sat, 19 Feb 2011 00:18:24 +0000

Most people might think 401(k) retirement plan is the best choice ever, whereas the rest consider 401k rollover options. For one of my acquaintances, 401(k) plan simply is not.

His shoulders sank as he learned the recent maximum limits of 401k contribution remains the same this year (which has been three years in a row already!). He hoped the government raised it to $30,000 or if possible $50,000.

He sneeringly quipped, “How does someone retire off $16.5k/yr after 30 years? Ain’t gonna happen!” Some other question why such limitations are implemented. “What’s the point?” there they whine. It seems to me that the 2010 announced limitations are greatly unsatisfactory for workers or entrepreneurs who make more money than the maximum limitations.

Contrary to what some citizens complain about the stagnant limits, an up to date survey stated that with more than 550,000 401(k) accounts as the object, only a scarce number of Americans are in fact saving the maximum tolerable by the IRS or their plan limits.

Regardless of the fact that you can or cannot save more than the limits, if you really want to retire with peace of mind but do NOT think that 401(k) is the appropriate one for you, do not be troubled. You still have much better options than saving your capital to 401(k) plan.

Here are some of good options for your consideration:

Roth IRA

If you are qualified enough, try applying for it even before trying 401(k). It is worth it.

Pension Plan

This is a good alternative especially if you are currently working in a company or firm offering pension plans. Besides adding to your own contributions, you can also save some more to your 401(k) plan.

Traditional IRA

Attempt this if you are not eligible for a Roth.

Conventional Way

People tend to overlook an old method of keeping money for their old days that our ancestors used to do, i.e. regular saving. But hey people, it’s simple and not to mention, sensible! As long as you are disciplined (not to spend it before the days come), there is no reason to get anxious about how you spend your retirement times. To note, there is no tax advantages to your retirement savings.

Those are some options that I can figure out to get through the current economic hardships. It is not certainly a one-size-fits-all plan, but the four alternatives above are the best from the worst.

IRA Real Estate – Making a Secure Investment For Your Retirement

admin — Wed, 02 Feb 2011 15:02:46 +0000

Making the most of the money in your Independent Retirement Annuity (IRA) is a decision to make the most of the future.IRA Real Estate is one of the best ways of ensuring that your retirement investment is safe and secure while making you extra money. An IRA is an account that is set up by an individual to save and invest for their retirement. It is a way of being able to plan for the future without having to rely on a retirement plan from and employer. Using an IRA for investment purposes to increase the funds in the annuity not only makes good sense, but also it could be a way of doing business by becoming a private moneylender.

Risk Analysis

Although there are people who are hesitant to use the money for fear of losing everything, the risks associated with IRS Real Estate Investment can be carefully assessed before making a decision. It is in fact, one of the best ways of putting your retirement annuity to work. Using an IRA for investment purposes is akin to the buying and selling of share and stocks. There is also a way of creating a self-directed IRA, which will mean that you actually purchase the physical property and not only the IRA Estate stocks.

One of the most secure ways of using your IRA for the benefit of your retirement is to use an IRA real Estate Trust or to invest in IRA Estate Mutual Funds. This is an excellent way of planning for the future because you can choose a mutual fund that is linked to your personal risk profile and the age that you intend to retire. It holds very little risk and you will be able to track the progress of your shares and your investment in the IRA Real Estate Investment Trust at any time that you choose. This trust acts in the same way as any other mutual fund, but it is linked to a fluctuating share price.

Even though the economy is stagnant at the moment, investing in and IRA Real Estate Fund is one of the safest investments that are sure to grow and deliver a financial reward by the time that you retire. Real Estate may have been affected by the economic recession, but it is one of the sectors of the economy that is showing massive signs of growth. President Obama has thrown his weight behind the investors in the commercial property market and is creating new opportunities for investment in this dynamic market.

Retirement should be a time in your life when you are able to enjoy some of the finer things and not worry about where the money is coming from. Investing your retirement funds now means that you are taking an active part in creating the sort of retirement that you want. With careful planning and a sound financial advisor, using an IRA Real Estate investment company to guide and advise you, the future has never looked better.

