Are you looking for a way to give your employees a tax-free benefit that is also tax-deductible for your business? Consider an accountable plan. These arrangements let you reimburse your employees for expenses incurred on behalf of your company, such as driving to the post office or office supply store. With a properly administered plan, you can deduct the reimbursements on your business tax return, yet the payments are not considered income to your employees.
How can you make sure your plan qualifies? Here are three requirements.
The reimbursements must be for allowable business expenses. For instance, you can repay employees for hotel and other travel expenses when traveling to a trade convention.
Your employees need to keep records of the expenses, and provide those records to you.
If you pay or advance your employees more than the actual amounts spent on business items, the excess must be returned to you. Amounts not returned are income to your employee, and are subject to payroll taxes.
Contact us to discuss your policies for repaying employees’ business expenses. We’ll help you make your plan accountable.
https://www.kellerowens.com/wp-content/uploads/2016/05/records-folder.jpg335596Keller & Owens/wp-content/uploads/2015/11/logo.pngKeller & Owens2016-08-02 00:03:532016-08-02 00:03:53Accountable Plans Are a Win-Win Business Idea
When you change jobs and abandon vested amounts in your 401(k), your former employer has to follow IRS rules and plan provisions for dealing with your account balance. Pursuant to these guidelines, the 401(k) plan may have a “force-out” provision. That means when your vested balance is less than $5,000, you can be forced to take your money out of the plan.
Your former employer is required to give you advance notice of this rule so you can decide what to do with the money. Your choices are to cash out your account and receive a check, or roll your account balance into an IRA or your new employer’s plan.
What happens if you fail to respond to the notice? If your vested balance is more than $1,000, your former employer must transfer the money to an IRA. For balances under $1,000, you will either get a check or your former employer will open an IRA on your behalf.
Neither outcome is optimal, according to a report by the U.S. Government Accountability Office. If you receive the money, you’ll owe federal income tax. When the balance is transferred to an IRA, account fees may outpace investment returns and your balance will be eroded over time.
Protecting assets you worked for and earned is always a smart move. Call us for assistance.
https://www.kellerowens.com/wp-content/uploads/2015/12/401k-egg.jpg396506Keller & Owens/wp-content/uploads/2015/11/logo.pngKeller & Owens2016-08-02 00:01:142016-08-02 00:01:14Don’t Be Forced Out of a 401(k) From Your Former Job
In May, the U.S. Department of Labor updated the rules for paying overtime.
Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That’s double the annual exempt amount of $23,660 under current rules.
The changes take effect December 1, 2016, which means you need to begin reviewing your payroll now, as penalties and fines can be assessed for noncompliance.
One important step is to begin tracking hours for your salaried employees.
Contact us if you need assistance in this area.
https://www.kellerowens.com/wp-content/uploads/2016/07/overtime.jpg671894Keller & Owens/wp-content/uploads/2015/11/logo.pngKeller & Owens2016-07-08 02:46:372016-07-08 02:46:37Start Preparing Now for New Overtime Rules
The prices you set for your products and services affect every aspect of your business, including long-term viability, short-term profits, market share, and customer loyalty. While the guidebook or financial guru who can provide the perfect answer to this important decision doesn’t exist, tried-and-true principles can help. Here are three suggestions to arrive at reasonable pricing for your market and industry.
Cover costs. The price you charge for a particular product must at least equal the cost of producing that product. Depending on your industry, production costs might include raw materials, storage, salaries, advertising, delivery, rent, equipment, taxes, and insurance. Some of these will be categorized on your income statement as “cost of goods sold.” Others will be overhead. Some, such as rent and utilities, are relatively fixed. Others are variable, such as shipping and stocking fees. Adding the amount of profit you want to earn as a percentage (called the cost-plus pricing method) is one way to arrive at an appropriate price.
Know your market. Some businesses hire research firms to develop detailed reports on competitors, markets, and forecasts for a particular region or industry. But you may be able to get a handle on your market by using surveys and other methods of ferreting out customer perceptions about your product and service quality, the effectiveness of your advertising, and the reasonableness of your prices as compared to your competition.
Monitor regularly. Product pricing is not a one-time event. Instead, you’ll want to monitor the impact of price fluctuations on sales revenue over time. Overpricing – charging more than a reasonable buyer can be expected to pay – may limit sales. Underpricing may create the perception of poor quality or lead to unsustainably low profit margins.
https://www.kellerowens.com/wp-content/uploads/2016/07/sales-prices.jpg365548Keller & Owens/wp-content/uploads/2015/11/logo.pngKeller & Owens2016-07-08 02:34:162016-07-08 02:34:16Follow These Suggestions for Better Pricing Decisions
Happy employees can have a positive impact on your operations, customer support, and profit level. Here are suggestions for keeping your workforce upbeat.
Lead by example. Demonstrate the personal discipline and commitment you hope to instill in your workers by showing up every day with a positive attitude.
Emphasize the link between attendance and productivity. Absenteeism is a symptom of unhappy employees. Help your employees understand the importance of the role they play in the success of the business.
Learn what motivates your employees. Conduct an online survey to learn if money, recognition, promotion, or time off drives your employees.
