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Tag Archive for Retirement

Small Business Owners: A SEP IRA May Give You One Last 2017 Tax Savings Opportunity

Are you a high-income small-business owner who doesn’t currently have a tax-advantaged retirement plan set up for yourself? A Simplified Employee Pension (SEP) may be just what you need, and now may be a great time to establish one. A SEP has high contribution limits and is simple to set up. Best of all, there’s still time to establish a SEP for 2017 and make contributions to it that you can deduct on your 2017 income tax return.

2018 Deadlines For 2017 Read more

Senate Finance Committee Reduction in Retirement Savings of Public Education and Government Employees

I have been focused this past week on understanding the impact and implementation of the House Ways & Means and Senate Finance Committee proposals on U.S. businesses foreign source income.  Two proposals that interest me are the ones aimed at transfer pricing, being (1) the minimum deemed distribution of a foreign subsidiary’s earnings above a statutorily defined return on tangible capital and (2) the 20% excise tax on payment to foreign related corporations.

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IRS Policy Needs to Reflect the Reality of Retirement for Today’s Taxpayers

Unlike private creditors, the IRS has wide discretion to exercise its administrative levy powers. Internal Revenue Code (IRC) § 6331(a) says the IRS can generally “levy upon all property and rights to property.” The IRS must make notice and demand for payment and in most instances provide collection due process (CDP) rights prior to levy. And under IRC § 6334, the IRS is prohibited from levying on certain sources of payments, such as unemployment benefits and child support. But overall, the IRS can cast a large net when it chooses to levy a taxpayer’s property, including funds in retirement accounts.
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Disaster Victims Can Take Hardship Distributions From Retirement Plans

Barry Fowler, Tax Advisor

The IRS has announced relief for victims of recent disasters. If you live in a federally-declared disaster area, you qualify for this program. As an affected taxpayer, you may take a loan or hardship distribution from your retirement plan.

Streamlined procedures have been put in place to allow taxpayers quick access to funds in these accounts. The plan must allow for hardship withdrawals. However, these distributions may be made prior to the plan being amended to allow such withdrawals.  Contact the human resources department at your company to see if your plan allows these loans or distributions. The IRS is waiving the six-month ban on distributions that normally affects taxpayers taking hardship distributions. Any distribution or loan under this announcement must be made by January 31, 2018.

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Don’t Miss These Credits That Will Grant You Tax Relief!

Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

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Are You Taking Advantage Of The Saver’s Credit?

Barry Fowler

As we get closer to tax season, there’s a benefit that many taxpayers consistently miss out on.

I like to help my clients get every benefit from the government they can. That’s why I’m taking time to help you familiarize yourself with the tax advantages of the Saver’s Credit.

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Ideas for Retirement Savings Reform

On 1/28/16, the Senate Finance Committee held a hearing on – Helping Americans Prepare for Retirement: Increasing Access, Participation and Coverage in Retirement Savings Plans.  This isn’t the first time for this topic.  There were a few hearings on this in 2014. I’m not sure if anything is driving the renewed attention to this topic now.  While tax reform is challenging in an election year, this important topic seems good for any year.  There is a need for reform of the tax rules for retirement plans to make them more equitable and simple to help more people save for retirement. Read more

Retirement Plan Options For Small Businesses

According to the US Small Business Administration, small businesses employ half of all private sector employees in the United States. However, a majority of small businesses do not offer their workers retirement savings benefits.

If you’re like many other small business owners in the United States, you may be considering the various retirement plan options available for your company. Employer-sponsored retirement plans have become a key component for retirement savings. They are also an increasingly important tool for attracting and retaining the high-quality employees you need to compete in today’s competitive environment. Read more

IRS Releases Pension Limits For 2016

Saving for retirement is one of the most important things you should do. Even though retirement may seem far away now, that time will eventually arrive and you will want to be prepared for it with adequate savings. Contributing to tax-advantaged retirement plans while you are working is one of the best ways to build up a nest egg for your retirement years. That said, the tax law doesn’t allow unlimited annual contributions to these plans.

If you have been wondering how much you can contribute to your retirement plans in 2016, the IRS has released the inflation-adjusted limits for next year’s contributions. Since inflation has been low this past year (at least according to the government’s calculation), most limits won’t increase over what they were in 2015, but some of the AGI phaseout thresholds that work to reduce allowable contributions will change. Here’s a review of the 2016 numbers: Read more

Retirement Plan Distribution Pitfalls

When an individual retires or leaves an employer’s service, the individual will be required to take a distribution from the employer’s retirement plan (if the employer had a plan). Depending on the employee’s age and the plan’s terms, a distribution may not be required immediately, but when it’s time to take the distribution there are a number of tax pitfalls that can create some very big tax headaches for the employee. This article will explore those hazards and discuss how to avoid them.

First and foremost, if the employee does not transfer or roll the distribution over into another employer’s qualified plan or an IRA, the entire taxable amount of the distribution will be included in the employee’s taxed income for the year of the distribution. In addition, if the employee is under 59-1/2 years of age at the time of the distribution, the employee Read more

Don’t Forget Your Retirement!

Even though retirement may be years away, and it may not be the most pressing issue on your mind these days, don’t forget your retirement contributions, especially with generous government incentives involved.

There are a variety of retirement plans available to small businesses that allow the employer and employee a tax-favored way to save for retirement. Contributions made by the owner on his or her own behalf and for employees can be tax-deductible. Furthermore, the earnings on the contributions grow tax-free until the money is distributed from the plan. Here are some retirement plan options:

Simplified Employee Pension Plan (SEP). This plan was designed to avoid the Read more

Planning Your RMD And IRA Distributions For 2015

We spend most of our lives saving for retirement by putting funds away in tax-advantaged ways. But many of us forget about planning the withdrawals so that they are tax advantaged as well.

Although there are exceptions, retirement funds generally cannot be withdrawn until we are age 59.5. If taken out sooner there is a 10% penalty that applies in most cases (in addition there may be a state penalty).

A large number of taxpayers do not take distributions until they are forced to at age 70.5, not realizing they might benefit tax wise by taking money out sooner. For example, if you are in a low or zero tax-bracket this year, you can take a certain amount out with no or Read more

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