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.

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.

Cash versus Accrual: Let Our Rochester CPA Assist in Your Choice

The qualified Rochester CPA we will assign to your business as an independent accountant possesses the appropriate education, training and work experience in the related fields of bookkeeping, accounting and auditing. As such, he will be able to provide his professional – read: educated and informed - opinions on various matters in this regard.

One of the most important aspects of his work is providing guidance on the best accounting method to use – cash versus accrual. All other aspects of bookkeeping, accounting and auditing as well as compliance with business laws will be affected or influenced by your final decision on it. Let’s take a closer look at the pros and cons of both accounting methods, which our Rochester accounting firm can be of valuable assistance.
Basics of the Methods

Keep in mind that the Rochester CPA assigned to your business has comprehensive knowledge of both types of accounting methods. Don’t hesitate to ask questions because the more you know about the methods, the more effective you will be able to use it in your business. Let’s start with the basics.

In cash accounting, cash outflow and cash inflows are recognized as recordable transactions as soon as the money changes hands (i.e., from your business to the supplier or from the customer to your business). As such, sales made without cash payments (accounts receivables) are not considered as income in the same way that expenses made without cash payments (accounts payable) are not recorded as expenses on the books of accounts.
In accrual accounting, the transaction including receipt of income and payment of expenses are counted regardless of whether cash and other assets actually exchanged hands. Income is recognized when sales are made and expenses are recorded when these are also made. Your assigned Rochester CPA will usually recommend this method for compliance with existing laws, rules and regulations on the United States including its tax laws.

Impact on Tax Planning

Your choice between cash and accrual method of accounting will affect your declaration of taxes. Keep in mind that you want to minimize your declared income and/or maximize your declared expenses in the year when your estimates point to the highest income. The result: You will pay lower taxes without being slapped with an IRS complaint.

Tips that the Rochester CPA may provide on this matter:

• For cash accounting - Ask your customers to pay their accounts during the year when you plant to take in the highest income. Pay your bills during the year when your estimates point to the highest income, thus, allowing for higher deductible expenses and lower taxes for the year.

• For accrual accounting - Send out the bills for your customers’ account receivables before the end of the present fiscal year or after the beginning of the succeeding fiscal year; decide the year when the income should be recorded. Ask the vendors to send you their bills for your accounts payable in the year when your financial plan demands the highest expenses.

Are you confused by now? Don’t be. That’s where you can turn to our Rochester CPA in particular or our Rochester accounting firm for professional assistance. for more inquiries please click here

How CFO Outsourcing Can Boost Your Business

In today’s economy, more of the smaller companies are now being faced with the same financial challenges that were once reserved for larger corporations. Sometimes this is the struggle of shutting down doors and unloading assets. In other cases, it is a sudden growth that that needs to be capitalized on. In both  scenarios, CFO outsourcing can be useful. When hired through a Rochester consulting firm, you will have access to an experienced individual who will remain dedicated to taking your business to that next level.

One of the most common reasons people turn to a Rochester consulting firm to handle their CFO outsourcing needs is money. While these companies need the experience of this viral roll, there isn’t often enough cash flow to justify the costs that come with filling a full time position. When outsourced, the company is only charged with the time that is spent helping them directly.

With the professional in place from the CFO outsourcing company, they will begin to go over the financial statements of your business. In many cases, this person will be a Rochester CPA who will look for incomplete or inaccurate data and then fix it quickly. The result will be that your financial information is up to date, while ensuring it meets the current accounting standards that are in place. With this information done, you can move on to the financial decisions that will impact your business.

As soon as the complete financial statement is available, banks and vendors can receive copies of these statements to determine if credit can be issued for you. Knowing that the records are accurate, you are getting a realistic picture of what is available to you. Some companies may also be willing to raise your limit, as they have more faith in your bookkeeping practices, knowing that a professional is handling them.

Another benefit that can occur when you utilize these professionals is that you can determine if any theft or fraud is taking place in your company. The unfortunate truth in a small business theft of a variety of things happens all the time. This includes lists of customers, cash, inventory and everything else. With the CFO going over your records and keeping track of things, you will be able to find a problem right away and this professional can help you to tackle the concern before it becomes a bigger issue.
  
You are going to find that there are some great Rochester consulting firms that will be able to help you take your business to the next level. Just make certain you keep these essential points in mind and do what you can to motivate you to take the next steps and begin working with a professional CFO for your company.

