The passage of the Tax Reform and Jobs Act (“TRJA”) in 2018 made entity selection an important part of tax planning. The TRJA made fundamental changes affecting individual and entity tax rates. Combined with corporate transactions for strategic reasons and business owners acquiring interests in other companies, we’re seeing businesses and owners using multiple entities. … Continue Reading
The recent Department of Labor’s re-proposed Fiduciary Rule has generated many opinions on how it will affect fiduciary service models. One constant, however, cuts through all of the debate: the Plan Sponsor still has the fiduciary responsibility to select and monitor those service providers. But as you can see, there is a hierarchy of service … Continue Reading
As we near the end of the year, many business owners rush to establish retirement plans to capture calendar fiscal year tax deductions. If you’re one of those small business owners, you may also be eligible to receive a tax credit for expenses you incurred to implement your plan. What’s the difference between a tax … Continue Reading
A recent court decisions and the Settlement Agreement in a Department of Labor (DOL) enforcement action against an institutional ESOP trustee provide new guidelines for trustees and other ESOP fiduciaries involved in the purchase or sale of company stock. Bear in mind that all employee stock ownership plans (ESOPs) are set up to invest primarily … Continue Reading
In theory, employee ownership through an Employee Stock Ownership Plan (ESOP) is an almost perfect idea, since it benefits employees and businesses equally and simultaneously. Shares are allocated to, rather than purchased by, the employees, which puts ownership within the grasp of many who might never own a business otherwise. Employees have a strong incentive … Continue Reading
I’m a big NBA fan, and I love those time traveling Kia commercials featuring Blake Griffin, the All Star forward of the Los Angeles Clippers.He’s in his Kia Optima and says, "Kia, take me back to 1992." There he meets himself and learns valuable life lessons. I can also imagine time traveling. Not with a … Continue Reading
As planning opportunities continue to emerge from the American Taxpayer Relief Act of 2012 (ATRA), the increase in federal income tax rates and capital gains tax rates may make qualified plans more attractive to higher wage earners. According to a PwC HRS Insights report, there is more likelihood the compensation may be subject to tax … Continue Reading
Each year the Internal Revenue Service announces the cost-of-living adjustments applicable to qualified retirement plans for the following year. Unlike 2001 in which most limits did not change from the prior year, most limits increased: Following are the key retirement plan limits announced yesterday by the IRS: The 401(k) and 403(b) limit for employee contributions … Continue Reading
For a business owner choosing a retirement plan, it’s kinda like those compare and contrast essay questions on college exams. Except this time, it’s real life and a lot more complicated than the venn diagram pictured above. Fortunately, our friend Denise Appleby at her Appleby Retirement Dictionary has provided a handy and comprehensive chart comparing … Continue Reading
Most annual retirement plan limits are indexed to inflation; and because of the decline in the Cost of Living Index in 2009, many of the limits remained unchanged for 2010. Following are the key retirement plan limits for 2010 as announced by the Internal Revenue Service. 401(k) and 403(b) Deferrals: $16,500. Catch-Up Limit (Age 50 … Continue Reading
Form 5500 isn’t just transforming disclosures as our friend and fellow blogger, Bob Toth, explained in his post 2009 Form 5500 Schedules A and C Will Create New Fiduciary Burdens For Plan Sponsors. The reporting road will be also be different, and there will be red flags along the way. Here’s why.… Continue Reading
Bankruptcy cases increased approximately 35% for the 12-month period ending June 30, 2009 , according to statistics released by the Administrative Office of the U.S. Courts. The number of cases went from 967,831 to 1,306,305. These statistics call attention to one of the often overlooked aspects of a retirement plan – protection from bankruptcy. It’s … Continue Reading
Whether your preference is Sean Connery, George Lazenby, Roger Moore, Timothy Dalton, Pierce Brosnan, or now Daniel Craig, the James Bond character has been used in the longest running and most financially successful English language film franchise to date. The Bond movies started in 1962 with Dr. No. For us ERISA people, our Bond originated … Continue Reading
Every once in a while I’ll start to wander off into “Pensionspeak” when I’m talking to a client. And when I do, I’ll catch myself by remembering what one of our important business partners once told me when I started to get too technical. Or even technical at all depending on the audience. He told … Continue Reading
Remember that kids’ game, Animal, Vegetable, or Mineral? You had to guess into what category the object fell. Well, today in business, there is a similar question. Independent contractor or employee? But it’s not a game. The misclassification of a worker can have serious financial consequences. Penalties and interest involving payroll taxes can pile up … Continue Reading
The Tribune bankrupcy notwithstanding, ESOPs are doing very well in this country. Behind the headlines are the vast majority of sucessful ESOPs sponsored by closely-hald companies. You can follow what’s happening with ESOPs through two new blogs that have just come on-line. Employee Ownership Notes sponsored by The National Center for Employee Ownership Employee Ownership Blog sponsored by The Employee Ownership Foundation Hat Tip to Marc … Continue Reading
Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article that discusses one of the things it takes for business owners to be able to make retirement plan contributions. Check out Be A Park-Down-The-Street-Businessperson.… Continue Reading
A Risk Management Tool for Fiduciaries in A New Retirement Plan Environment Updated for the Pension Protection Act of 2006 (PDF) Introduction My last post was a year-end ERISA fidelity bond reminder. ERISA does not require liability protection; the only mandatory insurance is an ERISA Fidelity bond to protect the plan assets from losses due to misuse or … Continue Reading
See full-size image. Exit strategies for business owners – particularly the baby boomers – is a matter to which they are giving increased attention. And so are their attorneys. Yesterday I participated in a continuing education program sponsored by the Financial Insitution Committee of the Chicago Bar Association for its members on this topic. Our particular focus was ESOP … Continue Reading
It’s a global economy, of course, and most of us – irrespective of size – are doing business outside the U.S. In our case, we have non-U.S. company clients with employees here. So I’m always interested what benefits non-U.S. companies are providing their employees in the home country. I’ve posted before that employee ownership is … Continue Reading
Indiana State Treasurer Richard Mourdock announced last Thursday a new state program to encourage the formation of Employee Stock Ownership Plans (ESOPs) in the state. The new program, called Indiana’s ESOP Initiative (ICI), will invest up to $50 million in state money in Indiana banks that specifically lower their interest rates in loans made to … Continue Reading
It was 1982, and many of today’s baby boomers were listening to the song, “Should I Stay or Should I Go” that was on The Clash’s album, Combat Rock. According to NME, Mick Jones, the lead guitar on the song, wrote it about singer Ellen Foley, who sang the backing vocals on Meatloaf’s Bat Out … Continue Reading
