What Robin’s Reading: May 2015

Robin Weingast Reading RecsWelcome to a new installment of “What Robin’s Reading,” our bimonthly feature that highlights what the Robin Weingast team is reading to stay current and up-to-date on the issues that will most impact our clients and their benefits planning.

This month we’re reading “Big threat to small biz workers in Obamacare case” and “States Scramble for ‘Plan B’ Ahead of Court Ruling on Obamacare.” This June, the Supreme Court will rule on King v. Burwell, a case that could alter the Affordable Care Act for the almost 8 million people in 24 states who rely on the federal exchange. Pending the ruling, millions of Americans stand to lose their subsidized coverage.

In a “Need to Know” post from last year, we explored how small businesses benefitted from the Affordable Care Act. With this ruling on the horizon, small businesses are particularly vulnerable to any changes to Obamacare. In the meantime, states are preparing for the ruling by creating workaround solutions that would ensure those covered under the Affordable Care Act don’t lose their healthcare coverage.

The Robin Weingast & Associates team is carefully watching to see how the ruling will impact all businesses — small or large. If you have questions, please contact us; we’re here to help.

Need to Know: Making up for Lost Time With Retirement Planning

Robin Weingast retirement planning Congratulations on making it through April and the ever-busy tax season! It’s hard to believe that 2015 is almost half over, but in a few months we’ll be talking year-end wrap ups and 2016 planning. Before the year gets away from us, the Robin Weingast & Associates team wants to focus on an important, time-sensitive topic that impacts everyone: timely retirement planning.

The general rule of thumb is that earlier is better when it comes to retirement planning. But that’s not always an easy rule to follow. Just last month, expert testimony to the US Senate’s Special Committee on Aging revealed that “nearly half (45%) of Americans have no retirement savings…[and] the median retirement-account balance is only $3,000 for working-age households and only $12,000 for households approaching retirement. In two-thirds of working households with earners between ages 55 and 64 years, at least one earner has saved less than one year’s income for retirement.”

If you suspect that you – or your employees – are unprepared for retirement, there are things you can take to get on track. Before you can properly plan, you need to understand where you actually stand. This is the most important step you can take, because it will determine what comes next for your retirement planning. Use this tool from the AARP; it compiles information about you, your spouse, and your current savings and projects what you will need for retirement and if you’re prepared.

Based on what you find out, it’s time to make some potentially tough decisions. Think about where you can trim expenses and how you can cut down on more significant costs – are you at the stage in life where you can downsize your home or apartment? If you need to make significant decreases to your monthly expenses, try using a tool like this, which walks through standard monthly expenses and gives you tips on how to cut costs. Also consider if you’re maximizing your earning potential. Are there part-time or freelance opportunities that can help you close the gap?

A key part of catching up is making sure you understand your current retirement plan and making sure you’re taking full advantage of what’s available to you. Whether you’re an employee who isn’t fully aware of what retirement benefits your company offers, or a manager who wants to make sure your team understands the full details of a retirement plan, it’s wise to keep the lines of communication open. Schedule regular meetings with HR to make sure that you’re making the most beneficial choices.

Having a team always helps. You can count on the Robin S. Weingast & Associates team for the most effective retirement planning strategies at any stage. Contact us today to see how we can help achieve your goals.

What Robin’s Reading: March 2015

Robin Weingast Reading RecsWelcome to the next installment of “What Robin’s Reading,” our bimonthly feature that highlights what the Robin Weingast team is reading to stay current and up-to-date on the issues that will most impact our clients and their benefit planning. This month we’re reading “Determining the Future of Long-Term Care.”

Why are we reading this?

The industry estimate is that over 70% of people will need long-term care at some point in their future. It’s an unavoidable and expensive need, with costs soaring over the past five years (link to RSW post on costs). Last year, long-term care was in the spotlight and we know that it will be a pivotal issue in the years ahead. There will also undoubtedly be legislative focus on long-term care expense taxation issues that may change long-term care planning strategies.

The article recognizes that strong long-term care “requires a well functioning interdisciplinary care team, innovative delivery systems, and carefully coordinated care. This cannot be done alone, but will sometimes require a strong strategic partner.”

The Robin S. Weingast & Associates team prides itself on being your go-to strategic partner. We make it our business to have the expertise needed to address our clients’ most pressing and important concerns and we also offer innovative, tax-favorable solutions to long-term care planning. Contact us and let us put our knowledge to work for you.

Resource of the Month: Choosing a Retirement Solution for Your Small Business

Robin_Weingast_small_businessThere are over 27 million small businesses in the United States, and small businesses have accounted for 64% of the country’s job creation in the past 20 years. A small business is an independent company with fewer than 500 employees, and it’s becoming clear that small businesses are a vital part of the economic landscape.