Emancipation Day Extends Tax Day 2011

admin — Wed, 26 Jan 2011 03:33:46 +0000

Tax Day 2011 Extension

Normally, all previous years’ taxes are to be postmarked no later than midnight on April 15th of the following year of any given year. Meaning, that your taxes due for 2010 must be paid and filed by April 15th 2011, correct? Well, normally, yes; but not this year. The only time that this normally fluctuates is if and when April 15th falls on a weekend. April 15, 2011 will be on a Friday – so what gives? For the millions of American, like me, who wait until the last possible minute (my mantra – procrastinate later) this is welcome, but puzzling news. While we procrastinators and last minute filers rarely reason long enough to ask why, it is important to know the correct date, and to realize how it may or may not have an effect on other dates relevant to Tax Day 2011 such as automatic extension dates.

Extension to Pay NOT an Option

It is imperative to state and remind that although the IRS grants “automatic” extensions allowing taxpayers to file their final forms sixty days later, the extension and any estimated owed taxes are still due on tax day, which for 2011 means that your forms and payment (normally done on a Form 1040 V) must be postmarked at or before midnight, Monday April 18, 2011. Tax Day 2011 Extended Due to Emancipation Day Recognition What holiday? So by now, most of us Americans are racking our brains and scratching our heads trying to figure out what holiday in April is nationally celebrated. Tax Day 2011 has been extended due to remembrance, recognition and celebration of Emancipation Day, a Washington D.C. holiday, not a nationally recognized holiday.

Emancipation Day had been recognized previously by (Washington D.C.) mayoral proclamation and now by being officially designated as an officially recognized public holiday of the District of Columbia. The holiday commemorates the “first freed” by the U.S. federal government when President Lincoln signed the Compensated Emancipated Act nine months prior to his issuance of the infamous Emancipation Proclamation.

As a result of the public holiday in Washington D.C. the Department of Treasury, the governing body overseeing the Internal Revenue Service, has extended Tax Day 2011 until Monday, April 18, 2011. Careful Calendar Markings Required Emancipation Day does not equate to Tax Amnesty Day. Just because Tax Day 2011 is not April 18th versus the 15th does not automatically adjust other dates by 3 days. Keep these dates in mind:

Overseas Exception Due Date: June 15, 2011, the 15th falls on a regularly scheduled business day and hence the deadline will not be extended without approval.

Automatic Approval Extensions Due Date: June 15, 2011 (remember – estimated payments must still be sent in via IRS Form 1040V with the request for extension; it is better to over estimate as you may still be held liable for penalties for underpayment.)

Approved Filing 1040 Extensions Due Date: October 15, 2011

The extension of Tax Day 2011 will give some the necessary additional weekend and time to prepare and file the required forms and payments, but hopefully it will allow all to reflect on the reason – Emancipation Day, commemorating the freeing of those held in servitude in the federal capitol.

Business Credit Card Receivables Reported to IRS Starting in 2011

admin — Tue, 25 Jan 2011 00:47:31 +0000

The IRS is seeking more and more information to close the tax gap that hovers in the $400 billion dollar range each year. One new technique is to gather data on the payments made to businesses through credit cards or debit cards. Starting in 2011, banks will have to tally and report these payments to the IRS for every business that transacts such business. That shouldn’t be much of a burden!

The IRS is being charged with closing the tax gap that supposedly exists in the United States. The agency has a problem, however. There are so many transactions in our modern digital economy that tracking the movement of the money can be very, very difficult. Unfortunately, the Agency has figured out a way to deal with the problem – it is shifting it to the taxpayers and entities handling the transactions.

Most businesses accept debit and credit card transactions these days. People are used to paying with plastic, so it is almost a necessity unless you want to send business to your competitors. These transactions are a bookkeeping nightmare in most cases because of the sheer volume of them. Well, the IRS suspects that businesses are letting the reporting slip and thinks tax revenues can be found in the mass of transactions.

With this in mind, the Agency has issued regulations that require banks to report the annual transactions of every business each year. Under revenue code section 6050W, banks will be required to create an annual summary of the charges, and provide reports to the business and IRS. This informational reporting will then be used in comparison with reported income from the business and during audits. Oh, joy. Fortunately, the new regulation doesn’t kick in till 2011. Still, businesses need to be fully aware of the situation.

