Here’s a summary of what you’ll find in the Summer 2009 issue of our Management & Tax Concepts newsletter
Tax Law Focuses on Foreign Bank Account Reporting Form
Substantive tax law in the U.S. took a back seat in June to a filing requirement that, until this year, was little known by many tax advisers and most taxpayers. The form, Form TD F90-22.1 (Report of Foreign Bank and Financial Accounts), is commonly referred to as the “FBAR Form” and is used by U.S. persons to report ownership of, a financial interest in, or signatory authority over, a foreign bank account or a foreign financial account.
Ready to convert? To a Roth IRA, that is
Even if converting your traditional IRA to a Roth IRA isn’t an option for you today, it will be next year. That’s because starting in 2010 the income and marital status restrictions that might otherwise restrict your ability to make that conversion will no longer apply. But it’s not for everyone. This article discusses the pros and cons, while a sidebar looks at the advantage of contributing to a charity directly from your IRA.
Attract and retain top talent
Offering deferred compensation plans can keep ‘em happy
Even in these times, attracting and retaining top executive talent is crucial. An appealing compensation package may be just the ticket, and deferred compensation can be an important part of that package. In considering compensation, companies have two options: qualified deferred compensation (QDC) plans or nonqualified deferred compensation (NQDC) plans. Both can benefit your top employees; the major difference between the plans is how they affect your business. In particular, companies must pay attention to Section 409A compliance rules.
Risk management: How to use ERM to plan for the worst
Enterprise Risk Management (ERM) hasn’t saved every company in these difficult times, but it remains the most viable solution to the numerous and varied risks that companies face during this era of financial uncertainty, globalization and technological change. There are some best practices you can follow in building sound, companywide risk protection. They involve assessing risks, developing a plan, and bringing ERM into the company culture.
2 expanded business tax breaks deserve your attention
Two valuable tax breaks were expanded earlier this year that can provide many businesses with substantial benefits if they act soon. The American Recovery and Reinvestment Act of 2009 (ARRA) extended the 50% bonus depreciation through 2009, making it more affordable for businesses to invest in asset purchases this year. The act also expanded the net operating loss (NOL) carryback period for smaller businesses with 2008 NOLs, potentially providing them with a much needed cash infusion this year.
The 411 on enhanced charitable contribution deductions
Under previous law, the charitable contribution deduction was limited to cost. But, through
Dec. 31, 2009, businesses contributing food, computer equipment and books to qualifying organizations can receive a deduction of up to twice the cost or basis of an item, if the value is higher than cost. This offers some companies a great opportunity to reduce their tax burden.
Here’s a summary of what you’ll find in the Fall 2009 issue of our Management & Tax Concepts newsletter
Trien Rosenberg is pleased to present the Fall 2009 issue of Management & Tax Concepts as a way to help you achieve your personal financial and business goals. The articles cover several topics we think you’ll want to know about.
Homeowner Tax Credit and Net Operating Loss Carryback rules have been liberalized
The “Worker, Home ownership, and Business Assistance Act of 2009,” signed into law on November 6, extends and generally liberalizes the first-time home buyer tax credit, making it a much more flexible tax-saving tool. The new law also provides an election to all U.S. businesses to carry back Net Operating Losses.
Do you know what your competitors are up to?
There are many ways of finding out …
Knowledge is power. The more a company knows about its competitors, the better it will be able to anticipate their moves as well as create its own counter moves and proactive measures. This article describes a number of perfectly legitimate ways to gather competitive intelligence. And, as a sidebar explains, one such way is to hire competitors’ employees, providing one is careful to observe non compete agreements or other legal constraints.
Solo 401(k)s offer singular advantages
For self-employed individuals and owners of certain small businesses, several retirement plan options are available. One option that offers a number of singular advantages is the Solo 401(k). Among the advantages are high contribution limits, availability of plan loans, and flexibility in regard to contributions and the types of investments one may choose.
