As part of Congress’ newly passed American Taxpayers Relief Act, there are now more opportunities to convert pre-tax savings in a 401k plan into Roth savings. The requirement that an account balance can only be converted to Roth if the amount is otherwise distributable is being eliminated.
A 401(k), 403(b) or 457(b) plan which permits Roth elective contributions can allow any amount in a non-Roth account to be converted to a Roth account. This is a permanent provision, effective for transfers after December 31, 2012.
You may want to add this feature to your retirement plans as an added employee benefit. Some of your key employees will be interested in these conversions, which previously would have entailed incurring a 10% penalty unless the employee was retiring, terminating their job or turning 59½.
Formerly called the “Retirement Savings Contributions Credit”, the Saver’s Credit is a tax credit aimed at helping low to moderate income taxpayers save for retirement. This income tax credit is available to eligible taxpayers who make contributions to a traditional IRA, an employer-sponsored 401(k) plan or certain other eligible retirement plans. This credit is in addition to any other tax benefits your participants receive for contributions to the plan.
Eligible participants can receive a tax credit of up to 50% of the first $2,000 in retirement contributions made in 2012. If you are providing an employee matching program, participants can also benefit from the match. This is a valuable tax credit that can be applied, dollar for dollar, against any income taxes owed, creating a savings for your participants by reducing their taxable income.
More participants than you think may still not be aware of this simple, effective tax savings tool. Be sure to spread the word for your participants with this document detailing the Saver’s Credit.
We’d like to introduce our clients to a service we have become aware of, Integrity Merchant Solutions (IMS). After meeting recently with IMS’ Lisa Schwartz, we have learned that many local and national businesses and organizations are taking advantage of savings on their credit card processing fees by using IMS’ services.
IMS has been in business locally for over four years and has over 3500 clients. “We can help any business that takes credit cards. We work with many area non-profits, B2B companies and manufacturers, parking companies, retail stores and medical practices, basically anyone who needs a merchant processor, Saving on merchant processing is one of the easiest ways for a business to save dollars to the bottom line.” Lisa told us in our visit with her. She works with companies and organizations to analyze their current credit card processing fees and find them ways to save on merchant credit card fees. IMS is the endorsed processor for the Hartford Dental Society and TANGO Alliance of Non-Profits.
What we like about Lisa Schwartz and IMS is that they share some of PASI’s most important values: honesty, development of a long-term business relationship, and a true commitment to service. While credit card processing is considered “a commodity” by some, the fact that IMS is a company with strong Hartford area roots serving local companies means you can expect more personalized service and a closer working relationship with Lisa. “We really help our clients and hold their hands through the process. Many of our competitors lock companies in to long-term equipment leases, which are very expensive and not to the client’s advantage. but we don’t. IMS always tries to use current equipment or suggests purchasing outright at reasonable rates, which can save thousands over leasing. We are able to act more independently and really look after clients’ best interests,” Lisa explained.
A very detail-oriented professional, Lisa seems to really enjoy the analytical part of her job. She’s careful about examining how clients have been set up by their current processors to make sure they are getting the very best debit rates and interchange structures for their needs. She shared with us that she has been able to help many local non-profits who were not set up to take advantage of special programs offered by the card companies for non-profits. In one case in particular, she was able to help a local arts organization save over $30,000 a year in processing fees and has done the same for social service organizations, schools and hospitals. “Rewards cards can be 1.95% for corporations, but only 1.35% for non-profits – but they have to be coded properly by their merchant processor to get that savings,” she explained.
We like IMS’ commitment to providing transparency in their statements to customers so they can audit their credit card processing costs more easily, and their consultative approach to helping customers like our clients get a true handle on their current fees and potential savings. Lisa is dedicated to really educating her customers about important pricing structures that will save them fees. For instance, many manufacturers who are eligible for lower “Level 3 Line_Item Detail Pricing” have found it was not implemented by their former processors. “Some of them might just not know it’s even available. They might offer a manufacturer a set percentage off just to ‘lower their rates,’ but they should really be offering Level 3 Pricing, which can save manufacturers and distributors thousands of dollars if they accept Purchasing or Government cards or process large dollar transactions. The manufacturer just wouldn’t know to ask for it. That’s our job, to recommend it!,” Lisa says.
You can get a free, no-obligation analysis from Lisa simply by scanning a copy of your most current merchant processing statement to her or by faxing it to her attention at 860-760-6307. She can be reached as follows:
Integrity Merchant Solutions
19 Lewis Street
Hartford, CT 06103
David M. Beck, CPA, QPA, ERPA
Director – Administration Services
Bryce Raymond, QPA, QKA, QPFC
Manager – Administration Services
Quynhchau Le, MBA, CPC, QPA, QKA, ERPA
Manager – Administration Services
Marie Harabin has successfully passed all her exams and now has obtained her Qualified 401K Administrator designation (QKA) through ASPPA.
She is the 8th member of PASI to have earned this designation.
PASI is pleased to welcome the following organization to our family of clients:
March 15, 2013
- Deadline for ADP Test refunds
- Contributions for Corporations Due Date (not on extension)
April 1, 2013
- Required Minimum Distributions (first year only)
- Contributions for unincorporated Due Date (not on extension)
July 31, 2013
- Form 5500 Due Date (not on extension)
Congress has begun working on tax reform. The last time Congress passed tax reform in 1986 they cut the 401(k) contribution limit by 70%. Proposals are already being considered today to cut the 401(k) contribution limit again. If that happens, the retirement security for millions of Americans will be jeopardized.
It only takes a few seconds to go to www.savemy401k.com and send your Congressman an email that says, “Stay away from my 401(k)!”. What’s at stake? Your future!