100 Cost-Effective Articles - Business Planning
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Employee Incentives—529 Plans
Most employers recognize that, for many of their employees, saving for a child's education is a top priority. With the cost of a private four-year college education averaging over of $120,000 (Source: Trends in College Pricing—2007, The College Board), saving early has become paramount in helping to ensure a child's schooling and, for many employees, their own continuing education. In particular, 529 college savings plans—named for Internal Revenue Code 529—are a popular way to set money aside for college and graduate school.
(1,060 words)
Taking a Closer Look at the FMLA
One way for companies to attract and retain high quality workers is to broaden their family and medical leave policies. From an employee’s perspective, the guarantee of a job at the end of such a leave is an extremely desirable aspect of an overall benefits package. Employers can benefit too, since low employee turnover decreases training costs and results in fewer disruptions to continuity. Thus, many companies recognize that it makes good business sense to adopt a family-friendly approach, because the benefits outweigh—or at least offset—the costs that may otherwise be incurred.
(609 words)
Severance Packages—Not Just for Top Management
While many companies offer comprehensive severance packages to their key executives, they typically have a different plan for other workers. In most cases, these plans are usually less involved—with terminated employees receiving severance pay of, perhaps, one week's salary for every year of service. However, a new trend that never would have been considered in the past is to give middle-level employees up-front severance packages. The question of the appropriateness of a severance package needs to be addressed on an individual basis, but there are a few basic questions that should be asked of a prospective employer.
(545 words)
Attract, Retain, and Reward with Executive Bonus Plans
Today, many business owners see the executive bonus plan as one of the most cost-effective fringe benefit plans available for solving personal needs in the new millennium. The executive bonus plan may be advantageous to both the business and the executive. On one hand, the business can generally deduct life insurance premiums and has total discretion in selecting not only who can participate, but also the amount of premiums and coverage to be provided. On the other hand, during his or her lifetime, the executive is free to access the policy's cash values.
(527 words)
Protecting Your Business "Keys"
If you employ a key person who significantly contributes to the success of your business, have you considered the impact losing him or her could have on your operations? Key person life insurance can help protect your business from the financial consequences of a key employee's death.
(743 words)
Profit-Sharing—Age and Service Weigh In
For quite some time, profit-sharing plans have been recognized by many small business owners and professionals as effective, qualified retirement savings mechanisms. Generally speaking, these plans allow employees to share company profits. Two popular plans are the age-weighted profit-sharing planand the service-weighted profit-sharing plan. With such plans, it's possible to base contributions on a participant's age or length of service, as well as salary, thus benefiting older participants and loyal employees without running afoul of Internal Revenue Service (IRS) nondiscrimination requirements.
(597 words)
A Survey of Employer-Sponsored Retirement Benefits
As an employer, you most likely are concerned with your employees' well-being and security. Beyond the typical health insurance benefits, retirement benefits are an integral part of an employee's overall compensation. Giving employees a sense of security regarding their retirement can be beneficial for both you and your employees. It can demonstrate to quality employees, or prospective employees, that your concern for their welfare extends beyond the office walls and their years of service.
(440 words)
Corrective Programs and Your Retirement Plan
Setting up a qualified retirement plan always requires thought and analysis. In addition to tax deductions, business owners and executives must focus on many administrative aspects and procedures if they wish to sponsor a qualified retirement plan and keep it from becoming "defective." In the past, it was difficult for business executives to take appropriate corrective measures because the Internal Revenue Service (IRS) did not always clarify the necessary requirements. Today, the IRS has implemented specific, technical guidelines to make it possible—and easier—for business executives to "self-correct" defects on a voluntary basis.
(558 words)
ERISA Guidelines and Requirements
The Employee Retirement Income Security Act of 1974 (ERISA)is the federal law that governs employee benefit plans and serves to protect plan participants. As a general guiding principle, compliance under ERISA means treating all plan participants equally in terms of uniform eligibility requirements and not discriminating in favor of highly paid employees (HCEs).
(501 words)
PEOs and Your Small Business
When you dreamed of running your own business, you probably never thought much about ADA, EPPA, USERRA, or COBRA. What do these acronyms stand for? ADA is the Americans with Disabilities Act; EPPA, the Employee Polygraph Protection Act; USERRA, the Uniformed Services Employment and Reemployment Rights Act; and COBRA, the Consolidated Omnibus Budget Reconciliation Act. These are among three dozen or so federal laws and regulations—in addition to common law, case law, and state and local laws—that business owners need to comply with as employers.
(415 words)
401(k)s: The Competitive Advantage
An attractive benefit plan can play a fundamental role in recruiting and retaining qualified staff. And, when trying to save for the future, a 401(k)retirement savings plan can help employees attain their retirement objectives on a tax-advantaged basis. Named for the section of the Internal Revenue Code (IRC) that created it, a 401(k) plan may be one of the most popular and valuable fringe benefits available. Although the technical aspects of 401(k)s can be complex, the advantages of these plans can be far-reaching.
(679 words)
Playing It SIMPLE
Small businesses have never had it easy when it comes to employer-sponsored retirement plans. Nondiscrimination ruleshave traditionally limited the ability of highly-compensated owners and executives to maximize contributions to such plans. Established in 1996, SIMPLEs (Savings Incentive Match Plans for Employees)make employer-sponsored retirement plans more appealing for small businesses. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) makes SIMPLEs, and other qualified plans, even more favorable in coming years.