The Robin S. Weingast & Associates team knows that small business owners are often so busy with the day-to-day realities of running their companies that it can be a challenge to find time to focus on other important areas – areas like employee benefits. That’s where we come in: using our 30 years of expertise, we work with small business owners to create custom plans that are tailored to each company’s specific goals and needs.

A key part of an employee benefit plan is a retirement savings plan. Retirement savings plans are not only beneficial as recruitment and retention tools, they also offer significant tax advantages to business owners. They are the cornerstone of a strong employee benefit plan, which is why this month’s resource is devoted exclusively to that topic. If you’re a small business owner, than download “Choosing a Retirement Solution for Your Small Business” today. This guide from the IRS offers a thorough look at the advantages and options that small business owners have for offering retirement plans.

Download “Choosing a Retirement Solution for Your Small Business” today.

If you’re a small business owner who wants to make sure you’re offering a competitive and financially advantageous benefits package to your employees, then download our resource and contact us today. Our team of experts will evaluate your current plan and recommend changes that work for you, your staff, and your bottom line.

The Robin S. Weingast & Associates “Resource of the Month” is a monthly feature that offers a resource guide about an important aspect of your business—including retirement plans, life insurance policies, and much, much more. Each resource guide that we feature will be available for you to download so that you can access our Resource of the Month whenever you need it. It’s the knowledge you need, right at your fingertips! Explore our Resource of the Month series.

Need to Know: Getting a Copy of a Prior Year Tax Return or Transcript

Robin Weingast Tax ReturnKeeping copies of your tax returns is a smart habit. In addition to needing them for any questions the IRS may have, you will most likely need tax returns to apply for a home mortgage or if you and/or a dependent apply for a student loan. If you haven’t kept copies, the IRS can help you get a copy of a return or even a transcript of other tax information you might need.

What is a tax transcript?

There are two kinds of tax transcripts:

1. A tax return transcript shows most line items from your originally submitted return s well as accompanying forms and schedules you may have filed. It does not include any changes made after filing
2. A tax account transcript shows any changes that you or the IRS made to your return after filing. This transcript includes marital status, return type, adjusted gross income, and taxable income.
It’s important to understand that these are not actual copies of your filed, processed tax returns.

How can I get transcripts from prior years?

Getting transcripts is free, and you can get them for the current year and past three years. You can order transcripts:

Online at IRS.gov, using the “Order a Transcript” option (link: Order a Transcript tool)
• By phone at 800-908-9946, using their menu options
• By mail, by completing a Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a tax account transcript should use Form 4506-T, Request for Transcript of Tax Return. The forms are available online, or by calling 800-TAX-FORM

What if I need a copy of my processed, filed tax return?

For a fee* ($57 per copy), you can obtain a processed, filed tax return. Simply complete Form 4506 and mail it to the address listed for your area.

In general, you can obtain a current year’s return as well as returns from the past six years, but these requests may take up to 60 days to fulfill.

*If you live in a Presidentially declared disaster area, the IRS may waive the fee to obtain copies of your tax returns. Visit IRS.gov and select the ‘Disaster Relief’ link in the lower left corner of the page for more about IRS disaster assistance.

For more information

If you’d like to understand this process step-by-step, you can watch the video How to Request a Copy of Your Tax Return.

Have more questions?

The Robin Weingast team is well versed in the many resources that are available to business owners and individuals. Contact us today for a free consultation. 

IRS Releases 401(k) Compliance Check Report

Robin Weingast checklistIn late March, the IRS released the results of its 401(k) Compliance Check Questionnaire Project. The IRS embarked on this project in 2012 as a way to assess the compliance of largest retirement plan market segment in order to assure the overall long-term health of the American retirement system.

Their questionnaire was sent to a random sample of 1,200 401(k) plan sponsors that filed a Form 5500 for the 2007 plan year.  Questions  were centered around topics of: demographics, plan participation, contributions, designated Roth features, distributions, top-heavy and nondiscrimination testing, IRS correction programs and plan administration.

The IRS recently published both a summary of key findings as well as a comprehensive report. You can download the 91-page report here.

It is clear that the IRS is focused on ensuring plan compliance. Robin Weingast and the entire Robin S. Weingast and Associates team are prepared to assist you in making sure your plan is compliant. Robin Weingast and her team can also assist you in providing ancillary “retirement” benefits to select groups of key employees and/or owners, without including all of the employees and to “Legally Discriminate” to include any one you want to participate in the plan. Contact Robin S. Weingast and Associates to learn more.