Handle life insurance with care to protect proceeds from taxes
Life insurance can help achieve a variety of estate planning and business planning goals. Unfortunately, keeping life insurance proceeds free of income and estate taxes can get complicated. But there are ways, such as having an irrevocable life insurance trust (ILIT) own a life insurance policy; creating the right buy-sell agreement; and avoiding “for value” transfers.
3 savvy yearend tax planning moves for businesses
Given the state of the economy over the past year, tax planning is more important than ever.
But one can employ three savvy year end moves: timing income and deductions for best results; deferring tax on advance payments; and increasing one’s tax basis in company stock.
Here’s a summary of what you’ll find in this issue.
You may qualify for a powerful tax incentive – you’re an exporter and you didn’t know it!
Tax incentives have come and gone throughout the years, incentivizing a wide array of business activities; but for exporters (keep reading- you may actually be an exporter and didn’t know it); there is only one, powerful, option. This tax strategy can increase your after-tax margin on exports by ten percent.
This incentive is called the Interest Charge - Domestic International Sales Corporation, known as the “IC-DISC.” The IC-DISC traces its heritage as far back as 1971 when it did little more than provide a tax deferral opportunity. This benefit was well appreciated by the Fortune 1000, but it did little for the small and middle-market. That changed in 2003.
Today, the IC-DISC regime allows U.S. companies to set up separate domestic entities which act as commission agents for the company’s export sales. Once the IC-DISC is set up, the U.S. company can pay commissions to the IC-DISC. These commissions can be as high as 50% of net export income or 4% of gross export receipts, whichever is higher!
Disaster recovery planning. Making sure your company is ready for anything
Every year there are at least a few examples in the news of how a single natural disaster can adversely affect — sometimes even destroy — a business. And many disasters, both natural and manmade, have detrimental consequences not fully realized until many months later. This is why it’s so important that a company put together a comprehensive plan to keep its people safe, its information preserved and its operational capacity maintained. This article shows how disaster planning, storage technology and the proper insurance are important components in a disaster recovery plan. A sidebar briefly looks at the kinds of disasters waiting to happen.
6 key components of a business budget
Many owners of small to midsize businesses don’t create a budget or don’t update the one they have, typically because they’re too busy or simply not focused on sticking to a budget. But keeping a budget is important not only for planning purposes, but because banks have been setting up loan covenants with an increased emphasis on budgeting. There are six key components that should be part of a budget, including line-item details for allocating funds and a regular monitoring of performance against expectations.
Accidents happen: Consider long-term disability coverage
A disabling accident or illness can happen to anyone at any time — and the more severe, the greater the potential drain on an individual’s or family’s budget. For this reason, everyone should at least consider long-term disability insurance. Employer coverage is likely only short-term and, even if it’s for a longer period, may not offer adequate coverage. Buying one’s own long-term disability coverage isn’t inexpensive, but does offer certain advantages. There are, however, certain things to consider, such as how the insurer defines “disability” and whether to buy “own occupation” vs. “any occupation” coverage.
Have you considered a reverse mortgage? It can do more than just fund medical expenses
Although many associate reverse mortgage arrangements with someone looking to fund an influx of unexpected medical costs, they can do more than just that. Many higher-net-worth individuals are using these arrangements to supplement their retirement income, allowing them to take trips or buy recreational vehicles. Some are taking out reverse mortgages to fund the purchase of a vacation home, or to make annual exclusion gifts or 529 college savings plan contributions. But there are risks, as well, so it’s important to get professional advice.
We believe our firm excels at providing tax, accounting and business consulting services for businesses and personal financial and tax planning for individuals. We welcome your questions or comments about the topics discussed or others related to helping you succeed. Please call one of our partners to let us know how we can be of assistance.
Also, please tell us of anyone else you know who might want to receive this newsletter.
We look forward to hearing from you and to helping you to meet your financial objectives.
Sincerely,
Jay Trien
Senior Partner
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