When is a loan considered a deemed distribution?

Many 401(k) plans permit participants to borrow from the plan and it’s becoming a more and more common practice. The plan document must specify if loans are permitted. The majority of those loans are repaid according to the terms of the loan agreement. However, there are instances when a participant defaults – and then it’s …

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Forfeitures – how do they affect you as a plan participant?

401(k) plan forfeitures occur when a participant terminates employment (voluntarily or involuntarily) prior to satisfying the required service years to become fully vested in his/her account. Required service years will vary by plan, but can be found in your summary plan description. The portion of your account subject to forfeitures is the portion that is …

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Why did I receive a refund of my 401k contribution?

If you contributed to your 401k plan, then received a refund for a portion of your contributions for that year, chances are your plan failed the annual IRS required compliance (discrimination) testing. This test, or series of tests (based on your plan’s elections), provide for equal tax breaks to all participating employees – not just …

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The importance of understanding your cash flow

Cash is king! That’s what we all learn in Accounting 101. And every business owner knows that cash is the heartbeat of the business. Profitable companies can go out of business because they do not have enough cash on hand to pay their debts. This makes it all the more important that you know exactly …

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Is your 401(k) plan properly insured?

There are two common insurance policies that relate to employee benefit plans: an ERISA fidelity bond and fiduciary liability insurance. Both help lower risk but only one of the policies – the ERISA fidelity bond – is required by the Employee Retirement Income Security Act (ERISA) administered by the Department of Labor (DOL). An ERISA …

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Utilization of service organizations

Service organizations exist to assist companies of all sizes in performing certain tasks that the company is not capable of performing or would rather outsource to a third-party. Examples of service organizations include: Payroll providers 401(k) record-keepers IT backup and cloud services And more But do companies understand and review the controls within the service …

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Selling your business? Here’s what to expect

We continue to see some of our clients looking to sell their business, whether to a strategic buyer or to a private equity group. For many of our clients this may be the one and only time that they sell a business. For any person looking to sell a business, there are some things to …

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We’ve outgrown our accounting software! Now what?

Many small businesses begin with commercial accounting software, such as QuickBooks or Peachtree and find that, as their business grows, they may spend a considerable amount of time exporting data to create various management reports that can’t be generated within the current accounting system. In addition, they may see their chart of accounts rapidly growing …

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Coming soon: GASB’s new lease standard

The Governmental Accounting Standards Board (GASB) is set to release a new standard dealing with leasing later this month. The new lease standard is set to be effective for reporting periods beginning after December 15, 2019 and earlier application is encouraged. If you are a state or local government that is involved in leasing, then …

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Does your employee benefit plan need an audit?

If your Company sponsors an employee benefit plan (this includes 401(k) plans), an audit of that plan may be required. What triggers the need for an audit? The number of participants. Plans with 100 or more participants at the start of the plan year are considered “large” and generally require an annual audit, while plans …

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