Atlanta CPA Provides Tax Tips for Atlanta Business Owners to Prepare Their Georgia Corporate Income Tax Returns…A Financial Survivability Series 

This is the Fourth of a Series of how you can look to the future by analyzing the present to help plan both short and long term for the future. Looking not to our own devices but to serve the needs of others is always on the forefront of our advice as be both start a New Year and Prepare for Tax Season. Being sure all business clients have a sound basis and broad understanding of Corporate Tax Law should be a CPA’s primary responsibility to ensure that you Pay Only Your Lowest Legal Possible Tax. Below is a sample letter I might send a client to ensure that they both understand and can apply Tax Law to both their Income Tax Returns and to tax plan for accordingly:

Your Returns are  essentially 100% done as I wait on the final forms to be approved by the IRS. 

Please be sure that you do not pay any Shareholder Distributions in excess of your Tax Basis/Retained Earnings account. Otherwise all shareholders of your S Corporation may have to pay capital gain taxes on their personal returns as a result of distributions in excess of their Tax Basis/Retained Earnings. Care should be taken to ensure that all issues affecting Tax Basis are reflected including loans both to and from shareholders. In subsequent years, when basis/profits is higher than you can pay out these monies to the business owners as Shareholder Distributions. 

In 2008 Georgia changed the way the Apportionment of Profits and Losses are reflected. Starting that year the State Apportionment on Georgia S Corporation Returns was changed to say that tax is imposes only on that portion of the business income which is reasonably attributable to Georgia sources and property owned and business done within the state….receipts shall be deemed to have been derived from business done in Georgia if there were received from products shipped or delivered to customers within the state.  

Below you will find substantive articles to help Atlanta Small Business Owners plan for their yearend tax liability and to ensure they stay in active compliance with all tax, regulatory and licensing rules. 

How to Avoid an IRS Audit for Atlanta Taxpayers
Discover simple steps that you can do to help prevent an IRS audit. Though the tax code is at times very difficult to understand and comply, these basic simple steps will help you avoid an IRS audit. See http://www.hiscpa.com/avoiding-audits.html

Solving IRS Tax Problems: Submitting an Georgia Offer in Compromise
When all else fails and if you qualify, the IRS and Georgia both have a program which will enable you to work to solve the severest tax problems. Visit http://www.hiscpa.com/offer-in-compromise.html

Utilizing IRS Installment Plans for Metro Atlanta Taxpayers to Pay Your Past Due Taxes
The IRS has long been in the business of helping taxpayers get back into the system to ensure that taxpayers are able to pay their taxes over time. For those who do not qualify for an Offer in Compromise or to pay the taxes and interest in full, while seeking penalty abatement, an Installment Plan is a prudent and wise choice and alternative to get your past taxes due paid and current. See http://www.hiscpa.com/installment-plans.html

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!  

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas

Atlanta CPA Provides Top 5 Financial Tips for Atlanta Business & Individual Taxpayers for 2010 as You Plan for Retirement…A Financial Survivability Series

Though there are many financial advisers and CPA’s alike of all shapes, sizes and types have views otherwise, I believe the best way to survive a recession is to always act like you are in one. These precepts, if you let them, will do much to change your paradigm about the way you spend and invest money. For it is by our leaning on the wisdom of others that we are best able to learn what we do not know and to avoid costly burdensome and avoidable mistakes. Just as we are to put on the Very Armor of God to be prepared for life’s challenges, so should we be wise and judicious in managing all of your financial affairs. Also, it is prudent to always keep in mind that all good and perfect gifts come from God and as revealed in the Parable of the Talents, God will take away from all those who fail to be a wise manager. These tips will do much, if you let them, to change your financial peace and to allow you to sleep more peacefully at night: 

1.      Ten Year Rule. Watch the Little Things. Just as in life many smaller indiscretions lead to bigger ones so it is with managing your money. Being sure to watch and limit, what appears to be the little purchases, will do much to help you build a nest egg and to plan for retirement. One of the best tips I uses for this I call the Ten Year Rule. All too frequently I hear people describe and expense as being insignificant by saying “it’s only a $100 a month.” By applying the Ten Year Rule to his thinking you will soon discover that what appears to be only a $100 a month is indeed $1200 a year and is $12,000 for a decade, and that’s not “chump change”.