(551 words)
Business Planning with SEPs
Today, the Simplified Employee Pension (SEP) plan is a popular retirement savings option for self-employed sole proprietors and partners. However, before these individuals start a SEP, it's important they recognize the distinctions between contributions made under a SEP for employees and contributions that benefit the self-employed sole proprietor or partner.
(533 words)
Business Continuation—Planning for Success
Successful business owners invest a great deal of time and effort in building their companies. With the day-to-day demands, it is often difficult to imagine stepping down for retirement. Yet, in order to help build financial security for retirement and ensure business continuation, it is important to plan ahead. Business succession planningcan establish retirement income for a retiring business owner, as well as smooth the transfer of operations and/or ownership to family or another entity. In addition, a succession plan can also provide structure for unforeseen events, such as death or disability.
(755 words)
Investment Fundamentals for Today's Business Executive
Most small business executives know that it makes sense to build a personal investment portfolio apart from the investment in their own companies, but that's often easier said than done. In reality, running a small business can require years of risk and self-sacrifice. Often, a business owner or executive may be returning most, or all, of his or her earnings back into the business, leaving little or no time for planning personal finances. So, what can you, as a business owner or executive, do to help ensure your personal finances receive some much needed attention?
(437 words)
Winning Strategies for Business Succession Planning
As a business owner, you've probably worked hard to build and manage a business that provides income and wealth for you and your family. In fact, most of your time, energy, and finances may have been invested in your business. As a result, it has more than likely become a significant portion of your estate. Unfortunately, the business that provides for your family during your lifetime may not do so at your death. In many cases, only a small number of family businesses are actually passed on to the next generation.
(512 words)
Securing Lender Confidence with Term Life
As a business owner, you have probably worked long and hard to help build a successful company. In today's economy, with strong demand for many products and services, you may want to take full advantage of your opportunities to expand. Yet, even when profit projections look good and a project is backed by a sound business plan, your banker may be reluctant to lend the funds necessary for expansion. So, what can be done to resolve the situation? Life insurancemay offer an answer. (655 words)
Personal Finance for Business Owners
In the rush of day-to-day business activities, many small business owners may lose sight of what they had originally hoped to accomplish from their hard work. Over time, as a business grows, personal objectives that may have been suitable at one stage in life often change. Do you ever stop to reevaluate and update your personal goals and priorities?
(397 words)
Creditor Protection and FLPs
The family limited partnership (FLP) has been touted as a powerful tool for estate planning and for managing and protecting family wealth. One of its major benefits—increased creditor protection—has been emphasized with, perhaps, too little attention given to the potential complications that could arise. (539 words)
Building Promise with Effective Cost Management
From the smallest proprietorship to the largest international conglomerate, cutting costs can often be perceived as a "quick fix" toward improving financial results. However, such business decisions may not always be in the best long-term interest of an otherwise healthy company. Many business owners react to unexpected pressures by reducing costs without a definite plan of action; their course is reactive instead of proactive. However, this "strategy" may become random and shortsighted unless it's based on a company's business plan. While an immediate need may appear to have been alleviated, in some cases only the symptoms—rather than the real problems—may have been addressed.
(541 words)
Tax Deductions for Your Home Office
Entrepreneurs, small business owners, and those who work at home may be considering utilizing the home office deduction when they file their taxes this year. This deduction can be advantageous, but there are several requirements that must be met before you can claim it as your own. The Internal Revenue Service (IRS) has exacting guidelines that your business must meet in order to qualify for the home office deduction.
(941 words)
Guidelines for Expense Reimbursement and Deductions
Most executives are aware they can deduct certain expenses (e.g., travel, lodging, entertainment) incurred while performing services for their employer. Typically, the undertakings that involve employee business expenses include the following: sales activities, temporary work assignments in different locations, work-related conferences, and job-related education. In many cases, employers will reimburse employees for some (or all) expenses under either an accountable or nonaccountable plan.
(459 words)
The "Benefits" of Section 105 Plans
Section 105 of the Internal Revenue Code may very well be one of the "best-kept secrets" for managing your company's health care costs. The medical reimbursement plans allowed under Section 105 provide sole proprietors, partnerships, C corporations, and limited liability companies (LLCs)a full tax deduction for employee medical benefits. This includes premiums paid to fund employee/dependent health insurance and other non-insured medical expenses (e.g., dental and vision care). As a small business owner, finding the right combination of employee benefits and tax savings is important to your company's cost management strategy.
(445 words)
Employee Benefits—An Overview
In order to remain competitive, as well as attract and retain top employees, employers are faced with the task of creating a winning compensation strategy that will not only accomplish these objectives, but will also stay in line with corporate budgeting constraints. It's a fact that employee compensation is much more than just a salary. It can encompass all the "perks," such as vacation and sick time, company vehicles, corporate memberships, and a variety of benefit options designed to provide employees and their families with, at a minimum, health insurance and retirement income. While employers are legally obligated to provide certain state and federally sponsored benefits, the majority of employers also offer, and often contribute to, additional employee benefits.
(803 words)
Roth 401(k)s Help Employees Save for Retirement
While the federal government has created a number of tax-advantaged savings accounts designed to help lower- and middle-income workers save for retirement, these plans tend be less useful for employees earning larger salaries. But highly compensated individuals currently not permitted to contribute to Roth IRAs, or younger workers expecting to be in higher tax brackets when they retire, stand to benefit when companies offer employees the option of contributing after-tax dollars to a Roth 401(k).
(612 words)