Contributory Retirement Plans: What You Need to Know About Late Remittance

It’s pay day!  Your gross pay every two weeks is $1,000, but somehow you only end up with $700.  The government has taken their cut, health insurance premiums have been withheld... and some of us are putting a few dollars aside for retirement

We have a deduction labeled “401k” on our check stub.  It’s our contribution to our retirement savings and in a perfect world, the money that is being withheld would show up in our 401k accounts as an increase in our investments on the same day we receive...

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Tax Deductible Expenses: Has the IRS Changed Positions on Bonus Accrual Deductions?

Many employers have formalized annual bonus programs for key employees; these arrangements typically award a bonus if employees reach specific targets. As employers cannot always determine if the targets have been met until after the year is over, it is common for an accrual basis employer to pay a bonus to an employee after year-end. 

Employers can pay the bonus after year-end and still deduct it on the prior year’s tax return if the program satisfies all three requirements of the “all events...

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IRS Modifies Flex Spending Account Rules for 2014

Many employers offer employees a flexible spending account (FSA) benefit as part of their cafeteria plan (operated in accordance with Internal Revenue Code Section 125) that is part of their overall employee welfare benefits plan. FSAs allow employees to contribute up to $2500 per year on a pre-tax basis which can be used for approved types of medical expenses that are not otherwise covered by insurance.

One of the downsides of an FSA from the employee’s standpoint is the "use it or lose it"...

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How to Avoid Department of Labor Audits of Your Qualified Plan

I recently attended a conference of pension plan professionals, and one of the topics of conversation was the Department of Labor's (DOL) increase in examinations of tax qualified retirement plans. The DOL can wreak havoc on a tax qualified plan in many areas, including the assessment of civil penalties on the plan, the plan sponsor, and responsible persons at the plan sponsor. Sometimes these can lead to criminal prosecutions. Plan examinations are often time consuming, expensive to conduct,...

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Your Summer Disney "Business" Trip: What Can You Deduct?

The category of travel expenses is one of the most common type of business deduction and also one of the most confusing.  Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You cannot deduct expenses that are lavish or extravagant or that are for personal purposes.

There are generally two reasons an employee/business owner may incur travel expenses.  Traveling away from home because your duties require you to be away from...

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Department of Labor Amnesty Updates for Deliquent Filers

Recognizing that many employers were unaware of their responsibility to file an annual return for various types of retirement and welfare employee benefit programs, the Department of Labor (DOL) created the Delinquent Filer Voluntary Compliance Program (DFVCP) in 1995.  DFVCP allows an employer who has not filed required Form 5500s to file all required Form 5500s for a particular program at one time, and pay a reduced one-time penalty.  The penalty amount will vary depending on the number of...

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Accounting Insights (Part 1 of 2) - Accounting Rule Changes: Effective for 2012

There are several new accounting pronouncements as well as significant proposed changes for 2013 and beyond.  There are also some “hot topics” in the areas of auditing and reporting that you should consider.

Fair Value Disclosures

Financial Accounting Standards, issued by the FASB, now require nonpublic companies to make some additional disclosures for calendar 2012, principally in the form of a discussion of the valuation process and certain quantitative details involving Level 3 investments. ...

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Benefit Plan Audits - How to get it right to avoid stiff penalties

If your company has a benefit plan such as a 401(k) with 100 or more eligible participants, each year you are required to have an audit performed on that plan that is filed with the IRS and the Department of Labor (DOL). Failing to do so could mean major penalties for your business.

What often happens is that a company gets to that 100 employee mark and it is not aware of the requirement.  A few weeks before the deadline, the company that is preparing the required Form 5500 for all benefits plans...

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Tax Advisory Insights: June 2012

This issue of Tax Advisory Insights includes the following articles:

What Are Your Chances of Being Audited?

By Galina Velcheva, CPA, MT

Earlier this year the IRS issued its annual data book, which provides statistical data on its fiscal year (FY) 2011 activities. The data book provides valuable information about how many...

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Employee Benefit Plan Fraud - Where to Look & What to Do

There are several areas of an employee benefit plan where employees or plan sponsors have the ability to commit fraud.  The following are key areas where an employer should focus when reviewing their plan.

Contributions

Contributions are one of the most susceptible areas of the employee benefit plan.  The payroll clerk or HR manager could have the ability to divert more deferrals or another employee's deferrals into their own account.  Additionally, the plan sponsor may not be remitting the...

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