retirement - Linkenheimer LLP CPAs & Advisors

IRS Extends Some (But Not All) Employee Benefit Plan Deadlines

The IRS recently issued Notice 2020-23, expanding on previously issued guidance extending certain tax filing and payment deadlines in response to the novel coronavirus (COVID-19) crisis. This guidance applies to specified filing obligations and other “specified actions” that would otherwise be due on or after April 1, 2020, and before July 15, 2020. It extends the due date for specified actions to July 15, 2020.

Specified actions include any “specified time-sensitive action” listed in Revenue Procedure 2018-58, including many relating to employee benefit plans. The relief applies to any person required to perform specified actions within the relief window, and it’s automatic — your business doesn’t need to file any form, letter or other request with the IRS.

Filing extensions beyond July 15, 2020, may be sought using the appropriate extension form, but the extension won’t go beyond the original statutory or regulatory extension date. Here are some highlights of Notice 2020-23 specifically related to employee benefit plans:

Form 5500. The relief window covers Form 5500 filings for plan years that ended in September, October or November 2019, as well as Form 5500 deadlines within the window as a result of a previously filed […]

By Linkenheimer LLP|2020-09-03T20:03:03+00:00April 22nd, 2020|business, contributions, employer, hsa, retirement|0 Comments

Numerous Tax Limits Affecting Businesses Have Increased For 2020

An array of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2020. Here are some that may be important to you and your business.

Social Security tax

The amount of employees’ earnings that are subject to Social Security tax is capped for 2020 at $137,700 (up from $132,900 for 2019).

Deductions

Section 179 expensing:
- Limit: $1.04 million (up from $1.02 million for 2019)
- Phaseout: $2.59 million (up from $2.55 million)

Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at:
- Married filing jointly: $326,600 (up from $321,400)
- Married filing separately: $163,300 (up from $160,725)
- Other filers: $163,300 (up from $160,700)

Retirement plans

Employee contributions to 401(k) plans: $19,500 (up from $19,000)
Catch-up contributions to 401(k) plans: $6,500 (up from $6,000)
Employee contributions to SIMPLEs: $13,500 (up from $13,000)
Catch-up contributions to SIMPLEs: $3,000 (no change)
Combined employer/employee contributions to defined contribution plans (not including catch-ups): $57,000 (up from $56,000)
Maximum compensation used to determine contributions: $285,000 (up from $280,000)
Annual benefit for defined benefit plans: $230,000 (up from $225,000)
Compensation defining a highly compensated employee: $130,000 (up from $125,000)
Compensation defining a “key” employee: $185,000 (up from $180,000)

Other employee benefits

Qualified transportation fringe-benefits employee income exclusion: $270 per month (up […]

By Linkenheimer LLP|2020-09-03T20:03:17+00:00March 3rd, 2020|business, deduction, deductions, employer, New Tax Laws, retirement|0 Comments

4 New Law Changes That May Affect Your Retirement Plan

If you save for retirement with an IRA or other plan, you’ll be interested to know that Congress recently passed a law that makes significant modifications to these accounts. The SECURE Act, which was signed into law on December 20, 2019, made these four changes.

Change #1: The maximum age for making traditional IRA contributions is repealed. Before 2020, traditional IRA contributions weren’t allowed once you reached age 70½. Starting in 2020, an individual of any age can make contributions to a traditional IRA, as long he or she has compensation, which generally means earned income from wages or self-employment.

Change #2: The required minimum distribution (RMD) age was raised from 70½ to 72. Before 2020, retirement plan participants and IRA owners were generally required to begin taking RMDs from their plans by April 1 of the year following the year they reached age 70½. The age 70½ requirement was first applied in the early […]

By Linkenheimer LLP|2020-09-03T20:03:19+00:00February 4th, 2020|ira, New Tax Laws, retirement|0 Comments

New Law Helps Businesses Make Their Employees’ Retirement Secure

A significant law was recently passed that adds tax breaks and makes changes to employer-provided retirement plans. If your small business has a current plan for employees or if you’re thinking about adding one, you should familiarize yourself with the new rules.

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was signed into law on December 20, 2019 as part of a larger spending bill. Here are three provisions of interest to small businesses.

Employers that are unrelated will be able to join together to create one retirement plan. Beginning in 2021, new rules will make it easier to create and maintain a multiple employer plan (MEP). A MEP is a single plan operated by two or more unrelated employers. But there were barriers that made it difficult to setting up and running these plans. Soon, there will be increased opportunities for small employers to join together to receive better investment results, while allowing for less expensive and more efficient management services.
There’s an increased tax credit for small employer retirement plan startup costs. If you want to set up a retirement plan, but haven’t gotten around to it yet, new […]

By Linkenheimer LLP|2020-09-03T20:03:20+00:00February 4th, 2020|New Tax Laws, retirement|0 Comments

What Lenders Look for in a Succession Plan

Business owners are urged to create succession plans for the good of their families and their employees. But there’s someone else who holds a key interest in the longevity of your company: Your lender.

If you want to maintain a clear path to acquiring the working capital your business may need after you’ve stepped down, it’s important to keep your lender apprised of your progress in putting a carefully considered succession plan in place.

A viable successor

One key operational issue that lenders look for in a succession plan to address is, simply, who will lead the enterprise after you? For family-owned businesses, finding a successor can be difficult. Children or other relatives may be qualified but have no interest in taking the reins. Or they may want to be involved but have insufficient experience.

To reassure your lender about issues such as these, take the time to identify and nurture future leaders. […]

By Linkenheimer LLP|2020-09-03T20:03:22+00:00January 13th, 2020|succession planning|0 Comments