1. Payroll Compliance

• Employee Data Review : Ensure employee information (names, addresses, SSNs/ITINs) is accurate and up to date.
• Payroll Records Reconciliation: Compare year-to-date payroll reports with general ledger and tax filings to confirm accuracy.
• Tax Withholdings Verification: Check federal, state, and local tax withholdings for accuracy and compliance.
• Forms W-2 and 1099 Preparation: Ensure all employees and contractors receive their forms by the IRS deadline.
• Account for Fringe Benefits: Reconcile taxable benefits such as company cars, relocation expenses or education reimbursements.
• Adjustments and Corrections: Resolve any payroll errors to avoid penalties.

2. Benefits Compliance

• Benefits Election Verifications: Ensure employee benefits elections match payroll deductions.
• ACA Reporting Review: Ensure compliance with the Affordable Care Act (ACA) and prepare Forms 1094-C and 1095-C.
• Health Savings Accounts and Flexible Spending Accounts: Notify employees of contribution limits and deadlines for rollovers or reimbursements.
• COBRA Compliance: Verify COBRA-eligible employees are accurately tracked and notified.
• Retirement Plan Audits: Ensure contributions to 401(k) or other retirement plans comply with IRS limits.

3. Tax Compliance

• Tax Deposits Reconciliation: Ensure all payroll taxes were deposited accurately and on time.
• Year-End Filings Preparation: for federal and state unemployment taxes, as well as local payroll taxes (where applicable). 
• Deadline Monitoring: Confirm IRS and state filing deadlines for W-2s, 1099s, and tax payments.

4. Vendor Coordination

• Deliverables Confirmation: Ensure your payroll provider will deliver all necessary reports and tax forms by agreed-upon deadlines.
• Service Agreement Reviews: Verify the scope of services to avoid surprises or gaps in compliance responsibilities.

5. Communication with Employees

• Year-End Statements: Share pay stub summaries and benefits statements for employee records.
• Deadline Reminders: Communicate deadlines for FSA claims, HSA contributions, and other year-end benefits.
• Tax Form Distribution: Notify employees when to expect W-2s and 1099s and how to update mailing addresses.

6. Recordkeeping and Audits

• Archive Records: Save copies of payroll reports, tax filings, and benefits documentation for at least the legally required period.
• Audit Planning: Prepare for potential audits by ensuring all records are complete and accurate.

7. Plan for the Next Year

• Update Payroll System: Adjust for new tax rates, contribution limits, and regulatory changes.
• Set Calendar Reminders: reminders for recurring compliance tasks and filing deadlines.
• Conduct Training: Educate staff about any changes to compliance requirements.

The post Year-End Checklist for Payroll and Benefits Compliance appeared first on Fast and Affordable 401k for growing businesses.

Questions about retirement options and 401(k)s are common, and smart accountants need to have answers ready. Here’s how to lead your small business clients in the right direction.

Why should I invest in a 401(k) for my small business?

There are two important reasons to consider a 401(k) for your business.

1. It is one of the best tools for recruiting and retaining good employees. A few years ago, the country went through “The Great Resignation.” What we learned from that is that the current generation of employees want more than just a 9-5 job. They want to do work that makes a difference and with a company that cares about them, personally. As a small business owner, you show you care about your employees by taking care of them. That means, providing them with benefits, most importantly, retirement benefits. The feeling of financial security helps employees worry less and engage more at work.
2. Huge tax incentives may cover most or all of the expenses for the first three years. The government has rolled out several big credits that employers considering a new 401(k) plan should know about. They include auto-enrollment credit, administrative expense credit and employer matching credits. These credits are intended to help small companies offer good retirement benefits, and are available to businesses with 100 or fewer employees.

What are the state retirement mandates I’ve been hearing about?

About half of all employers in the US live in states where offering retirement is no longer optional—it’s mandatory (or will be soon). That puts a lot of stress on employers to figure out their responsibilities in becoming a plan sponsor. It can be overwhelming to be faced with researching options, trying to understand responsibilities, and executing all of the tasks related to sponsoring a plan.

401GO actually began in response to this same overwhelm. CEO Dan Beck, when looking for a retirement plan for employees of another company he owned, experienced what so many other small business owners experienced when starting a 401(k). He discovered that navigating the responsibilities and cost of starting a retirement plan for his company was difficult and frustrating, and that there were no options aimed at helping small companies.

Thus, 401GO was born and we have been helping small businesses by taking that stress away.  401GO steps in and performs almost all of the compliance related to sponsoring a 401(k), relieving the burdens of the sponsor so they can focus on running their business.

I want to start a 401(k) but how do I get started?

That’s an easy question and one I love to answer.  Simply send them my way and we will take care of them from start to finish.  I work with some of the most talented people on the planet and they have worked with thousands of people in companies starting new small business 401(k) plans. Our Plan Consultants can answer questions and walk someone through a plan setup in about 15 minutes.

Accountants can have an easy answer for their clients by partnering with 401GO, and learning what we have to offer compared to others. Then you’ll be a hero to your clients by giving them not only a quick solution to their problem, but a good one too. They’ll be thrilled at your expertise and you’ll have another happy customer.

I want to move my current plan to another provider.  How do I do that?