2.      Be Debt Adverse. In the Bible we are encouraged as a Body of Believers to always a borrower and a debtor be. The recession was caused predominantly by greed. Greed by those who wanted to make every loan possible regardless of time tested techniques in determining fairly the capacity of debtors to repay a loan and greed by those who procured loans, where any small hiccup would derail their ability to repay a loan. Just as in all phases of life, there is a Day of Reckoning that avails itself, especially to all who are unduly financially burdened.

3.      Limit the Rewards. Several years ago I was working with a client who had achieved a financial goal they had set for themselves and set out and purchased a luxury vehicle costing over $50,000. They did this all the while knowing that their business owed over $200,000 in taxes. I believe that along the way we should always stop to celebrate achievements, graduations, job promotions and many other varied issues of success. However these should be tempered with practicality, rather than debt. Rewards in life will often be large and luxurious, but the price tag should not include going into debt. Though many a bride and groom want a big wedding the celebrate the joy of their union as well they should, but this expenditure should be appropriate given the size of their income and bank account and not based upon the availability of a credit card balance. For example at a recent wedding I attended the groom actually served as the wedding coordinator and family members volunteered with many of the set up issues to dramatically limit their expenses, while sacrificing nothing on the event itself.

4.      Do the Opposite. This advice is not for the faint hearted or for those who sleep lightly at night for it is often our passions and not our logic that dictates our steps. History has taught us that it is when the market is soaring higher than higher that our human frailty dictates that we will buy at this time guaranteeing that we will buy when the market is at or approaching its peak. Conversely it is when the marked is in a tailspin and values are plummeting that people are prone to jump out of the market thereby guaranteeing the sales price received approximates the lowest price possible. Whether in good markets or bad, I believe basic investment strategies should not change. Keeping in mind your mind open and all the options available at the forefront of your mind will do much to ensure that you have peace of mind when making financial decisions. Although I do not look forward to a down market as this would be imprudent; however I do take advantage of a soft market to invest as stocks and investment options are all at bargain prices.

5.      Play Act. I bet this is one you have never heard before, but I believe Play Acting will do much to avoid problematic spending, acquiring debt and all types of investing decisions. The goal of Play Acting is to ask the “What If” questions. What if questions include, what happens if I get sick, become disabled, the market tanks, and my spouse or myself lose a job or even die? What am I going to do? What is my wife and family doing to do if I leave them in a predicament unable to take care of or fend for themselves as I have unduly burdened myself or them, by mortgaging their future with no margin for any financial miscue of any type. It is also prudent to Play Act before putting money in the Stock Market as the many varied and highly likely ups and downs in the market will do much to challenge but all of the very seasoned investor. Stock Market is not for everyone so do not be led to pursue any investment where you are unable or unwilling emotionally or financially to burden the risk and still sleep at night.

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html  

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 Proudly serving Duluth, GA, Gwinnett County and Beyond.  

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, and Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.  

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Atlanta CPA Provides Top 10 Business Resolutions for Atlanta Entrepreneurs for 2010…A Financial Survivability Series 

This is the Second of a Series of how you can look to the future by analyzing the present to help plan both short and long term for the future. Business Owners throughout Metro Atlanta will continue to be challenged as the U.S. economy strives to unlock itself from the economic frailties which still hold it down. Struggling with a Weakening Dollar, a High Jobless Rate, Limited Demand and Purchasing Power still have to overcome to get our economic steam engine back on track. Until prudence becomes a fore bearer in all economic decisions our economy will struggle and our government will continue to get bigger. Change happens, as in all issues; at the base level and it is therefore at this point that business owners need to focus their efforts to both streamline their business and to maximize profitability. These Top 10 Business Resolutions will enhance your business and help ensure your company’s long-term survivability. 

