Blog & Newsroom

Posted by: Howard J. Kass, CPA, AEP®

Posted by: Gary M. Sigman, CPA, MTax, PFS

The IRS recently announced 2014 inflation adjustments for several key tax provisions including the following: 

Posted by: Colleen Kaminsky, CPA 

Posted by: Colleen Kaminsky, CPA

The Internal Revenue Service just issued a Revenue Procedure revising the scope of the IRS letter-forwarding program: the IRS will no longer forward letters on behalf of plan sponsors or administrators of qualified retirement plans (including qualified termination administrators of abandoned plans), who are attempting to locate missing plan participants and beneficiaries.

Diversification is the cornerstone of a solid investment portfolio.  Until the mid 1990’s, when stocks started producing extraordinary profits, most investment advisors recommended a balanced portfolio with a mixture of stocks, bonds, and precious metals.  Stocks provided the opportunity for growth, bonds produced income and precious metals protected against inflation and financial chaos because gold and silver prices have typically enjoyed an inverse pricing relationship, when compared to stock prices over the long run.

A self-employed individual’s compensation for retirement plan purposes is based on his or her earned income. In brief, earned income is net earnings from self-employment (NESE) and can be derived from a sole proprietorship, single member LLC or an entity taxed as a partnership in which the individual’s services are a material income producing factor).  A plan then deducts from NESE (1) the IRC §404 deduction for retirement plan contributions for the proprietor, member or partner, and (2) one-half of the self-employment taxes (SE Tax) the individual pays.  This process is designed to put  unincorporated businesses on an even footing with corporations. Corporations are permitted to deduct the company’s share of social security tax (FICA), which is one-half of the total FICA paid.

Most plan administrators and plan sponsors find participant loans to be a significant administrative challenge. To reduce the administrative burden and to make the loan program more cost effective, many 401(k) plans include provisions: (1) requiring payroll deduction to repay the loans, and (2) limiting the loans to active employees.

The Supreme Court’s recent decision in the case Cigna v. Amara sent a very important message to all plan sponsors/employers regarding the importance of maintaining their retirement plan documents, including the required summary plan descriptions and summary of material modifications (as applicable).