Setting up and maintaining a simplified employee pension (SEP) is probably easier than you think. The sooner you get started saving, the more secure your retirement will be, plus your business can gain tax advantages right away. Read more
Among them are that independent contractors:
- Can be hired on a per-project basis and let go when the project is complete,
- May be more experienced workers who want to maintain a degree of independence and don’t require the supervision that is necessary with employees, and
- Don’t have to receive fringe benefits or workers compensation.
Smart company owners and executives obtain business interruption insurance — and possibly contingent business income coverage if the operation relies heavily on outsourcing or a particular supplier. The idea is that the policy will compensate the company for lost earnings if a devastating event forces it to temporarily close down.
But the calculations and coverage of business interruption policies is complicated and mounds of paperwork are often required to support a claim. To make matters worse, most policies don’t specify exactly what support documents are required and it isn’t uncommon for claims to be denied. Read more
Just as having an outside expert prepare your company’s tax return doesn’t get you off the hook if you have problems with your financial systems, using professional retirement plan administrators and investment advisors doesn’t absolve you of responsibility for complying with IRS regulations.
Where problems typically crop up, according to Monika Templeman, IRS Director of Employee Plan Examinations, is when “there’s a communication gap between you and the plan administrator about what the plan document provides and what documentation is needed to ensure compliance.” The following are the most common communications breakdown-related mistakes her department uncovers in audits, as described on an IRS webpage on the importance of internal control systems: Read more
Commuting can be a nightmare for employees. Your company can help by offering your staff members some financial relief from their commuting hassles.
Employees appreciate this benefit and there’s a bonus for your company: You can save money on payroll taxes. Similar to a cafeteria plan election, staff members can have money deducted on a pre-tax basis to be applied toward the transportation benefits. Both the company and the employee avoid payroll taxes on the salary reduction. Read more
Question: We would like to amend our 401(k) plan to exclude all part-time employees from plan eligibility. Our plan requires an employee to complete 1,000 hours of service in a 12-month period before becoming eligible to participate in the plan, but we want to exclude part-time employees regardless of their hours. Can we do this?
Answer: The short answer is no, if you intend to exclude part-time employees based on their job classification as part-time, not their actual hours. Here’s why. Read more
These days, anyone looking to form a new business relationship — especially one that involves credit — is wise to check out the risk involved first.
Various parties might be checking out your company’s credit rating to determine whether they want to do business with you. That’s why, just as with your personal credit report, you need to be on top of what is in your business credit file. Read more