1. Manage Your Margins. Knowing what you make on every single product, line and in totality is perhaps the single biggest predictor of a company’s total year profits. Managing Cost of Goods Sold is essential and is frequently the difference between an adequate economic return on goods and services on one end of the spectrum to dismal profits and losses on the other.
2. Have a Budget. Don’t live by the old adage, aim at nothing and your will hit bit it, but rather strive to know and anticipate trends in the international and local economy, spending habits and economic variables. Though life is what happens, while one is busy making plans, the budgeting process itself, more so that then end result, will do much to help you gain added insight and information throughout the year in order to transcend individual decisions, while focusing on the bigger picture.
3. Prepare a Cash Flow. The adage Cash is King is prevalent and necessary in both a down economy and when managing a business. All too frequently I have watched as business owners spend what appears to be excess funds, while immediate and fiscal needs will soon deplete  what appears to be an abundance. Preparing a cash flow statement each time a substantive expense is contemplated will do much to ensure that you company does not run out of cash when it needs it the most.
4. Utilize Your Financials. Knowing where you are is the best information one might have in order to get to where you are going. Just as a ship on the ocean determines where they are at by using the stars and a sextant, the financial statements of the business owner will help ensure that you are aware of your available cash, trends, overall debt, profitability and sales. This information is the single best source in which an entrepreneur can make wise and informed business decisions.
5. Have a Plan B Ready. No matter what one expects and plans for, contingencies will occur disrupting your solace and challenging your resolve. Therefore it is prudent and well advised to expect the unexpected and be ready no matter what occurs. It is advantageous to consistently keep alive in your planning variables the losing of your biggest client or your best employee going elsewhere. Business Owners who make such allowances will thrive and not just survive when financial variables rock their world.
6. Develop a Strong Web Presence. As the world continues to shrink with the advantages of technology and the Internet intertwine our world, having a web presence is becoming more essential that ever before. The world now does a large portion of its shopping on-line and is expected to grow yet larger still. It is not unheard uncommon to hear business owners remark that an increasingly larger portion of their business is being produce solely from marketing their business off of the World Wide Web. Many business owners and retail users alike will look first, predominantly and solely to your web presence in making their financial and purchasing decisions.
7. Developing a Sound Management Team. In the increasingly complexity of this world it is increasingly necessary to have sources for all of your most critical business needs. Having a CPA, a banker, an attorney, a financial planner and a good insurance agent are all components of a good management team, which will be required to take your business to the next level. Knowing when to call on them is much more of an art form than a science. Working most closely with your CPA and closest financial advisers will do much to ensure your business survives.
8. CPA: Never Underestimate the Value. I believe that this should be a category unto itself as a Good Business CPA will be well versed in the various tax issues, financial statements, budgeting, cash flow, and personnel issues. A Good CPA is worth their weight in gold to help you avoid the pitfalls and mistakes that imprudent owners will fall prey to, as they mistakenly make major financial decisions and commitments, while failing to contemplate the longer range impact of these decisions. A Business Owner who seeks wise counsel is indeed following Proverbs of the Old Testament.
9. Procure Lines of Credit in Advance. There is nothing more challenging nor sad than a business owner who fails to plan in good times, for the bad ones which are always to follow. Having a credit line, procuring needed sources of financing whether permanent in nature, leases or SBA loans is essential to overcoming financial challenges that will occur along the way.
10. The Devil is in the Details. Though a funny slogan, nothing could be more in line with the truth. Taxes, licenses, administrative details, income tax planning and all of the many varied payroll tax issues are all capable of derailing as well oiled train. Not taking care of these issues the first time correctly will ensure that your world and your business will not be the rosy place you once imagined. Taking care of all of the many tax, licensing, incorporating and trade marking issues are all essential pieces of a sound business model. 

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 Proudly serving Duluth, GA, Gwinnett County and Beyond. 

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html 

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, and Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping. 

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Atlanta CPA Provides Top 10 Tax Tips for Atlanta Business Owners for 2010…A Financial Survivability Series 

This is the First of a Series of how you can look to the future by analyzing the present to help plan both short and long term for the future. Looking not to our own devices but to serve the needs of others is always on the forefront of our advice as be both start a New Year and Prepare for Tax Season. These time tested techniques will do much to help ensure that you Keep Your Tax Bill as Low as Legally Possible, Avoid Unnecessary Fines and Penalties and Operate Your Business & Administration Issues Efficiently: 

1.      Check your Entity. Tax Entity Choice in Georgia and Throughout the U.S. is one of the most critical issues in determining if you are operating your business in a tax and liability model that is most applicable and efficient for your business.

