Dealing with Late Deposits on 401(k) Plans

As the plan sponsor for your employees’ retirement benefits plan known as the 401(k), you have the fiduciary responsibility of ensuring accurate and timely deposits of the contributions, loan repayments, and other withheld deductions related to the plan. But what happens when you have been remiss in your fiduciary responsibility? Here are tips from a trusted Rochester CPA in dealing with said late deposits.

Know the Requirements

The first step is to know the general requirements for 401(k) plans in terms of the timing of their deposits. The date of deposits depends on the number of participants such that:

• If you have fewer than 100 participants in the plan, the employees’ contributions and loan repayments should be deposited by the 7th business day after the pay period pertaining to the amounts withheld.
• If you have 100 or more participants in the plan, the deposit must be made either on these two dates, whichever is earlier - (a) the date when the withheld amounts can be segregated from the assets of the business; or (b) the 15th business day of the month after the pay period pertaining to the withheld amounts.

Ask your trusted Rochester CPA about possible exceptions but the above mentioned rules apply to most plan administrators. Keep in mind, too, that a few 401(k) plan vendors will send reminder about late plan deposits but said reminder are usually worded in such a way as to exclude all fiduciary responsibility on their part. You, as the plan administrator, must assume said responsibility.

Keep Records

In most instances of late deposits, you have the option of self-correcting the issue by making the deposits and then calculating the lost earnings caused by the late deposit not being invested in a 401(k) plan. You will not be required to file the necessary paperwork with the Department of Labor and/or with the Internal Revenue Service especially when the late deposits pertained to just one to two payroll cycles. You must, however, keep records of your actions as future reference for audit work by an independent Rochester accountant, for example.

Kick the Problem

As your trusted Rochester CPA will say, a late deposit should not be cause for concern but you should kick the problem, so to speak, as early as possible. Always remember that one or two late deposits are mostly inevitable considering human nature. But when such tardiness becomes chronic, remains unresolved for several payroll cycles, and/or becomes fraudulent in nature, you will have problems with government authorities on your hands.

Why? Late deposits can trigger audits by the DOL and/or IRS, which can lead to sanctions including penalties. The DOL will determine whether the 401(k) plan deposits were accurate and timely often by looking at the earliest possible date that you, the plan sponsor, could have made the deposits but did not. This is where your meticulous records come in as well as your valid explanation for the missed deposits.

Your best plan of action: Consult with your trusted Rochester CPA about the appropriate methods to kick the problem even before it becomes an audit trigger. Keep in mind that not only will your company be subjected to a DOL audit but you may be penalized by the IRS in the form of excise taxes.

What Should I look for in a Rochester Accountant?

Someone you can openly communicate with and that will be there for you is important when it comes to selecting a Rochester accountant. While you want to work with a company that has a good clientele, make sure they also have time for you. It can be frustrating when you feel they are too busy to answer your questions and to give you the personalized attention you need for your account. Make sure they have core values and ethics in place so that you aren’t going to compromise yourself or your business by working with them.

Not all Rochester accounting companies offer the same services. A common mistake though is just assuming that they do. Some of them offer very basic series and a broad spectrum of choices. Others though are more specialized and they handle the very complex types of tax issues or business needs that can develop. There is so much more to these businesses than just Rochester taxes that is for sure!

For example, some of them offer CFO outsourcing services. This may be a concept that could work very well for your business. Yet you weren’t even aware that it was a possibility. With the creative elements in place as well as advanced technology, it may surprise you just what they can do for you.

Your own methods of communicate and style of tax planning that you are comfortable with will also influence who you work with. While a Rochester CPA can provide you with options, in the end you have the final say. Not only about who you will work with but the type of strategy that they can implement for taking care of your account.

Always take the time to make sure you have the right Rochester CPA in place. If you are looking for one, make sure you evaluate plenty of options before you make that final decision. You have too much at stake to make a rush decision. If you already have a CPA, but you feel that they aren’t really meeting your needs, it is time to change.

The process of Rochester consulting is worth looking at. This will take some time but it is a good investment overall. It allows you to talk face to face, at no charge, with various accountants in the Rochester area. There is no obligation to hire them and it is considered one of the best methods for evaluating who will rise to the top of your list.

Prepare for Rochester Consulting Sessions

One of the best ways to find a Rochester CPA that is perfect for your needs is to talk to several of them. Spend some time compiling a list of possibilities and then check them out online. You need to explore their features offered to make sure they are a good match for your personal or business needs.

