401(K) Withdrawals

A 401(K) is a type of retirement plan established by employers that permits employees to defer part of their salary on a pretax basis. Early withdrawals from a 401(k) plan or IRA accounts are subject to a 10% penalty prior to reaching age 59½. A Roth 401(k) works in a similar manner but the deferrals …

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Turning Age 70 1/2 and Required Minimum Distributions

When it comes to taxes, reaching age 70 ½ is an important milestone. That’s because you have to start taking annual required minimum distributions from your traditional IRAs when you reach age 70 ½. And if you’ve already retired from your company, you also must begin making withdrawals from your company retirement plan as well. …

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Reduced Corrective Contributions

During April 2015, the Internal Revenue Service (IRS) released Revenue Procedure 2015-28 that made amendments to the safe harbor corrective contributions for employee benefit plans. The Employee Plans Compliance Resolution System (EPCRS) allows plan sponsors to correct certain failures and thereby, continue to provide employees with retirement benefits. The IRS received numerous comments requesting special …

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Tax Benefits of Hiring Children to Work in the Family Business

Finding work for young adults that are eligible for employment can be very stressful. In recent years, the economy has created a culture which makes graduating college and taking that next step into the work force one that is not pleasant and incredibly nerve wracking. The family business may be the only place for some …

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Warning Signs Your Employer May be Misusing Your 401(k) Savings

I was browsing the United States Department of Labor (“DOL”) website the other day and I came across an interesting article that talked about employer abuse of employees’ 401(k) contributions. I haven’t really thought much about this before as I have fortunately always worked for employers that I feel are trustworthy and ethical. However, the …

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IRS Examinations of 401(k) Plans

Every American knows the instant anxiety associated with receiving a letter from the Internal Revenue Service (“IRS”). That anxiety might be overwhelming if the letter is a notification that your company’s employee benefit plan has been chosen for examination. The IRS understands this and has provided an online resource guide specifically geared to educating employers …

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Exploring Roth In-Plan Conversions

Brief History The Economic Growth and Tax Relief Reconciliation Act of 2001 authorized the establishment of Roth 401(k) accounts beginning January 1, 2006, which are post-tax retirement account. The next big thing to happen to Roth accounts was the American Taxpayer Relief Act of 2012, which opened the doors to in-plan Roth conversions. Effective immediately …

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What You Need to Know When Filing Form 5500

What is Form 5500? Form 5500 is the annual tax return for your retirement plan that must be filed with the Employee Benefit Security Administration (EBSA), a division of the Department of Labor (DOL). It is required by the Employee Retirement Income Security Act of 1974 (ERISA) to ensure employee benefit plans are operated and …

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