What’s your long-term plan?

Robin Weingast piggy bank ImageA recent Daily News article by Phyllis Furman reported on the shockingly high annual cost of private nursing home rooms in New York City. According to Genworth’s annual Cost of Care Survey, here’s what you can expect for a private nursing home room:

  • A room in Manhattan costs $180,000 per year
  • A room in Queens costs $160,000 per year
  • A room on Long Island costs $140,000 per year

 

When you compare this to the national median cost of $84,000 per year, NYC can be a pricey place to spend your golden years. Only San Francisco is more expensive.

These prices are compounded by the fact that the average nursing home stay is 2.5 years, and, according to Genworth, prices rise approximately 5% each year.

What’s contributing to these outrageous costs? According to Genworth, it’s property costs, staff, insurance, and maintenance.

When considering a home health aide, NYC is closer in line to the national median rate of $19/hour. NYC residents pay a median rate of $22/hour. This has become a popular option for NYC residents, and seven out of ten of Genworth’s first-time clients choose this option.

It’s important to note that Medicare generally won’t pay for nursing home stays or home care. Medicaid offers some funding potentials, but you will need to familiarize yourself with their eligibility requirements. Another option is to purchase a long-term care policy.

The other factor at play is that the cost of a long-term care policy today runs almost 30% to 50% more than it did just three to five years ago.

According to the American Association for Long-Term Care Insurance, a 60-year-old couple should expect to pay about $2,000 a year for $162,000 coverage for each spouse.

The team of experts at Robin S. Weingast and Associates can help you with all of your long-term care policy needs. We are here to answer questions and to help you put a plan in place that will make sure you and your loved ones are prepared for whatever long-term care situation they require. Contact us today for a free consultation and to discuss how to create a long-term care plan.

About the March 15 ADP/ACP Test

Robin Weingast Graph ImageWhat is the ADP/ACP Test?
The ADP/ACP test, which stands for Actual Deferral Percentage/Actual Contribution Percentage, is a test that determines your plan’s equitability and ensures that all participants benefit in a non-discriminatory manner. More highly compensated employees—typically owners, executives, or upper level managers—may not benefit disproportionately from the plan’s 401(k) feature.

Why does ADP/ACP test matter?
In addition to being an IRS requirement, The ADP/ACP test is one of the more significant tests of the year because you will have to deal with the results of the test and be mindful of the test’s outcome for the entire year. Because of that, the plan sponsor will consistently be paying attention to the many factors that impact the test results.

In addition, missing the deadline can result in penalties if the adjustments, if required, are not made before March 15.

What impacts the ADP/ACP test?
The ADP/ACP Tests primarily exists to make sure that employers are not running 401(k) plans that primarily benefit owners and highly paid employees. For example, a plan may be either (a) structured to, or (b) in actual operation, provide disproportionally low benefits to rank and file employees. How? An example of a structural violation would be providing matching contributions only to those who contribute large amounts to the plan each year. Obviously, highly compensated employees are in a much better position to make such contributions. In this way, they are benefitting significantly more from the plan. An example of an operational violation would be high levels of employee participation by highly compensated employees and very much lower levels by rank and file employees.

The ADP/ACP Tests are set up to ensure that inequities between rank and file and owners/highly compensated, that exceed permitted IRS differentials, do not exist.

How does the ADP/ACP test do that?
Step one: Your employees are separated into two groups—highly compensated and non-highly compensated.

Step two: The ADP/ACP test evaluates the average contribution percent of each group. The average contribution percent of the non-highly compensated group directly controls the allowable average of the highly compensated.

What can I do to prepare for the ADP/ACP test?
Testing plans is a complex process, and the IRS requires many different kinds of tests for each plan.

At Robin S. Weingast and Associates, we focus on IRS Tax Qualified Retirement Plans that, when properly designed, will allow the business owner, family members, and even key employees to contribute higher amounts than the test would normally provide, if certain contributions are made by the employer to the plan.

These are called Safe Harbor contributions, and will allow the overriding of this test so that the highly compensated employees can indeed benefit to a greater extent.

Custom Designed Plans that Favor Owners, Officers and/or Highly Compensated Employees
Robin S. Weingast and Associates, Inc. specializes in custom designed plans that “legally discriminate” in favor of selected classes of owners/employees. These plans can be designed to maximize contributions to the selected class(es) while providing the minimum benefits that the law requires to all other plan participants.

The result is a highly effective and efficient retirement savings vehicle for the selected classes.

Our team can provide this value added service and is equipped to advise and conduct ADP/ACP tests, as well as the many other tests required by the IRS. If you would like a free consultation, please contact us, and we would be happy to work with you.