2.      Utilizing a Payroll Service. Payroll is perhaps the biggest bane of many who strive to go it alone. Also a payroll service is going to be able to offer the processing of your payroll checks and 1099’s at a price that is the most competitive in the marketplace. Going directly to the source, the provider is your best option for competitive pricing.

3.      Plan for the Future. Business Owners that fail to plan are preparing to fail. Know that everything will change; we just do not know whether it will be for the better or not. Know that every great deal, every profitable venture and every good business run will eventually run its course. Being prepared for this eventually will help ensure your business survives the tough times.

4.      Keep a mileage log. The IRS has increased their sensitivity towards business owners keeping a by day log to support their business miles. Frequently the best place to do this on your business day timer or calendar, where you could also record the business miles driven.

5.      Retirement Planning. Although this is a variable that requires you to thing long term, which is not in our basic nature. Planning for Retirement is an essential part of a business owner’s responsibility to both his family and his employees. Like Joseph in the Old Testament, we are to look to the future and to plan accordingly both in fat times and in lean.

6.      Live Below Your Means. There is perhaps no bigger suggestion that to live below your means. I believe I can say with certainty that in the course of Human History that all generations have experienced substantial changes in their lifestyles due to uncertainties in both economic and political times. Those who fail to consider this in both their spending and saving habits will be dramatically more likely to have their financial plans derailed.

7.      Have Contingency and Reserve Funds. Having excess monies available for both your business and personal needs is essential to both surviving lean times as well as to have the capacity for growth, for in times of rapid expansion, cash flow will be strained to the maximum.

8.      Have a Back-Up Plan. Just as we should back up our computer by having off site data storage, so should we have a backup plan for our finances. If you are a homeowner it is widely recommended that you set up an equity line on your home, which you can use in times of financial distress. Also having a backup plan will allow your business to survive and even thrive in otherwise economic down periods.

9.      Have Adequate and Well Thought Out Insurance. Financial hiccups will always occur and it is the good steward that will contemplate this well in advance. Being sure to consider the right types of medical insurance, property coverage, liability limits and an umbrella policy are essential to both individual taxpayers and homeowners but also business owners alike.

10.  Keep Your Balance. Just as our lives are to be balanced so should our finances. Too much planning for the future while not taking care of the           present             and vice versa are deal killers that will ensure and rob you and your         business of financial peace and security. Keeping a broad perspective and   understanding will do much to ensure your business future viability. 

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and to learn about his ministry visit http://www.john-dillard.com/ To contact John Dillard CPA (Atlanta Christian Author/Speaker) today call 770. 814.9304 Proudly serving Duluth, GA, Gwinnett County and Beyond. 

“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html

 We advise clients on: IRS representation, Offer in Compromise, Tax Problems, and Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.   

 Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Duluth CPA on Christian Financial Business and Money Management

Taking your faith to the streets means that you lay it all on the line and not just your Sunday church attendance. Being like Jesus requires Faith in Action, Belief in Motion and Being the Hands and Feet of Jesus Christ. I have found that when I put my whole heart, mind and body into action that indeed my life is easier rather than harder. Recently I had the opportunity to meet an Atlanta Christian Money/Financial Planner, who wrote of his concerns. I share this to challenge you to lay it all on the line for Christ! 

Thanks for all the information about your business. I enjoyed reading it. I believe you are a person of vision who would like to lead like Jesus in making significant changes in this world and for our future Kingdom. I have believed and worked for many years in ministry and in support of the education that advocates my belief in a strong financial educational background that impacts us today and for our future. However, many people I have known regrettably can be deceiving both in their desires and in their beliefs, especially some in the professional financial arena. And so I am cautious as I’m sure you have met some of them as well.

Bookkeeping for Your Atlanta Small Business
Learn the ABC’s of accounting for the business and financial operations of your business. Visit http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements for Atlanta Business Owners
Financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. See http://www.hiscpa.com/financial-statements.htm l
 
Monitoring & Preparing Your Financial For Your Atlanta Business
Month-end control procedures are critical, as any variance to these will negatively impact the reliability of your internal financial. These are just a few of the tips we give clients each and every day. http://www.hiscpa.com/monthend.html

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for American Entrepreneurs.

