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Free eNewsletter & Special Promotions
Volume 6, Issue 10, October 2008
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On October 3, 2008, President Bush signed the “Emergency Economic Stabilization Act of 2008” (H.R. 1424). The main thrust of this new law is to make funds available to the credit market and keep the economy going. In addition to the $700 billion bailout provisions, the law includes some tax law changes that could affect your tax planning.
The law provides relief from the AMT for 2008, includes energy and disaster relief provisions, temporarily increases FDIC insurance on bank accounts, and extends many tax breaks that had expired or were due to expire.
Among the tax breaks that were extended through 2009 were the following:
The optional itemized deduction for state and local sales taxes.
The deduction for qualified higher education expenses.
The above-the-line deduction for classroom supplies purchased by teachers.
The additional standard deduction for property taxes paid by those who don't itemize.
Tax-free contributions from IRAs to charities by older taxpayers.
The business research and development credit.
15-year straight-line cost recovery for qualified leasehold, restaurant, and retail improvements.
The law increased the 2008 alternative minimum tax exemption amounts to $46,200 for singles and $69,950 for couples.
To see how these and other changes in the tax law might affect your tax planning, please contact a Kemper CPA Group LLP location near you. Our certified public accountants and consultants are here to help you identify tax-saving options that fit your particular situation.
Deferral Deposit Safe Harbor for Small Business
401(k) Plans
Previously, Department of Labor (DOL) regulations required employee 401(k) salary reduction contributions and loan repayments be deposited to the plan as soon as they could be reasonably segregated from the employer’s general assets. This really means that if an employer writes a paycheck to an employee as of any given date, they should also be writing a check to the retirement plan’s investment provider at the same time.
On February 29, 2008 the DOL issued proposed regulations for small plans (under 100 participants) that will set a “safe harbor” timeframe for depositing deferrals. The proposed regulations state that if the 401(k) deferrals and loan payments are deposited within seven business days of the pay date, the deposit is considered to be made timely (even if the amounts could have been segregated earlier).
Keep in mind that these proposed regulations apply only to small plans. Large plans must still follow the “as soon as can be reasonably segregated” methodology. The Department of Labor’s view on large plans is that they are
able to make deposits in a timelier manner – sooner than the seven day
safe harbor timeframe.
Should you have any questions about how these proposed regulations pertain to your business’ 401(k) plan, or if you need any additional information about employer-sponsored retirement plans, our professionals can help. Contact one of the following individuals today.
The economy is being scrutinized on every major news channel, and it is making headlines in key news publications every day – not surprisingly, personal finances are on the top of many people’s minds right now. All of the negative news can be hard to stomach, but there are some steps you can take now to ease your mind.
Create a budget – and stick to it! Keep track of every penny, and look closely at your spending to determine ways to cut back. Limit your discretionary purchases, and save any windfalls you may receive.
Pay down credit card debt. Interest rates on credit cards are rising, often with no warning to the consumer, and some credit card issuers have begun to lower credit limits, so now is a good time to be especially prudent. Do not close your lines of credit, however, as you may need access to them during an emergency.
Maintain an adequate emergency savings account. Aim to save enough cash to pay three months worth of bills. Stash savings in an FDIC-insured account for easy access in the event you need to tap into your savings.
Avoid making drastic decisions about your retirement funds. Make an appointment with a financial professional to discuss the long-term implications of the investing decisions you make today.
Most importantly, don’t panic! The situation may very well get worse before it gets better, but, by making wise decisions today, you will be better equipped to ride out this period of economic downturn.
The September/October 2008 issue of the “Loose Change” Newsletter includes the following articles:
| • | Treat Yourself to a Better Budget |
| • | Password Primer |
| • | Co-ops: Another Choice in the Housing Market |
| • | The Other Income-tax Filers |
| • | The Incredible Shrinking Bond Limit |
| • | What’s Your Money Message? |
| • | Trim Taxes Before the Witching Hour |
| • | Time to Reassess? |
| • | When Insurance Doesn’t Cover It |
| • | Roll Toward Retirement with a Roth IRA |
| • | Are Your Stock Funds All They Can Be? |
| • | Don’t Just Take the Money and Run |
| • | Your Assets – Think Outside the Stock |
| • | Home Facts |
| • | “Reverse” Mortgage: Make Sure It’s the Best Option |
| • | Books for Rent |
| • | When There’s a Will |
| • | Refinancing Fees: Are They Negotiable? |
| • | Quiz Yourself |
Contact Kemper Capital Management LLC for all of your investing needs.
Securities offered through Securities America, Inc., Member FINRA/SIPC. Insurance products offered through KCPAG Insurance Services LLC. Advisory services offered through KCPAG Financial Advisors LLC. Kemper Capital Management LLC is the holding company for KCPAG Insurance Services LLC and KCPAG Financial Advisors LLC. Kemper Capital Management and its subsidiaries are not affiliated with Securities America.
If your business utilizes QuickBooks 2008 accounting software to process payroll, please be aware of the following change. Previous QuickBooks versions contain a basic payroll package which includes the necessary forms to complete the payroll tax returns and produce W-2s for year-end reporting. However, the 2008 version does not have the necessary payroll forms available in the basic payroll package.
If you rely on QuickBooks to process your company’s payroll, you need to add the Enhanced Payroll package to your QuickBooks 2008 version to avoid delays related to processing payroll reporting functions. There are two different Enhanced Payroll package options available:
Employers with 1-3 employees
Employers with more than three employees
If QuickBooks is the base for your payroll, we strongly encourage the purchase of this service. If you choose not to make this purchase and Kemper CPA Group LLP performs your monthly, quarterly, or year-end payroll filings, we need your information earlier to make accommodations for the missing forms within your software. The missing forms add to the processing time for our staff and ultimately the cost of completing the reports.
Kemper Technology Consulting and Kemper CPA Group LLP have a number of Certified QuickBooks ProAdvisors available to answer any QuickBooks-related questions you might have. Contact us today!
Kemper Technology Consulting
Robinson, IL
618-546-5633
www.kempertc.com
Evansville, IN • Indianapolis, IN • Paducah, KY • Effingham, IL
Please be advised that, based upon current Internal Revenue Service (IRS) rules and standards, the advice herein is not intended to be used, nor can it be used, as the sole basis for decisions. Additional issues may exist that could affect the treatment of the individual transactions, and this narrative does not provide a conclusion with respect to all such issues.
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