Next, you need to find out their rating with the BBB and also what other clients have to say about them. Only select those businesses that have a BBB rating of B+ or higher. This means that they are excelling in their line of work and that works to your advantage. Read the various reviews from clients to find out about the pros and cons of a given business.

For those that seem quite favorable, write down their name and phone number. Then you can get in touch with them for an appointment. Ask about Rochester consulting which should always be free of charge. With the consulting, you need to be prepared for it so that you get all you can out of the session. If you go in and waste time because you don’t know the direction to take all of it, then you will get very little value out of it.

Show up with a list of questions that you have about tax planning, Rochester taxes, and other details. Use this same list of questions at each of the Rochester accounting firms you consult with so that you can compare answers. It is fine to jot down some notes too while you are in that meeting, they won’t mind at all.

It is acceptable to ask questions about their areas of expertise, experience, and their ethical behaviors. You need to know that the Rochester accountant you hire is going to be exceptional in all matters for you. Knowing you can count on them to be honest, efficient, and to be affordable will give you peace of mind.

If you are interested in CFO outsourcing, ask if they offer it. Not all accounting locations do but more of them are including it. If they get asked about it enough, they will consider adding it to keep customers happy and to help them secure new clients. The demand for services is very powerful when it comes to determining what services stay, what goes, and what is added.

You may wish to bring along some documents with you to show the CPA during the consulting session. They can even answer some specific questions about them for you. Communication is important so be open about what you need, what you expect, and don’t leave without answers to your questions.

Of course there will be those entities that talk in circles and don’t give you effective answers. Just mark them off your list because you don’t want to settle for a company that operates in such a manner. Not when there are so many better choices for you in the Rochester area that will do all they can to get your questions answered. They want to help, not make more issues for you.
Make sure you thank them for the time they gave you to talk. Take as much time as you need to make up your mind about who you will work with. When you make that call to move forward, you will already know what you can anticipate from that relationship.

Why Hiring a Rochester Accountant is a Smart Move for a Business

Most business owners or entrepreneurs are familiar with what a Rochester accountant does. They likely realize hiring an accountant can ensure issues related to their books and their taxes can be made much easier. That said, not everyone may be sure when the time is right for them to hire an accountant. There are a few factors that will come into play dictating the time to hire an accountant is on the horizon.


If you are seriously concerned about your own problems with errors and inaccuracies, then hiring an accountant might be among the most important steps you could take. No one is perfect and accounting can certainly be hard job to perform without error. This is true even when someone has a lot of experience with the job. Imagine how hard it can be when you lack experience. Rather than find yourself in a tough situation where you run the risk of committing pronounced errors, it would be a much better strategy to turn over such tasks to an accountant. Even if only a partial amount of the tasks are handed to an accountant, solace can be taken in the notion the work performed is done so with a lesser chance of error.


Anyone that has become overwhelmed with other responsibilities may wish to hire a Rochester accountant. When a business becomes enormously busy, this is a good thing. However, there can be certain drawbacks such as the inability to juggle all the tasks required and also the inability to be timely with every tasks. Certain responsibilities that do not seem pressing at the time can end up being passed to a later date. This can create an accounting nightmare. Rather than end up in such a position, it would be much better to hire a professional accountant to take on some of those tasks.


The business is starting to grow at a rapid pace. Again, there are quite a number of fruits to success and there are also issues of serious concern. When a business is enormously successful, this means it will be growing. More and more employees are hired. More revenues come in. More expenditures are absorbed. Nothing is inherently wrong with any of these factors. McDonald's went through the same growth process in the 1950s. Of course, such growth does lead to enhanced accounting requirements and anyone that is interested in staying on top of all growth related responsibilities is well advise to speak with a Rochester accountant.


Anytime serious changes in the tax laws occur, hiring an accountant to advise the business form that point forward would be a wise move. Often, by knowing how the law effects you from day one will contribute to avoiding a lot of unnecessary hassles when tax time actually arrives.


In truth, any time you seriously feel working with an accountant would be beneficial, it is advised to contact one. Doing so can save an entrepreneur from an enormous number of headaches.

Inherent Characteristics of A SIMPLE IRA Plan

Tax planning is a long drawn process. However, this does not mean that it has to run throughout the year. In fact, in order to avail most tax benefits, a business needs to ensure that it has everything pertinent in place well in advance. This is exactly what we, as your chosen Rochester CPA, look to do for your business. There are various instruments that we try to use to get you the maximum Rochester taxes benefits. However, which ones fit your business depends entirely on the key nature of your business.