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/  and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/  or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it! 

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock, Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

 Duluth  CPA Firm Advises Business Owners How to Lower Their 2009 Tax Bill 

Below is a sample letter we might sent to a taxpayer as well as a checklist of items to evaluate when planning for your 2009 tax bill to both the IRS and Georgia/state. Being well aware of these items will do much to prevent unnecessary tax surprises: 

In Working on Your 2009 Tax Planning Please: 

-Please forward a copy of your year to date pay stub showing this year’s total gross wages and withholding.
-Please advise of any substantive changes you anticipate occurring when comparing your 2008 Personal Tax Return to 2009 Actual Results.

-When you forwarded the detail of your financial data recap for the year you separated out payroll from taxes. Were all of these monies to pay wages and payroll taxes for the business owner or were they for other items and personnel. Please forward a recap of the detail of these items. 

Especially as we close the tax year, we need to take a look at your financials to do some tax planning for the year. Below please find recapped below a list of the items we will need in order to properly evaluate and plan for your year-end taxes as well as address any year-end tax planning ideas.

As the end 2009 approaches, it’s time to think about what can be done to minimize the amount of taxes paid to the IRS by your business. Although tax planning should be a year-round process, there are several year-end strategies you can take, particularly if you are an S Corporation.

Below is a checklist as the end of the year approaches:

• Keep  your inventory as low as possible on December 31st. Since you are taxed based on the value of your goods in stock, it makes sense to minimize your inventory.
• If you are an accrual-based taxpayers may want to consider delaying end of December billing until early January. Since income is recognized when it is billed, you can delay the tax effects from 2009 until 2010.
• Locate and record all tax-deductible expenses and accounts payable before the end of 2009, rather than waiting until next year. This includes your personal expense report for December. Cash-based taxpayers must pay these expenses, while accrual-based taxpayers need only to receive and enter the bills.
• Setting up a qualified retirement plan. A defined-benefit plan can be a good way to reduce taxes while preparing for your retirement.
• Turn in an expense report and obtain reimbursement by years-end for any business expenses you might have incurred personally such as business mileage on your personal vehicle.

2009 Year End Planning Tips

Keep track of your business mileage, the rate for 2009 is 55 cents per mile. Please keep in mind IRS rules state that you must have kept a log of the miles you have driven to take this deduction.

Business owners should take additional steps to ensure the success of their businesses in 2010. If you expect a big change in your 2010 income, you should consult with an accountant now to minimize the tax impact. If you are a subchapter S corporation, you should plan to have the annual meeting of your Board of Directors as close to the new year as possible.

While this generic tax advice can be helpful to any small business, there are probably some specific steps your business can take to reduce taxes at the end of 2009. We have helped many small businesses in Atlanta and North Georgia minimize their tax liabilities and increase their profitability. We would be happy to sit down with you and discuss your situation. Please feel free to call or contact us.

 John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!  

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

The Power of your Financial Personality

We all know how important an engine is for a winning race car. A successful racing team understands what’s under the hood of their car and how to make it perform to the highest level.  In the same way, it is important we understand our own ‘financial’ engine and how it performs.  We call this engine our financial personality. Discovering our financial personality and understanding how it affects our decisions is critical to financial success.  

Many organizations will tell you that you need to behave in a certain way if you are going to be successful financially.  Attempting to change who you are is not only frustrating, but is not in line with God’s will for your life.  Learning to work within your personality is the key to financial success. 

Romans 12:4-8 tells us that we were each created with different gifts and talents that make us unique. You should not try to change who God made you, or attempt to change others.  Rather, you should use the talents God gave you to become the person He designed.   

In counseling singles and couples over the years, we have seen four universal traits that drive financial decisions and behaviors. The first two contrasting traits drive how we think about money.  Most people are either spontaneous or analytical.  Spontaneous people are more emotionally driven in their thought process.  Analytical people like to think and ponder before making a decision.   

