CPA Blog

Should your business add Roth contributions to its 401(k)?

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Published: Monday, 01 March 2021 08:29

Written by Phillip Strickler, CPA.CITP

If your business sponsors a 401(k) plan, you might someday consider adding designated Roth contributions. Here are some factors to explore when deciding whether such a feature would make sense for your company and its employees.

Key differences

Roth contributions differ from other elective deferrals in two key tax respects. First, they’re irrevocably designated to be made on an after-tax basis, rather than pretax. Second, if all applicable requirements are met and the distribution constitutes a “qualified distribution,” the earnings won’t be subject to federal income tax when distributed.

To be qualified, a distribution generally must occur after a five-year waiting period, as well as after the participant reaches age 59½, becomes disabled or dies. Because of the different tax treatment, plans must maintain separate accounts for designated Roth contributions.

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Does your company have an emergency succession plan?

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Published: Monday, 22 February 2021 09:48

Written by Phillip Strickler, CPA.CITP

For business owners, succession planning is ideally a long-term project. You want to begin laying out a smooth ownership transition, and perhaps grooming a successor, years in advance. And you shouldn’t officially hand over the reins until many minute details have been checked and rechecked.

But it doesn’t always work out this way. As the coronavirus (COVID-19) pandemic has made clear, a business owner may suddenly vanish from the picture — leaving the company adrift in a time of crisis. In such an instance, a traditional succession plan may be too cumbersome or indistinct to execute. That’s why every company should create an emergency succession plan.

Contingency people

When preparing for potential disasters in the past, you’ve probably been urged to devise contingency plans to stay operational. In the case of an emergency succession plan, you need to identify contingency people.

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Building customers’ trust in your website

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Published: Monday, 22 February 2021 09:43

Written by Phillip Strickler, CPA.CITP

The events of the past year have taught business owners many important lessons. One of them is that, when a crisis hits, customers turn on their computers and look to their phones. According to one analysis of U.S. Department of Commerce data, consumers spent $347.26 billion online with U.S. retailers in the first half of 2020 — that’s a 30.1% increase from the same period in 2019.

Although online spending moderated a bit as the year went on, the fact remains that people’s expectations of most companies’ websites have soared. In fact, a June 2020 report by software giant Adobe indicated that the pandemic has markedly accelerated the growth of e-commerce — quite possibly by years, not just months.

Whether you sell directly to the buying public or engage primarily in B2B transactions, building customers’ trust in your website is more important than ever.

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Despite some advantages, borrowing from a life insurance policy can be risky.

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Published: Monday, 22 February 2021 09:40

Written by Phillip Strickler, CPA.CITP