Tell your client to WAIT before taking any further action.  You cannot simply shut down a plan and start a new one.  If you do, you will be restricted from opening the new plan for 1 year…and that is a bummer.  So, send them my way so we can help walk them through this process.

401GO has a great process for transitioning a small business 401(k) plan from an old provider. We do it with minimal disruption to employees, and we even have a team of experts in place to help. 

Prepare Your Answers

Accounts should be ready for these questions, and have some good answers prepared. To learn more about how a partnership with 401GO can benefit you and your clients, contact us. 

The post Small Business 401(k) Questions and How Accountants Can Answer Them appeared first on Fast and Affordable 401k for growing businesses.

Most people know that socking money away in a 401(k) is a good strategy for helping to ensure a more secure retirement. But not everyone understands the tax benefits involved — not just for participants in the plan, but also for the business owners and corporations that sponsor the plans. And although small-business owners stand to gain less than larger businesses in the form of tax breaks, these gains are often more valuable to a small business because they have less flexibility in their budgets. 

Here at 401GO, our goal is to help businesses sponsor retirement plans for their employees so that more workers have more secure futures. That’s why we want everyone to understand the tax benefits of retirement plans.

The Tax Benefits of Retirement Plans for Small Businesses

Historically, small businesses with 401(k) plans have been few and far between, leaving a lot of workers with no access to retirement savings vehicles. The problem was so widespread that state governments have taken it into their own hands, mandating that many businesses now provide access to a retirement plan to their workers, and offering a free Roth IRA option for those that want it. This is definitely a good thing, it’s just not a very good thing, because these workers already have access to IRAs — the state plans just allow for automatic contributions that come directly from paychecks. So many of these workers still don’t have access to 401(k) plans.

But if you’re a small-business owner, you know the reason most small businesses weren’t offering their employees a 401(k) plan wasn’t due to a Scrooge-like management style — it was because of the hurdles they had to clear to get a 401(k) off the ground.

If you have ever talked to a brokerage firm about starting a 401(k), you know what we’re talking about. Small-business owners are not preferred clientele at brokerage firms, and it’s hard for these startups to afford all the fees associated with sponsoring a 401(k) — and keeping it running. That’s why we started 401GO — setup is easy and fees are minimal.

But of course some fees are necessary, because everyone needs to pay the costs associated with whatever goods and services they provide. So even though our fees aren’t high, it is still an expense for small-business owners. And that’s why we want you to understand that some of these costs are offset by tax breaks for small-business owners. What kind?

·       A 401(k) is a deductible expense: Because your 401(k) plan benefits your employees, you can deduct any expenses related to it from your taxes. So any and all startup costs, ongoing costs, annual fees, fees for services of professionals such as human resources professionals, accountants, auditors, CPAs — all of these are deductible. Heck, even matching contributions are deductible. Not all 401(k) sponsors offer a match, but when you consider the benefits (employees value it and you can write it off), it seems like a no-brainer.

·       Tax credits for new plans: Your company may be eligible for tax credits for starting a 401(k). These tax credits can be a great benefit, but you cannot claim this tax credit and deduct the startup expenses on your taxes — it’s either/or. One may be more beneficial to you than another, and determining this is best done by your accountant or tax professional. Your tax bracket, how many employees you have and what types of other deductions you are eligible for may tip the scales in favor of one choice over the other. 

As the SECURE Act continues to morph, small businesses are getting greater advantages: Previously, a small business with 50 or fewer employees could deduct 50% of startup costs up to $5,000, but now it’s 100%.

·       Save on compensation: While we don’t recommend withholding raises at your company, you may be able to pay workers less if you clearly explain to them how matching contributions are money they get from you, even if it isn’t in their paycheck. (This may be easier to do if you don’t have a complex vesting schedule.) The more compensation you can pay as matching 401(k) contributions, the more your company saves, because these contributions are tax-deductible, while wages aren’t.

Personal Tax Benefits

As great as it is for your employees to have access to a 401(k) plan, it’s great for you too, and not just as a business owner, but also as an individual. That’s because once you sponsor a 401(k) plan, you can contribute to it as well. When you get the company match, it’s like a double dip, because the money goes into your personal account, but you can also deduct that match on your taxes, as you do for other employees.

If you’re contributing to your 401(k) with pre-tax money, you’re saving now because you’re not yet paying taxes on that income. If you have a Roth 401(k), you save because you won’t have to pay taxes later, when you’re making withdrawals. This could benefit you in two ways. Younger workers often benefit more from a Roth retirement plan because they are usually making less money than they will when they are ready to retire and start making withdrawals, and are thus likely in a lower tax bracket. Paying only 15% tax on your retirement income versus 24%, 35% or even more can save a bundle. Additionally, if your company is still new and you aren’t making a great deal of money, you can stand to benefit even more from this (assuming your continued success and growing salary). These individual benefits add up.

Sponsoring a 401(k) plan at a small-business is a personal decision that is greatly influenced by finances. If you determine it makes good business sense for your company to sponsor a 401(k) plan, contact 401GO today. There’s no obligation — just great information.

The post The Tax Benefits of Retirement Plans appeared first on Fast and Affordable 401k for growing businesses.