The second two contrasting traits tell how we behave towards money.  Cooperative people like to make sure all sides are heard before making a decision.  Assertive people have no problem telling individuals what they want regardless of conflicting opinions.  By combining these traits, we have found people generally fall into one of four financial personalities.   

Read through the four personality types below and see which one you identify with the most.  Remember, there is no right or wrong personality and each one has its own strengths and weaknesses. 

Statesmen are a combination of cooperative and analytical traits. They are generally tactful with people and tend to be comfortable with their finances. They like to set goals but may be too passive when it comes to executing those goals. They easily adapt to other points of view.  Statesmen are conservative savers and investors.  They plan for tomorrow but not at the sacrifice of today.   

Cruise Directors are both spontaneous and cooperative. They generally have a charitable heart toward others and are givers. They also tend to be somewhat impulsive and get pleasure out of spending money. They generally have no desire to get wrapped up in financial planning and are not driven by specific financial goals. Cruise Directors think about today and don’t worry much about tomorrow.  

Litigators are assertive and analytical. They are calculated risk-takers and disciplined savers. They tend to set goals and plan for their financial future. Given their assertive style, they tend to take charge of their money.  Family members may see them as overbearing or rigid.  Litigators plan for tomorrow, sometimes at the sacrifice of today. 

Race Car Drivers combine assertiveness and spontaneity. This allows them to multi-task with the ability to make ends meet. They tend to have an entrepreneurial spirit but can be emotionally drained by the challenge of juggling their personal finances.  Race car drivers are generally risk takers.  While very financially active, race car drivers tend to struggle with consistent financial progress.  They tend to think about tomorrow but may not be able to get past the issues of today. 

When you understand your financial personality and that of your spouse, if married, communicating about finances is easier and more effective.  Better communication leads to a more solid financial plan that works long term and you will begin to make financial decisions that work for you! To learn more you can contact Mike Haswell at 770.995.7593 or visiting www.storingtreasures.com

Do you want my gross or my net?  

I have had the opportunity to sit down with many individuals and couples regarding their finances. Invariably, we will get the question, “Do you want me to put down my gross salary or my net take-home pay on the spending plan?” Our response is, “If you want to us to help you with all of your finances, we need to start with your gross salary.” 

You see, we tend to forget that many of our financial decisions have already been made when that check is deposited into our account. We also tend to forget that we can make a difference in our overall financial lives if we would review these taxes and deductions on a regular basis. So much is taken from our checks that we might be paying for areas that are just not needed or can be obtained elsewhere for less money. Here are some examples of items you will want to review the next time you review your pay stub.  

*** Taxes- One of the most famous quotes of our time is, “There is nothing certain in life but death and taxes.”  The problem with taxes is that we think of it as a once a year exercise. The fact of the matter is we have control over the amount of taxes deducted on a monthly basis.  We have become so used to paying this out of our paychecks that we think nothing of the $100s of dollars that flow into the government’s hands from our paychecks each month. Americans received an average tax refund of $2,427 in 2007 and many are struggling to make ends meet each month. In our years of counseling, we have seen many examples of tax refunds that are seen as a windfall when they could best be used for systematic savings or to pay down debt on a monthly basis. One of the first questions we ask counselees is how much of a tax refund they receive.  If they are struggling to make ends meet and are getting back $750 or more in a refund, our recommendation is to go to their Human resource office and increase the number of exemptions on their W-4. www.Quicken.com also has some calculators to help you in determining how many exemptions to set given your situation. Get those dollars back in your paycheck now and stop giving the government an interest free loan on YOUR money. 

 *** Tax-advantaged accounts and savings plan- Another important consideration is how those deductions that are designed to help you (flexible spending accounts, dependent care accounts, 401-Ks) also have excellent tax advantages. Each time you put money into one of the accounts listed above, you reduce the amount of your income that is taxed. Here is an example: John makes $60,000/ year and contributes 10% of his income to a 401-K ($6,000); $1,500 of his income to a flexible spending account; and $1,000 of his income to a dependent care account.  That is a $8,500 reduction and a taxable income that is now $51,500 instead of $60,000. For John who is in a 28% tax bracket, that amounts to $2,380 in tax savings. Talk to your human resource department about these deductions and the overall benefits for your family. 

