Accounting News and Notes

With a general uneasiness over economic news, the housing sector, and the unprecedented turns during the election process, the DOW continues its slide. Peaking at 14,000 plus in October, 2007 the DOW is now lingering in the 12,600 range. I predict that the market will continue to ebb and flow and that the market will continue to soften over at least the first half of this year. As a persistent/consistent investor I believe this is a good time to get into the market and to buy when the market is low thereby maximizing your return when the market recovers. I remain committed to the stock market and believe that it is still a great place to invest for the long haul.

As the primaries continue I believe that some semblance of clarity will be achieved as to who our next Presidential candidates will be. In so doing, I think that this will help quell come of the recent past uncertainties. As always I suggest you work with a Certified Financial Planner to ensure that you invest wisely given your overall portfolio, business, and family needs.

A Savings Incentive Match Plan for Employees, a SIMPLE IRA plan is well suited for smaller employers. A company can select his plan if it has as little as one employee up to one hundred. A SIMPLE IRA is a relatively new entrant into tax law, and were established so small businesses could offer substantive benefits to their staff without the burdens of a SPD/Originating Plan Document to set up a plan, and the “top heavy” testing which a 401K requires. All monies taken out of an employee’s paycheck and forwarded to a retirement account of any type are immediately vested and owned by the employee. However, they are subject to the tax law and guidelines of any established plans and their contracted documents. SIMPLE IRA’s have to be set up by October 1st of this year in order for them to be effective for 2007. Employees can set aside out of their payroll $10,500 in 2007. This limit is indexed and is updated periodically for inflation. For those over fifty years of age there is a “catch-up” provision which allows for an additional $2500 to be withheld each year. The company then as a required matching which ranges from two to three percent so employees also receive the result of this benefit.