Accounting & Finance

Business Owner's Guide to Profit Planning

Owner's Guide to Profit Planning

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PPT elimination clears first legislative hurdle

After many hours of testimony, the Senate Finance Committee this week approved legislation that would phase out the industrial Personal Property Tax (PPT) and drastically cuts levies on commercial property as well. The vote on each of the eight bills was, 5-2, which was split along party lines. 

Opponents of the legislation, primarily local units of government, have pushed for a constitutional amendment guaranteeing a replacement for the $450 million in lost revenue, something Senate Republican aren't interested in. Senate Majority Leader Randy Richardville has stated several times in the past weeks that it is his intention to pass the package before summer break. A vote could take place as early as next week, some sources have indicated.

SBAM President and CEO Rob Fowler addressed the Senate Finance Committee this week, testifying that elimination of the Personal Property Tax is the next key step on the path of Michigan’s economic recovery. Fowler stated that the corporate income tax passing last year was critical to "repositioning" Michigan. He argued that it didn't help big business or oil companies, but primarily helped small businesses. "I'd like to offer you some encouragement that you're on the right track," he said. "A growing economy solves a lot of problems that we've been facing over the last decade" adding that he was "very, very optimistic about our state economic trends today."

Fowler also referred to the Entrepreneurship Scorecard and Michigan Jobs Insight project in his testimony to showcase the positive direction Michigan’s economy is heading partially as a result of the reform efforts made in the legislature thus far.

The four questions you need to answer if you’re going to be a successful entrepreneur: today at 10 a.m. on the free Business Next audio seminar

On Friday's program: retired CPA and longtime small business advocate Paul Hense talks about the four questions you need to answer if you’re going to be a successful entrepreneur; Chris Carrigan, representing the Potterville Gizzard Fest, talks about the positive small business impact of local festivals and fairs; Jennifer Acevedo of the Michigan Department of Environmental Quality’s Office of Environmental Assistance talks about a fall conference that can help small business owners “green up” Michigan’s environment and economy.

Listen today at 10 a.m., 3 p.m. and 8 p.m. on the 
Michigan Business NetworkSBAM members can log in and listen to archived programs anytime on a PC or mobile device by going to the Business Next show page

Get Business Next audio seminars delivered three times a week automatically to your iPhone or other mobile device. Subscribe in iTunes using this URL.      

(Photo by http://www.flickr.com/photos/74571262@N08/)

Sustainable microbrewing, avoiding office distractions, and a May 15 conference in Lansing that can help you make money with exporting

Interview with Kris Spaulding, Sustainability Director for Brewery Vivant. Her Grand Rapids brewery became the first LEED certified microbrewery in the U.S. And, business consultant Mike Pircer offers his top tips for having a productive and distraction-free day in your office. Finally, Brent Case, vice president of International Business Services for the Lansing Regional Chamber of Commerce, talks about the May 15 Port Lansing Global Logistics Conference.

Listen today at 10 a.m., 3 p.m. and 8 p.m. on the 
Michigan Business NetworkSBAM members can log in and listen to archived programs anytime on a PC or mobile device by going to the Business Next show page

Get Business Next audio seminars delivered three times a week automatically to your iPhone or other mobile device. Subscribe in iTunes using this URL.     

(photo by http://www.flickr.com/photos/kpsiu/)

Has Your Company 401(k) Plan Made These 11 Mistakes?

Article courtesy of SBAM Approved Partner AdvanceHR

The IRS released a list of 11 potential 401(k) plan errors. Has your company's plan made any of them? Ignoring these mistakes can lead to costly penalties and even disqualification of a plan's tax-favored status. The good news is you may be able to correct errors before the IRS comes calling.

It is critical to keep your company's 401(k) plan in compliance with numerous federal laws and regulations. Plans that are found to be in violation risk expensive penalties and disqualification.

The IRS recently issued this list of 11 potential errors:
  1. Has your 401(k) plan document been updated within the past few years to reflect recent law changes?
  2. Are the plan's operations based on the terms of the plan document?
  3. Is the plan's definition of compensation for all deferrals and allocations used correctly?
  4. Were employer matching contributions made to all appropriate employees under the terms of the plan?
  5. Has your plan satisfied the nondiscrimination tests? Traditional 401(k) plans must be regularly tested to ensure that the contributions made by, and on behalf of, rank-and-file employees are proportional to contributions made for owners and managers.
  6. Were all eligible employees identified and given the opportunity to make an elective deferral election?
  7. Are elective deferrals limited to the amounts allowed under the tax code for the calendar year and have any excess deferrals been distributed?
  8. Have you deposited employee elective deferrals on time? Plan documents generally contain language about the timing of these deposits. There are also federal laws and regulations regarding deposits of elective deferrals, as well as matching employer contributions. Failing to follow the terms of the plan could lead to "prohibited transactions."     
  9. If the 401(k) was top-heavy (favoring highly compensated executives), were the required minimum contributions made to the plan?
  10. Were hardship distributions made properly? These distributions may be allowed by a 401(k) plan in the event an employee has an immediate financial need, such as medical bills or college tuition.
  11. Have you filed a Form 5500 series return with the IRS and have you distributed a Summary Annual Report to all plan participants this year?
Abusive or prohibited transactions can put the tax-favored status of your company's 401(k) plan in jeopardy and result in expensive penalties.

Keep in Mind: The IRS is not the only government agency overseeing employee benefit plan compliance. The Labor Department's Employee Benefits Security Administration and the Pension Benefit Guaranty Corporation also scrutinize benefit plans and have their own compliance processes.

The good news is that 401(k) plan errors can often be voluntarily corrected. Your tax adviser or employee benefits professional can determine if changes should be made to your company's plan to achieve and maintain compliance.

Staying current with numerous complex requirements is challenging for business owners and executives. With professional help, you can identify and correct any problems associated with qualified plans ... before the IRS comes calling.

Get great tips for small business success! Listen to our free Business Next audio seminar

HR expert Julie Mann discusses how to help job seekers fit in to small business job opportunities; Rob Trube, author of the business planning book “The Simple Focus Plan”; Athena Trentin, program director of the Global Talent Retention Initiative, discusses the role of talented immigrants in growing Michigan’s small business economy; Shelley Lowe, director of career services of Davenport University, talks about training resources for complying with state and federal regulations; James Muffett on the Student Statesmanship Institute Business Track program.

Listen today at 10 a.m., 3 p.m. and 8 p.m. on the 
Michigan Business NetworkSBAM members can log in and listen to archived programs anytime on a PC or mobile device by going to the Business Next show page

Get Business Next audio seminars delivered three times a week automatically to your iPhone or other mobile device. Subscribe in iTunes using this URL.      
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