*** Life/disability insurance- Typically, companies have very good plans for group life and disability coverage for employees.  The concern comes in when we try to assess total life and disability coverage for a family. Typically, most people really don’t understand their disability and life coverage and what they will cover and for whom. Take a minute now to pull out your paycheck, company handbook and all other life and disability policies you have. Make sure you have adequate coverage (and that you understand what those little initials on your check stand for) and that you are not either over-insured or have gaps in important coverage. 

By taking time to review your paycheck, you will better understand your financial situation and how you can have an immediate impact on your financial future.  

For more information on how to analyze your expenses and Christian financial principles, you can purchase our workbook, Storing Treasures on our newly renovated web site:  www.storingtreasures.com or you can call Mike Haswell at 770 995 7953

Atlanta CPA on Retirement Planning: What You Don’t Know Can Hurt You

When Getting ready for retirement business owners are frequently tempted to sign up for what sounds best. The below is a sample list of questions that might be used to help entrepreneurs determine what retirement plan will be best for their business and employees.

Below are a few questions that will allow me to make some suggestions.  

I will simplify the process and minimize the amount of time you have to spend on this, I just need a little information. 

I don’t want to throw all types of plans and options at you if we know they are not for you.  

So I can help you narrow down your options…. 

Do you have employees? 

Is it your wish make contributions only for you?   

Or do you wish to make contributions for employees too so that you may increase the amount you can contribute?  

Or Do you wish to keep your retirement plan simple and just max your contributions  among the very simple options for you only?   

These more simple options will not allow you tocontribute as much.

Can you give me an Idea of your  level of income?   

Do you have a limit on the amount you would wish to contribute or do you wish to contribute the most possible no matter what?   

I don’t want you to have some highly complicated plan with high fees if you don’t need it.  

If you wish, I can meet you at a convenient location near you for coffee or lunch to go over the best options for you.

 To learn more visit:

 http://www.hiscpa.com/investing-101.html Georgia CPA Teachings Investing Techniques
http://www.hiscpa.com/retirement-planning.html Gwinnett CPA Helps Business Owners Plan for Retirement
http://www.hiscpa.com/stock-options.html Your Georgia Stock Options
http://www.hiscpa.com/business-valuations.html Valuing Your Georgia Business
http://www.hiscpa.com/accounting-checklist.html Georgia Business Acquisitions Business Checklist
http://www.hiscpa.com/quality.html Helping Georgia Business Owners Succeed for 30 Years
http://www.hiscpa.com/parttime-cfo.html Hiring a Part-time/Virtual CFO for Your Atlanta Business
http://www.hiscpa.com/business-ethics.html Georgia CPA Teaches Business Ethics
http://www.hiscpa.com/achieving-excellence.html Atlanta CPA Encourages Business Excellence
http://www.hiscpa.com/intellectual-property.html Protecting Georgia Business Owners Intellectual Property Rights
http://www.hiscpa.com/risk-management.html Gwinnett/Duluth CPA Advises on Risk Management
http://www.hiscpa.com/non-compete.html Understanding Your Georgia Non-Compete Agreement
http://www.hiscpa.com/promissory-notes.html Gwinnett CPA Helps Georgia Business Owners with Drafting of Promissory Notes
http://www.hiscpa.com/business-checklist.html Business Checklist for Atlanta Business Owners
http://www.hiscpa.com/adding-partner.html Expanding Your Georgia Business by Adding a Partner
http://www.hiscpa.com/article4.html Georgia CPA Teaches Businesses Techniques for Survival
http://www.hiscpa.com/internal-controls.html Christian CPA Helps Business Owners Develop Good Internal Control
http://www.hiscpa.com/forensic-accounting.html Your Georgia Business and Forensic Accounting
http://www.hiscpa.com/budgeting.html Georgia CPA Helps Reduce Unnecessary Spending: Budgeting 101
http://www.hiscpa.com/article1.html Atlanta CPA Illustrates Difference Between Planning & Historical Accounting
http://www.hiscpa.com/article3.html Gwinnett/Duluth CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Georgia CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Tracking Marketing Statistics for Your Georgia Business  

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!  