Your Accountant Can Do More than Taxes and Crunching Numbers

When most people walk into any Rochester accounting firm, they are only interested in having their books done. This can be just basic bookkeeping, or tracking assets for several companies. In some cases, the Rochester accountant may even be hired to do a simple audit for a company.

But there is so much more that this professional can do for you. You might not realize this, but beyond your basic finances and tax planning, this professional will be able to help you with more areas of your business.

Most professionals working in a Rochester accounting firm will have a great deal of knowledge and expertise in the world of business. Since the industry standard is a Master’s in Business Management Accounting, they are going to know more than just how to run the book. In fact, the time that they have spent in colleges learning this information usually gives them a good eye that can help you through some of the other situations your business is going through.

In fact, business plans and even a business succession plan can be handled by your Rochester accountant. They can even help you to go through the process of forming partnerships, trusts, estates and other legal elements that you might not be able to do on your own. Thanks to their understanding of business and tax law, you can have some peace of mind in knowing this is being done properly.

Even when your company is face is a bankruptcy, this team of professionals is going to be able to guide you through the steps, to ensure that your best interests are kept and that your company is left with options that could result in it eventually being saved. This comes from understanding and deciphering the details of the local and federal laws and knowing what your options are. While you could do this on your own, the accountant is going to end up being your best choice.

No matter what Rochester accounting firm you choose to handle your tax planning, audits or even business assistance, it will be important that you do ensure that they are certified to help you. An example would be a Rochester CPA, as they have the right knowledge and tools available to them, to help ensure that they are giving you the best guidance possible.

Remember, this is your business and your life that is going to be impacted. Make sure you take a moment to ensure that you are hiring the best. What you will find is that the area offers a variety of professionals who have different levels of experience you can choose from. It is important you choose the most qualified individual that you feel comfortable around as there is a good chance you will be seeing a lot of each other.

Getting the Most Out of a Trip to the CPA

No one would ever list a visit to a Rochester CPA as being the most enjoyable experience. Seriously, not all that many people will connect a visit to an accountant's office as being something that can be deemed adventurous. Then again, we can amend that statement somewhat. The excursion to a Rochester accountant can end up being really adventurous in terms of making the entire process of making sense of your tax and business information in a veritable high seas adventure loaded will all the twists and turns of an old pirate movie.

Do you really want things to turn out like that? You probably do not and for good reason. Chaos and confusion at the office of a CPA does not exactly contribute to getting the most out of the session. Instead, it lays the foundation for creating more problems for yourself. A Rochester CPA can only do so much. You have to do your part and be responsible for making the meeting with the CPA as productive as possible. Setting Up the Right Meeting The best way to get the most out of the meeting is to set the right one up and make it targeted and focused. When you set up an appointment with a Rochester accountant to file your taxes, you should remain clearly focused on the subject of taxes. You do not want to be jumping around to other areas of business unless the meeting with the account is long enough to adequately do so. Trying to cram too many matters into one single meeting is not going to be productive. As such, setting up a single session for a single topic is well advised when traveling to a Rochester accounting firm.

Being Thorough and Prepared During the Meeting, A Rochester CPA will be at a great disadvantage when the time comes to help you if you are not properly prepared for the meeting. This means you should bring all your 1099's, receipts, ledgers, and other vital documents. Your accountant will need to have all that information in front of him in order to make accurate assessments. Of course, all of these documents must be presented in an orderly way. You cannot just throw them all in a folder and hand them over hoping the accountant will make sense of it. That is not the most helpful strategy to follow. Offering thorough and well organized documents will be the only way you can be sure your CPA can do his job to the best of his ability.

Be As Honest and Forthright as Possible A common mistake clients will make with their accountants is they will not be honest in their dealings. They might not tell their CPA the full extent of their fiscal worries, problems and woes. This is not usually done for the purpose of being deceptive. Rather, it is done because there are feeling of embarrassment over having committed fiscals errors such as not filing taxes, getting heavily into debt, and so on. Such an attitude is a really bad one to have. It would be like not telling the doctor all that is wrong with you because you do not want to be diagnosed with a disease. The truth here is you still would have the disease and you are making it impossible to be treated. Similarly, when you visit a Rochester accounting firm, it you are not being forthright with your Rochester CPA, you will not be taking the necessary steps to fix your fiscal woes.

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.