One of the instruments that we recommend for businesses looking for tax planning is the SIMPLE IRA plan. Here are some key characteristics of the SIMPLE IRA plan that should be of use to you.

1. Size of the business matters:

The first thing you need to know about the SIMPLE IRA plan if you are in the midst of tax planning is what any Rochester CPA would tell you. This is that the SIMPLE IRA is only limited to those companies whose employee strength does not exceed 100. This means that you can only avail the SIMPLE IRA plan if your business employs 100 or less than 100 employees.

2. Adopting the SIMPLE IRA plan:

If you know that your business meets the prerequisites then all you need to do is contact a Rochester CPA like us and ask them to set everything up for you.

We would ensure that you get the Rochester taxes benefits by choosing whether a Form 5304-SIMPLE, 5305-SIMPLE or a SIMPLE IRA prototype suits your organization the best. Subsequently, we would help you establish it.

3. Two forms of contributions:

There are two ways through which you can contribute in a SIMPLE IRA plan. You should note, however, that your benefits in terms of Rochester taxes would remain the same, regardless of your choice. Your choices would be between a matching contribution of up to 3 percent of the employee’s salary and a 2 percent contribution for each employee which would be non elective.

4. Mandatory exclusivity:

Establishing a SIMPLE IRA plan means, however, that you cannot partake in any other retirement plan. Effectively, this is something that needs to be assessed. This is also a stage of tax planning where you need our help as your Rochester CPA.

Basically, in our capacity as your Rochester CPA, we would assess whether the Rochester taxes benefits you would get from a SIMPLE IRA plan would be enough for your organization by themselves or not.
If we find during the tax planning procedure that you need more Rochester taxes deductions and exemptions then we would not recommend the SIMPLE IRA for you. In either case, expert guidance from an experienced Rochester CPA is something you should look for.




 

Thinking of Retirement? Let the Best Rochester Accounting Professionals In On It

Retirement is a milestone in your life because you will transition from full-time employment to non-employment with your source of money coming from your retirement funds. Said funds should ideally come from several sources like the 401K, income from investments in certificates of deposit, marketable securities and rental properties, and perhaps from investments in businesses. Just before you retire, however, you must hire the best Rochester accounting professionals to impart their expert knowledge on all financial matters related to retirement.

Planning for Retirement

Yes, it can be difficult planning for your retirement when you are in your thirties and forties but the earlier you start on it, the better. Keep in mind that the longer you are able implement your retirement plan, the lower the amounts set for your retirement fund and the higher the amount you can save. The best Rochester accountant will provide expert guidance on your retirement planning especially in terms of choosing the best pension plan, insurance plan, and investments. Your specific circumstances, goals and needs will be taken into account with the result being a customized retirement plan with specific actions and recommendations.

Dealing with Tax Issues

Highly qualified Rochester accounting professionals know that the transition from full-time employment to retirement has tax implications. Your income tax bracket and, thus, your personal exemptions and allowable deductions will change, for example. Yes, you can still prepare your own tax forms but you are well advised to hire a qualified Rochester accountant, nonetheless, for your own protection. This is especially true when your financial affairs are becoming complicated. For example, your sources of income are not from employment but from investments in the stock market, in local businesses, and in bank deposits. You may also be planning to pass on an inheritance, make charitable donations, and relocate to another part of the city, all of which will require careful planning in terms of tax implications and financial consequences.

Tackling Debt Issues

In an ideal world, you should have little to no debts when you retire but since we live in the real world, this is not possible all the time. This is where Rochester accounting professionals will also come in – helping you in the management of your debts in your retirement years. For example, if you have a mortgage at the time of your retirement, you may be tempted to pay it in full from your retirement account. Your accountant may likely recommend paying off your mortgage on a regular schedule instead of touching your retirement fund or tax-deferred accounts.

Making a Budget for Living Expenses

This is probably the most important service that Rochester accounting professionals can offer soon-to-be retirees. Since you will be solely relying on your retirement funds instead of your regular salaries, you must set a budget for your living expenses and then stick to it. Your accountant will be of valuable assistance in evaluating your sources of income in relation to your essential expenses to come up with a realistic budget, which should enable you to enjoy a good quality of life.

If you are ready to do so, you can also rely on the best Rochester accounting professionals for drawing up your will. It will definitely clear out plenty of issues when it comes to your assets while you are still enjoying life on earth.