This new reporting requirement is merely the tip of the iceberg regarding new tax regulations. Congress has issued a number of laws that require the IRS to become much nosier in both business and personal affairs. We stand on the cusp of a major invasion of privacy form a tax perspective that will simply boggle the mind of most people in a couple of years. The confusion and burden of dealing with the tons of new regulations reflect the desires of an out of control government that desperately needs revenues, but should be cutting expenses instead.

Like that will every happen.

Income Tax Rates

admin — Thu, 20 Jan 2011 18:03:15 +0000

The income tax rates are important information that every person should be aware of as it would help them in filing their taxes appropriately. For the year 2010, the income tax rates would remain largely similar to the rates that were prevalent in 2009. Going into 2010, the IRS announced that due to low inflation and slow economy the rates have not changed much. Keeping the consumer price index (CPI) in mind and the stagnated growth, the IRS decided to keep the personal exemption amount and the standard deduction bracket similar to the 2009 tax rates.

Understanding federal and state taxes isn’t that difficult if you understand the rates. Once you know about the rates, then you can easily decide which bracket applies in your case and thereby you can estimate your taxes on your own. The state income taxes generally range between 1% and 10%, and for every state there is a different rate. In some states there are also city income taxes so you must be aware of that too. With the start of 2011, it may be predicted that President Obama might cut down the Bush rates and go back to the income tax rates prevalent in 2001 to 2003. The top income tax rate might go back to 39.6 percent while the low bracket of 10 percent might be eliminated in future.

For the coming year 2011, the tax we pay might see an increase in capital gains and dividend rates. The capital gains rate might go back to 20 percent from 15 percent that was prevalent in 2010, and your dividend income might be taxed as your ordinary income so you must keep all these points in mind to calculate your tax correctly in future.

The rates keep changing yearly and unless you are well aware of the rates then you might suffer tremendously if you calculate your taxes with the old tax rate. You should keep track of your previous year income and taxes to chalk out your future taxes correctly. You must also look into child tax credit and the estate tax rates to calculate your taxes correctly.

Lastly, income tax rates can be checked online from any government site or you can also download them for easy reference. You can check on the rates table from any place, as long as it is reliable and you must use the correct rates to calculate your income taxes.

Online Tax Filing: Why File Taxes Online?

admin — Tue, 28 Dec 2010 23:21:59 +0000

Online tax filing provides an easy, hassle-free way of filing your taxes. Even if you’ve never filed taxes before, online tax filing will get you through the process, quickly and affordably.

Why file taxes online?

There is little reason to file your taxes the traditional way ever again! With online tax filing, you are guided step by step to ensure that your tax returns are accurate. Help is always available at the click of a button through an interactive system built directly into the program. Because everything is outlined for you, you’ll only need your W2s, 1099s, and other documents to complete your taxes.

Online tax filing makes your life easier. It works with the IRS system, eFile, which electronically files your tax returns. There is no need to worry about missed deadlines because you won’t have to send them by mail. At the end, you only need to click a button to send your tax returns. You can also print out a copy for your records.

With online tax filing, you won’t have to pay a tax accountant’s professional fees to get your taxes filed. Online tax filing is as low as $20, which saves you money. Because online tax filing systems are designed to catch errors, you don’t have to worry about your information being wrong. Also, online tax filing offers deductions tools so you can accurately enter your deductions and maximize your tax refund.

You can also opt to receive your tax refund check via direct deposit. With online tax filing, all you have to do is enter your bank account and routing numbers to request a direct deposit. The best part is that you’ll receive your refund check in half the time. Plus, you can skip the line at the bank and the time it takes for the check to clear.

What do I need to file my taxes online?

Just gather your W2′s, 1099s, receipts, and other necessary documents. All the information you need is contained within these documents. Online tax filing systems will guide you through the documents. Online tax filing allows you to look in the correct area and fill in the number on the online form. You won’t have to worry about reading the wrong box or entering the wrong number. Everything is outlined so you can quickly and easily file your taxes.

Online tax filing programs come equipped with a deduction finder. This ensures that you have fully taken advantage of every available deduction. Just answer yes or no questions and the online tax filing program will guide you to the right deductions. With a system so accurate, there is no need to worry about missed deductions.

The Bottom Line

Online tax filing is the easiest way to file your taxes and offers the best way to pay your taxes and receive your refund check. If you want a hassle-free, easy way to file your taxes, give online tax filing programs a try.