Enrich skill sets. Cross-training and job rotation can improve appreciation for overall business operations and mitigate boredom and dissatisfaction.
Create a time-off bank. Modify the traditional offering of vacation, personal, and sick days. Give your employees the responsibility and ability to balance work and home obligations by empowering them to manage total available paid time off.
Other suggestions for a healthy working environment and happy employees include celebrations and team building. While these “soft” methods may seem a distraction from everyday business, your employees will appreciate the effort and your business will profit from the resulting improvements in performance.
Accountable Plans Are a Win-Win Business Idea
/in Newsletter/by Keller & OwensAre you looking for a way to give your employees a tax-free benefit that is also tax-deductible for your business? Consider an accountable plan. These arrangements let you reimburse your employees for expenses incurred on behalf of your company, such as driving to the post office or office supply store. With a properly administered plan, you can deduct the reimbursements on your business tax return, yet the payments are not considered income to your employees.
How can you make sure your plan qualifies? Here are three requirements.
Contact us to discuss your policies for repaying employees’ business expenses. We’ll help you make your plan accountable.
Don’t Be Forced Out of a 401(k) From Your Former Job
/in Newsletter/by Keller & OwensWhen you change jobs and abandon vested amounts in your 401(k), your former employer has to follow IRS rules and plan provisions for dealing with your account balance. Pursuant to these guidelines, the 401(k) plan may have a “force-out” provision. That means when your vested balance is less than $5,000, you can be forced to take your money out of the plan.
Your former employer is required to give you advance notice of this rule so you can decide what to do with the money. Your choices are to cash out your account and receive a check, or roll your account balance into an IRA or your new employer’s plan.
What happens if you fail to respond to the notice? If your vested balance is more than $1,000, your former employer must transfer the money to an IRA. For balances under $1,000, you will either get a check or your former employer will open an IRA on your behalf.
Neither outcome is optimal, according to a report by the U.S. Government Accountability Office. If you receive the money, you’ll owe federal income tax. When the balance is transferred to an IRA, account fees may outpace investment returns and your balance will be eroded over time.
Protecting assets you worked for and earned is always a smart move. Call us for assistance.
Start Preparing Now for New Overtime Rules
/in Newsletter/by Keller & OwensIn May, the U.S. Department of Labor updated the rules for paying overtime.
Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That’s double the annual exempt amount of $23,660 under current rules.
The changes take effect December 1, 2016, which means you need to begin reviewing your payroll now, as penalties and fines can be assessed for noncompliance.
One important step is to begin tracking hours for your salaried employees.
Contact us if you need assistance in this area.
Follow These Suggestions for Better Pricing Decisions
/in Newsletter/by Keller & OwensThe prices you set for your products and services affect every aspect of your business, including long-term viability, short-term profits, market share, and customer loyalty. While the guidebook or financial guru who can provide the perfect answer to this important decision doesn’t exist, tried-and-true principles can help. Here are three suggestions to arrive at reasonable pricing for your market and industry.
Cover costs. The price you charge for a particular product must at least equal the cost of producing that product. Depending on your industry, production costs might include raw materials, storage, salaries, advertising, delivery, rent, equipment, taxes, and insurance. Some of these will be categorized on your income statement as “cost of goods sold.” Others will be overhead. Some, such as rent and utilities, are relatively fixed. Others are variable, such as shipping and stocking fees. Adding the amount of profit you want to earn as a percentage (called the cost-plus pricing method) is one way to arrive at an appropriate price.
Know your market. Some businesses hire research firms to develop detailed reports on competitors, markets, and forecasts for a particular region or industry. But you may be able to get a handle on your market by using surveys and other methods of ferreting out customer perceptions about your product and service quality, the effectiveness of your advertising, and the reasonableness of your prices as compared to your competition.
Monitor regularly. Product pricing is not a one-time event. Instead, you’ll want to monitor the impact of price fluctuations on sales revenue over time. Overpricing – charging more than a reasonable buyer can be expected to pay – may limit sales. Underpricing may create the perception of poor quality or lead to unsustainably low profit margins.
Improve Productivity With Happy Employees
/in Newsletter/by Keller & OwensHappy employees can have a positive impact on your operations, customer support, and profit level. Here are suggestions for keeping your workforce upbeat.
Lead by example. Demonstrate the personal discipline and commitment you hope to instill in your workers by showing up every day with a positive attitude.
Emphasize the link between attendance and productivity. Absenteeism is a symptom of unhappy employees. Help your employees understand the importance of the role they play in the success of the business.
Learn what motivates your employees. Conduct an online survey to learn if money, recognition, promotion, or time off drives your employees.
Enrich skill sets. Cross-training and job rotation can improve appreciation for overall business operations and mitigate boredom and dissatisfaction.
Create a time-off bank. Modify the traditional offering of vacation, personal, and sick days. Give your employees the responsibility and ability to balance work and home obligations by empowering them to manage total available paid time off.
Other suggestions for a healthy working environment and happy employees include celebrations and team building. While these “soft” methods may seem a distraction from everyday business, your employees will appreciate the effort and your business will profit from the resulting improvements in performance.