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.




 

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!