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Helping Americans Do a Better Job of Saving for Retirement 

Over the past 20 years, the 401(k) plan has gradually replaced the traditional pension plan as a primary source of retirement income for many American workers. This trend has shifted the responsibility for accumulating a source of retirement income from the employer to the employee. 

Unfortunately, not all American workers with access to a 401(k) plan participate in it—and when they do, many are overwhelmed by the decisions they are forced to make. Between low participation rates and uninformed investment choices, many Americans are expected to reach retirement age with a nest egg that may fall woefully short of what they will need to maintain their preretirement standard of living.

Addressing the Shortfall

Enter the Pension Protection Act of 2006 (PPA). Some of the PPA’s most significant provisions were crafted in response to the perception that American workers were not preparing adequately for their retirement years—and that American employers needed better tools to help employees do so. The PPA clarified and standardized automatic enrollment to give plan sponsors protection from potential violations of state laws when choosing to automatically enroll employees in their 401(k) plan. The PPA also addressed the issue of how to invest the assets of automatically enrolled employees by creating a “safe harbor” for the selection of a qualified default investment alternative (QDIA) by employers. With this measure, employers generally bear no additional responsibility for investment selection if they choose a default option that meets the safe-harbor criteria, and if certain notices and other information are given to participants. Together, automatic enrollment and QDIAs are becoming powerful solutions for the challenge of employee inaction. 

Turning Inertia to Advantage

With automatic enrollment, employees are enrolled in the plan as soon as they become eligible. When an existing plan adds an automatic enrollment feature, the employer can choose to include only new hires as they become eligible, or it can also include previously eligible employees who have not yet joined the plan. Upon enrollment, the employee has 90 days to opt out of the plan and have any money that may have already been deferred returned. If the employee does not elect to opt out, a percentage of his or her salary—typically starting at a minimum of 3%—will be contributed to the plan from each paycheck. Effectively, automatic enrollment takes advantage of the same inertia that prevents many employees from participating in a plan. 

An Opportunity to Grow

Once an employee has been automatically enrolled, the next question is how to invest the employee’s contributions. While employers have had to resort to default investments in the past, in many cases those investments were aimed at preserving capital, not growing it. But with the PPA’s safe-harbor provision for QDIAs, plan sponsors can now select default investments that will give participants an opportunity to grow their assets at a rate necessary to fund their retirement without creating more liability for the plan sponsor. 

The PPA’s most significant provisions are beginning to weave their way through the fabric of our retirement landscape, as more plans automatically enroll more employees into diversified investments, which in turn provide greater opportunity for capital appreciation. While there has been much progress, there is still a long way to go. Given the tremendous shortfall in retirement savings and the loss of guaranteed retirement income from pension plans for millions of people, only time will tell if the PPA’s provisions are enough to help American workers adequately fund their retirement.  

Retirement Savings Need Work

According to the 2007 Retirement Confidence Survey from the Employee Benefit Research Institute and Mathew Greenwald & Associates, Inc., only 20% of respondents age 55 or older have saved more than $100,000 for retirement. Here are some other sobering findings from this study: 

• Nearly one-third of respondents over age 55 said they have less than $25,000 in retirement savings
• 43% of all respondents said they have not done a retirement-needs calculation
• Approximately four in 10 respondents were forced to retire before they intended to retire
• 75% of respondents underestimated their estimated lifespan 

Different Types of QDIAs

Qualified default investment alternatives (QDIAs) are investment strategies or services that can take a number of different forms. Here are three of the most popular: 

1)     A combination of investments that takes into account the individual’s age or retirement date (example: a life-cycle or targeted-retirement-date portfolio)

2)     A mix of investments that takes into account the characteristics of the group of employees as a whole, rather than each individual (example: a balanced portfolio)

3)     An allocation of contributions among existing plan options to provide an asset mix that takes into account the individual’s age or retirement date (example: a professionally managed account) 

To learn more contact Mr. Jeff Shoup, Vice President – Wealth Management and a Financial Planning Specialist at Morgan Stanley Smith Barney. You can contact Mr. Shoup at 404-842-2236 and visit their web site at http://fa.smithbarney.com/the_shoup_group