These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
The SECURE Act of 2019 is a broad bill with the purpose of increasing access to tax-advantaged retirement accounts in order to prevent retirees from outliving their assets. It mostly impacts those already in retirement or close to it.
1. RMD Relief: Previously, IRA and employer-sponsored retirement plan holders were required to start taking Required Minimum Distributions (RMDs) from age 70½ to age 72. This will give retirees more time to let their savings grow tax-free.
2. More Planning Opportunities for Roth IRAs: The change in the RMD age described above means account holders will have an extra two years to do a Roth IRA conversion. This can be important because unlike traditional IRAs, Roth IRAs are not subject to RMDs during the taxpayer’s lifetime.
3. More Chances to Save: Previously tax-deductible IRA contributions were forbidden after age 70½. The SECURE Act gets rid of this restriction, so if you are still earning money in your 70s and onward, you’ll have the opportunity to save into a deductible IRA.
4. Easier for Small Businesses to Establish Retirement Plans: The SECURE Act allows a greater number of small businesses to join up to give employees Multiple Employer Plans (or MEPs) starting in 2021. This eases the administrative burden and costs of offering retirement plans. The hope is that more small employers will begin to offer plans.
5. Guaranteed Income for Life: Employers will now be able to allow employees to change their retirement plan savings into annuities without the fear of a lawsuit being filed against them – in the case the insurer they pick fails to pay the annuity payments.
6. Removes “Stretch” Provisions: Prior to the SECURE Act, traditional IRA beneficiaries typically had to take RMDs over their own life expectancy, extending the tax benefits of the retirement account. Starting on Jan. 1, 2020, the SECURE Act changes this rule. Now, most beneficiaries only have 10 years to liquidate their entire inherited retirement account (with some exemptions, such as surviving spouses and minor children).
The SECURE Act of 2019
January 1, 2020 · Blog, Guest Post of the Month
⏱ 2 min read
The SECURE Act of 2019 is a broad bill with the purpose of increasing access to tax-advantaged retirement accounts in order to prevent retirees from outliving their assets. It mostly impacts those already in retirement or close to it.
1. RMD Relief: Previously, IRA and employer-sponsored retirement plan holders were required to start taking Required Minimum Distributions (RMDs) from age 70½ to age 72. This will give retirees more time to let their savings grow tax-free.
2. More Planning Opportunities for Roth IRAs: The change in the RMD age described above means account holders will have an extra two years to do a Roth IRA conversion. This can be important because unlike traditional IRAs, Roth IRAs are not subject to RMDs during the taxpayer’s lifetime.
3. More Chances to Save: Previously tax-deductible IRA contributions were forbidden after age 70½. The SECURE Act gets rid of this restriction, so if you are still earning money in your 70s and onward, you’ll have the opportunity to save into a deductible IRA.
4. Easier for Small Businesses to Establish Retirement Plans: The SECURE Act allows a greater number of small businesses to join up to give employees Multiple Employer Plans (or MEPs) starting in 2021. This eases the administrative burden and costs of offering retirement plans. The hope is that more small employers will begin to offer plans.
5. Guaranteed Income for Life: Employers will now be able to allow employees to change their retirement plan savings into annuities without the fear of a lawsuit being filed against them – in the case the insurer they pick fails to pay the annuity payments.
6. Removes “Stretch” Provisions: Prior to the SECURE Act, traditional IRA beneficiaries typically had to take RMDs over their own life expectancy, extending the tax benefits of the retirement account. Starting on Jan. 1, 2020, the SECURE Act changes this rule. Now, most beneficiaries only have 10 years to liquidate their entire inherited retirement account (with some exemptions, such as surviving spouses and minor children).
Disclaimer
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
This is important for your financial future in many ways, particularly if you want to buy a house or a car (and that’s just for starters). If you need to make some repairs to your score, the new year is the best time to do this. Better still, you’re entitled to three free reports each year. Check it out. See how you’re doing. You’ve got nothing to lose and everything to gain.
Get Out of Debt
This might be easier said than done, but it’s absolutely possible. One very helpful tool is Unbury.Me. It’s free and easy to use. Just create an account and map out a payment plan that works for you. If you want to wipe away your debt quickly, there’s the avalanche method, which attacks the highest interest rate debts first, then moves to the second highest and so on. But this isn’t the only solution. There’s another tool that actually uses your purchases to help you pay down debt: Qoins. Here’s how it works. You round your purchases to the nearest dollar, then apply the cash to your debt, i.e. student loans or credit cards. So, in essence, you can go on living your life while shrinking your debt.
Evaluate Your Insurance and Disability Insurance Needs
As you age, your insurance needs change. Think about how much protection you really need. For example, would you be better served by term or permanent life insurance? What about disability insurance? For the latter, make sure you have enough coverage. Life happens. It’s always best to be prepared.
Refresh Your Retirement Savings
If you work for a company that offers 401(k), 403(k) or 457 plans, consider asking your employer to withhold enough through salary deferrals to make sure you reach the maximum limit each year. If you’re over 50, you can raise the amount to make catch-up contributions. If you’re self-employed, you can contribute to a SEP IRA, profit-sharing plan or independent 401(k) plan. Making retirement deductions from your paychecks, especially when they’re maxed out, might take a bit of getting used to. But once you’ve retired, you’ll be very glad you had the foresight to act now.
Truth is that the above resolutions are just the tip of the moneyberg. You can go deeper into each area. If you want further assistance, consult a financial planner or your accountant. But the biggest takeaway from all these suggestions is simple: begin now, or as soon as you can. When you’re making the most of your money today, you’re working toward a more secure tomorrow.
