Many small employers want to offer their employees the opportunity to save for retirement but are unsure of how to go about setting up a retirement plan. In this article, we’ll explore three options that are widely used by small businesses: payroll deduction IRAs, SEP plans, and SIMPLE IRAs.
According to the IRS web site – 401(k) plans represent the largest retirement plan market segment and have a significant impact on the health of the private retirement system in America. Employee Plans Examinations, previously conducted a baseline study of 79 market segments, and the findings indicated that 401(k) plans are by far the most non-compliant plan type in the retirement plan universe.
In an effort to improve plan compliance the IRS is sending a questionnaire to 1,200 randomly selected 401(k) sponsors that filed a form 5500 in 2007. The questionnaires were designed to assess compliance with retirement plan regulations. Plan sponsors who receive a letter will complete the Questionnaire by accessing a special Web site.
A provision of the recently enacted Patient Protection and Affordable Care Act provides a Small Business Healthcare Tax Credit. The tax credit is retroactive to January 1, 2010, and applies to certain not-for-profit entities.
The credit is designed to encourage smaller not-for-profit entities with low to moderate income employees to provide health care coverage for its employees. While the eligibility rules restrict the credit to relatively small organizations with low to moderate wages, the credit can be significant and possible allow the organization to provide health care benefits when it might otherwise be unable to do so.
The answer is no for 2010, but yes, in practical terms, for 2014 and beyond. The health care reform package (the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010) does not require individuals to carry health insurance in 2010. However, after 2013, individuals without minimum essential health insurance coverage will be liable for a penalty unless otherwise exempt.
The Department of Labor is moving to electronic filing of all Form 5500s starting January 1, 2010. Electronic filing is mandatory. They will not accept paper filings for plan years beginning after January 1, 2009.
Yes, but only for a limited time. In late December 2009, Congress passed the 2010 Defense Appropriations Act (2010 Defense Act). The new law temporarily extends the eligibility period for COBRA premium assistance through February 28, 2010 and the duration of the subsidy for an additional six months (up to 15 months).
Employees can elect to make voluntary contributions from their salary to certain retirement plans. The type of plan may depend on your employer. Many employers maintain cash or deferred arrangements — 401(k) plans — as part of their defined contribution retirement plan. State and local governments can maintain “457″ eligible deferred compensation plans.
There is an interesting new rollover opportunity that’s coming up in a few months. After 2009, you will be able to roll over amounts in qualified employer sponsored retirement plan accounts, such as 401(k)s and profit sharing plans, and regular IRAs, into Roth IRAs, regardless of your adjusted gross income (AGI). Currently, individuals with more than $100,000 of adjusted gross income as specially modified are barred from making such rollovers.
I think these initiatives are great! Anything that will allow people to put more into their retirement plans and save on current taxes is a good idea in my opinion.
Congress’ summer recess has been anything but quiet, as lawmakers address concerned Americans throughout the country at town hall meetings on controversial health care reform. A number of health care reform proposals are on the table, as well as revenue raisers to pay for those reforms.