Your Rochester Accountant and You During Your Retirement Years

Many articles have been written about retirement especially on the front end – planning for retirement – and on the back end – transferring assets at the twilight of one’s life. This is not one of those articles. Instead, we will be discussing the middle years of retirement when your living expenses are sourced almost solely from your retirement fund as well as the roles of your Rochester accountant at this time of your life.


Budgeting Your Assets

Building a good professional relationship with the most trusted Rochester CPA before your retirement years is a must. This is because the management of cash flow during retirement can spell the difference between living well and living not so well from 65 years old and onward. Keep in mind that you will most likely be withdrawing from your retirement fund instead of adding to it through full-time and part-time employment so budgeting is of utmost importance.

Cash flow during retirement is affected by changes in taxes (cash outflow) and salaries, interest income and dividend income (cash inflow). You must discuss with your accountant the best ways to budget your retirement assets, both in the present and future, so that you can, indeed, live well. Your Rochester accountant will also discuss the effects of your retirement fund withdrawals on your tax burden. With his expert guidance, you can plan the withdrawals over a number of years and then plan for the tax burdens so that the latter are not so onerous.


Making Housing Decisions

Housing decisions have tax implications so it is important to consult with atrusted Rochester CPA before deciding on your relocation plans. For example, if you have a mortgage on your home, your accountant will recommend payment of the monthly amortization as is. Paying off your mortgage from your tax-deferred funds and retirement accounts is inadvisable because of the burdensome tax implications. But each individual’s circumstances upon retirement is unique so whatever works best for your friends may not necessarily work in your favor. Your consultations with your Rochester accountant come in handy.


Protecting Your Assets

This is probably the most important aspect of retirement that your accountant can provide expert advice on. Asset protection – your assets, to be exact – is a must if and when you want to enjoy your retirement years since without your assets (i.e., cash in bank and on hand, marketable securities, real estate property) to live on, you will have no resources to cash in on. Plus, there’s also the matter of choosing the best options for your retirement-age investments. Your Rochester accountant will outline your options such as annuities, certificates of deposits, and marketable securities, present the numbers, and then assist in making the actual investments.


Looking Out for Healthcare

This may seem like a long shot for accountants to get involved in but you should consult with your accountant on this matter, too. Your healthcare premiums as well as costs for regular medical visits and hospitalizations will affect your short-term and long-term budgets, aspects of retirement that your accountant will be able to help, too.

Indeed, your retirement years will be better if and when you can work well with your Rochester accountant. Do so now!

Planning can Reduce Risks for your Business

Any business you own is going to have risks. Limiting the number of risks is the important factor. There is no need to have senseless risks flooding your business. You have probably heard the saying that having more than one pair of eyes is better. It is true in almost everything including running your own business. Your company can definitely benefit from an expert looking from the outside in, while you look at it from the inside. This is where Rochester consulting can be beneficial. A consultant with a Rochester CPA firm can be on hand to help you with financial and tax planning.

CPAs are experts in the financial realm from everything involving taxes to gaining financial assistance for businesses. The right Rochester accountant can offer you financial assistance services in which they help you draft your business plan, fill out the bank applications, and help you choose the best local bank based on their relationships with them as well as what your business needs.

You may have a business plan which you wrote three years ago. Is it on target? Did you reach the goals you specified or perhaps something changed taking you in a new direction? It is a good rule to look at your business plan each year to determine what needs to change. Planning is all about looking at where your company is at and where you want it to go, based on your current situation.

When you analyzed your accounts including retirement and expenses was something costing you money? Perhaps you see a loss where you thought there would be a profit? Your Rochester CPA can help suggest some changes to your business for better profit. They are not experts in all businesses, but they can look at your financial spending to determine where you might be able to modify things, thus lowering your current risks.

Through Rochester consulting your advisor has the ability to examine your business each quarter. They look for the profit and loss you experienced. Perhaps you decided to purchase new equipment thus lowering your savings, which created an issue when your sales lowered due to a seasonal issue such as a slower tourist season in your area. The expense you created might have been better suited towards the end of the quarter or next year. Do not look at this in a negative way or that everything in a business would have a negative effect. It is just an example of why planning can be a help to you. It could go another way in that you made a purchase, which helped increase your business therefore as a positive move it lowered your risk. You can now look at what happened, expected or unexpected, and decide if your current plan can be revised for the rest of the year. Adding in another perspective from a financial advisor such as your Rochester accountant often helps put another opinion on the situation. Playing devil’s advocate can sometimes be the best way to see the whole picture too.