4 Financial New Years Resolutions You Can Actually Keep
January 1, 2020 · Blog, Tip of the Month
⏱ 4 min read
Believe it or not, it’s 2020. You’re not just starting a new year, you’re entering a new decade. With this in mind, you might want to make some resolutions that focus on your finances. According to Psychology Today, 80 percent of resolutions fail by February. If you’re thinking about dieting or eating better, this isn’t very encouraging. However, when it comes to your money, there are some changes you can implement now that will have staying power and won’t be forgotten by spring.
Review Your Credit Report
This is important for your financial future in many ways, particularly if you want to buy a house or a car (and that’s just for starters). If you need to make some repairs to your score, the new year is the best time to do this. Better still, you’re entitled to three free reports each year. Check it out. See how you’re doing. You’ve got nothing to lose and everything to gain.
Get Out of Debt
This might be easier said than done, but it’s absolutely possible. One very helpful tool is Unbury.Me. It’s free and easy to use. Just create an account and map out a payment plan that works for you. If you want to wipe away your debt quickly, there’s the avalanche method, which attacks the highest interest rate debts first, then moves to the second highest and so on. But this isn’t the only solution. There’s another tool that actually uses your purchases to help you pay down debt: Qoins. Here’s how it works. You round your purchases to the nearest dollar, then apply the cash to your debt, i.e. student loans or credit cards. So, in essence, you can go on living your life while shrinking your debt.
Evaluate Your Insurance and Disability Insurance Needs
As you age, your insurance needs change. Think about how much protection you really need. For example, would you be better served by term or permanent life insurance? What about disability insurance? For the latter, make sure you have enough coverage. Life happens. It’s always best to be prepared.
Refresh Your Retirement Savings
If you work for a company that offers 401(k), 403(k) or 457 plans, consider asking your employer to withhold enough through salary deferrals to make sure you reach the maximum limit each year. If you’re over 50, you can raise the amount to make catch-up contributions. If you’re self-employed, you can contribute to a SEP IRA, profit-sharing plan or independent 401(k) plan. Making retirement deductions from your paychecks, especially when they’re maxed out, might take a bit of getting used to. But once you’ve retired, you’ll be very glad you had the foresight to act now.
Truth is that the above resolutions are just the tip of the moneyberg. You can go deeper into each area. If you want further assistance, consult a financial planner or your accountant. But the biggest takeaway from all these suggestions is simple: begin now, or as soon as you can. When you’re making the most of your money today, you’re working toward a more secure tomorrow.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
When it comes to evaluating a business, especially one that is publicly traded, determining its return on equity (ROE) is one way to see how it’s performing.
What is Return on Equity?
Return on equity is a ratio that gives investors insight into how effectively the company’s management team is taking care of the shareholders’ financial investments in the company. The greater the ROE percentage, the better the business’ management staff is at making income and creating growth from shareholders’ investments.
How ROE is Determined
In order to calculate ROE, a company’s net income is divided by shareholder equity. To arrive at net income, businesses account for the cost of doing business, which includes the cost of goods sold, sales, operating and general expenses, interest, tax payments, etc. and then subtracts these costs of doing business from all sales. Similarly, the free cash flow figure can be substituted in place of net income.
There are some caveats when it comes to calculating net income. It is determined prior to paying out dividends to common shareholders, but loan interest and preferred shareholder dividend obligations must be met before starting this calculation.
The other part of the equation is the shareholder equity or stockholders’ equity. One definition is to subtract existing liabilities from a business’ assets, and what remains is what owners of a corporation or its shareholders would be able to claim as their equity in the company. Whether it’s done year over year or quarter over quarter, traders and investors can see how well a company performs over different time periods.
Return on equity is also able to be determined if a business’ net income and equity are in the black. The net income is found on the income statement – the ledger of the company’s financial transactions. Shareholders’ equity is found on the balance sheet – which details the business’ assets and financial obligations.
Analyzing a Business’ ROE
Another consideration that industry experts recommend to determine if a company’s ROE is poor or excellent is to see how it compares to the S&P 500 Index’s performance. With the historical rate of return being 10 percent annually over the past decade, and if a ROE is lower than 10 percent, it can give a good indication as to a particular business’ performance. However, a particular company’s ROE also needs to be compared against the industry’s ROE to see if the company is outperforming its sector.
For example, according to Yahoo Finance!, the ROE on Microsoft’s stock is 42.80 percent. This means that the management team running Microsoft is returning just shy of 43 cents for every dollar in shareholders’ equity. Compared to its industry (Software System & Application) ROE of 13.47percent – as cited by New York University’s Stern School of Business – Microsoft has a much higher ROE compared to the industry average. This is just one metric to measure the company’s performance, but it is an important one.
While looking at a company’s return on equity is not the end all or be all, it’s a good start to determine a company’s present and future financial health.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact a professional regarding the topics in these articles. The images linked to these articles are protected by copyright and should not be copied for any reason.
Reauthorizing Security for Supreme Court Justices Act of 2019 (HR 4258) – This bill reauthorizes the Marshal of the Supreme Court and the Supreme Court Police to protect the Justices of the Supreme Court, their employees and official guests outside of the Supreme Court grounds. The legislation was sponsored by Rep. Greg Stanton (D-AZ). It was introduced on Sept. 9, 2019, and signed into law by the president on Nov. 27, 2019.
