Retirement

Tax

States Must Confront Huge Retiree Obligations

Soaring health care costs and low investment returns in pension funds are forcing state and local governments to make drastic changes to retiree health care benefits and to lengthen vesting periods for new workers. As of December 15, the Government Accounting Standards Board (GASB), requires government entities to record Other Post-employment Benefits (OPEB) as accrued liabilities under statements 43 and 45.

As Annual Enrollment Deadline Nears, Study Finds Seniors Better Off Buying Canadian

Just as the December 31 deadline for annual enrollment approaches, a study of Medicare Part D was released showing that for most seniors it is less expensive to order drugs from a Canadian pharmacy. Recent changes to the US regulations, due to a rider on the Homeland Security spending bill, now make it legal to do what thousands have been doing for years to keep costs down, order drugs from our northern neighbor.

GASB Exposure Draft Seeks Enhanced Pension Disclosure Requirements

The Governmental Accounting Standards Board (GASB) on December 15 issued a Proposed Statement regarding Pension Disclosures. The changes outlined in the Exposure Draft would enhance accountability, improving the usefulness of financial information about pensions and bringing disclosure requirements for governments and governmental pension plans into line with those recently issued for other post-employment benefits or OPEBs.“Today’s [Dec.
Tax

The Formula Business Is Waiting For: IRS Reveals How to Calculate Excise Tax Refund

“Businesses and tax-exempt organizations generally have more varied phone usage patterns than individuals,” Internal Revenue Service (IRS) Commissioner Mark Everson explained in a statement announcing a formula businesses and tax-exempt organizations can use to estimate their federal telephone excise tax refunds. “The IRS has met with a number of businesses and tax-exempt organizations to understand their concerns.
Tax

Understanding Your 401(k) Fees, Tax Implications

With more pension plans floundering or failing altogether, workers are advised to step up their knowledge of their company's 401(k) plan.Financial advisers say workers should understand the overall structure of these popular retirement savings accounts, as well as the fees they are paying and the tax implications of 401(k)s.Advertisement

Savings in America

The concept or practice of personal savings has been lost among excesive spending for most Americans. According to Forbes, the American personal savings rate as a percentage of disposable income was negative 0.5 percent. Other industrialized nations, like France or Germany, have savings rates of 11.6 percent and 10.6 percent, respectively, while Japan can be proud of a savings rate of 6.7 percent.Sophie Beckmann told Forbes, “The savings situation in this country is dire, as people are not adding to their savings in the way they should be.
A&A

FASB Improves Employer Pension & Postretirement Plan Accounting

The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans last week, making it easier for users of financial information to understand and assess an employer’s financial position and its ability to fulfill benefit plan obligations.

Savings Possible as American Hospital Bill Approaches $800 Billion

The nation’s hospital bill, representing 39 million hospital stays, totaled more than $790 billion in 2004, according to a new report from the U.S. Department of Health and Human Services’ (HHS) Agency for Healthcare Research and Quality (AHRQ). At the same time, the National Scorecard on U.S.

4 of 5 Executives Consider Outsourcing Pension Plan Management

Major changes in pension plan rules are fueling a trend toward outsourcing plan management, with 81 percent of executives responding to a Quick Poll reporting they will consider it. The results of the poll, released on Monday, also indicate that 42 percent of participating U.S. and Canadian plan sponsors remain committed to their defined benefit plans. 
Practice Management

Deadline for Establishing a SIMPLE Retirement Plan Approaching Fast

"With the future of social security up in the air and traditional corporate pension plans on the path towards extinction, contributing to a retirement plan provides some peace of mind that you'll be able to retire comfortably," explains Andrew Schwartz CPA, founder of CPA Niche, LLC.Advertisement

Short-Term Project Aims to Enhance Governmental Pension Plan Disclosure

The Governmental Accounting Standards Board (GASB) has added a project intending to bring current governmental pension disclosure requirements in line with those of other post-employment benefits (OPEB) to its current technical agenda.

Pension Protection Act Modernizes the Tax Court

The Pension Protection Act of 2006 does far more than protect pensions.

Secrets to Keeping the IRS Out of Your Clients’ 401K

At some point in the future, your financial coaching clients will no longer be working where they are. Whether it’s because they retire, get laid off or change employers, it’s your responsibility to prepare them. That’s because when it comes to their pension funds, they have several options open to them when they leave their job. And if you don’t know what those options are, and choose the wrong one, you will have the IRS smack dab in the middle of your clients' IRAs.

Income Tax Burdens for the Non-Spouse Beneficiary

Have you heard about a “stretch IRA” and wondered if it was some special kind of IRA? Well, it isn’t. In the simplest terms, a stretch IRA is an IRA that has a beneficiary designation that provides for the possibility of maintaining the tax deferred status of the IRA after the death of the IRA owner. You might be thinking, “I wish I had a stretch IRA. I only named my spouse as my primary beneficiary and my kids as my successor or contingent beneficiary.” Well, guess what? You have a stretch IRA.
Community News

Acquisition Creates One of Georgia's Largest Pension Consulting Firms

TEGRA Financial Partners, a subsidiary of Habif, Arogeti & Wynne, LLP, (HA&W) the largest independent certified public accounting and business advisory firm in Georgia, announced it has acquired Olson & Swenson, Inc., an Atlanta-based full service and pension consulting firm.
Tax

Accountants Support Prohibition on Taxing Non-Resident Retirement Income

A new law signed by President Bush on August 3, 2006, and supported by the American Institute of Certified Public Accountants (AICPA), as well as others in the accounting profession, prohibits states from taxing the retirement income of partners who are not residents of that state.The law amends Title 4 of the Untied States Code to clarify the treatment of self-employment for purposes of the limitation of State taxation of retirement income. Specifically, the law clarifies that U.S.C.
Tax

Verbal Agreement Found in Pension Bill Negotiations

Negotiators have been seeking concessions on compromise legislation to help America’s stressed employer-based pension system. Last week a verbal agreement on parts of the bill was reached. One hanging issue is a proposal backed in the Senate bill giving special relief to financially strapped airlines. GOP leaders are pressing negotiators for a cut in estate taxes as well, according to the Associated Press.

States Facing ‘Unmanageable’ Retiree Health-Care Liabilities

A new accounting standard has states and local governments worried about their ability to borrow money, while employees fear their benefits may be cut.Advertisement

Managing Company Stock in a 401(k); IRA Rollover vs. Taxable Account

Employees who are approaching retirement or taking advantage of a buyout and who hold company stock in a 401(k) should consider potential tax savings from taking a lump-sum distribution of the stock into a taxable brokerage account rather than rolling it into an IRA, USAToday says. The employee pays tax at the time of the distribution, based on his or her normal tax rate (25 percent or more) on the cost basis in the stock, not on its fair market value.
A&A

Succession Plans for Family Owned Businesses

Successful transitions from the first to the second or third generations in family-owned businesses come from identifying the family member who is capable of running the business and then structuring the transition as a business transaction, says Christopher Hirschfeld, Vice President and Managing Director, Goelzer Investment Banking, according to insideindianbusiness.com.The business owner may assume that a child wants to run the business and is capable, but “this assumption needs to be validated well before the owner steps aside,” Hirschfeld says.

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