How to make the most of your 401(k)Posted on December 1st, 2017
If investing in your future is something that rests entirely on your shoulders, know that there are options. If you have employer-sponsored plans like 401(k)s, it’s imperative to that you properly optimize that plan to its fullest. But saving for retirement is a process, and its best to understand your avenues even if you’re just starting out. So here are some tips on how to start preparing for retirement.
– Consider maximizing your contribution which is matched by your employer in the 401(k) program at your company. In some cases you could get a 50 percent return on your investment. By having the money taken directly out of your paycheck, you have an easier time saving money without really thinking about it. If you match your contribution and had a direct deposit set up to add more, you will be on a good path towards affording retirement.
– Consider opening a Roth IRA or Roth 401(k) account with an investment firm. There are tax differences between the two, so it is important to discuss the pay taxes now vs. late discussion with an advisor or tax accountant.
– Look into a myRA – A singular investment option by use of U.S. Treasury retirement savings bond. This is a great option for those who do not have a 401(k) account at work, but have dispensable income. The myRA is convenient in that it accept smaller contributions, with low-balance fees and a higher interest rate than a savings account. Contribute your next tax refund, payroll deduction, or a deposit from a checking or savings account. You have options in size, just know with this plan that once you save $15,000, the money must be rolled into a private Roth IRA.
Start saving and keep saving! Whether you’re saving for retirement or for another goal – don’t give up. If you’re just starting to save, start small and try to increase the amount each month, know you’re options as you get into more opportunities to save more money for that end goal.
Manager Ashley Miller Reflects on Robin Abbott, CEO of New Hampshire Society of Certified Public Accountants (NHSCPA) VisitPosted on November 29th, 2017
It was a wonderful experience to have Robin Abbott, CEO of the NHSCPA visit and present at the Plodzik & Sanderson, P.A. office a few weeks back. Robin was engaging and excited to share all the new things the society is working towards. She discussed, how the society advocates for the profession on the state and national level, the career services offered through job postings and career fairs and the newly established mentor program for young CPAs. The vast amount of professional development and CPE the society offers as well as the networking and connections that are made possible through their work were also part of her presentation. The society also has a thriving young professionals network that hosts several entertaining networking events, including wine tastings and golf tournaments.
I have personally benefited from several of the society’s professional development opportunities including the 2016 NH Young Professionals Leadership Program and the 2017 Emerging Leaders’ Summit. Both events brought together great speakers and panelist to share their experience in leadership roles both professionally and personally. My perception on what makes a good leader has certainly been altered through my participation in these events. Not only were these events engaging and thought provoking but they were also fun! It is not every day that you get to do a tree top ropes course for professional development!
It was a fantastic opportunity to have her visit and I am looking forward to working with her on the 2018 Emerging Leaders’ Summit Steering Committee.
Ashley J. Miller, CPA
Helpful Tips for Any Small Business OwnerPosted on November 19th, 2017
People looking to start small businesses face a daunting task. With the dominance of larger companies, global competition provided by the internet, and the increasing number of competitors within other small businesses, you may feel overwhelmed. However, these simple yet effective tips should help keep you ahead of the curve and competitive in the modern market.
1) Make Yourself Known: A great way to get your name out is through community outreach efforts, or even sponsorships of local sports teams. These efforts go beyond regular marketing efforts in that they allow local communities to know you, as well as your business, and make purchasing your goods and services personal.
2) Have a Plan: Before even starting your business, have a strong business plan that acknowledges your company’s niche, market potential, and values your current assets. This can help you in deciding a direction for your venture, and can cut back on unnecessary expenditures in the future.
3) Quality over Price: With the constant presence of corporations like Walmart and Amazon, trying to price match competitors can lead to a loss of profit, as well as confidence. Instead of trying to compete fiscally, focus on honing your service in a way that these companies cannot. Not only will your product benefit from your drive for excellence, but patrons will overlook price differences for superior quality products and service.
4) Acknowledge Missteps: Nobody likes to be wrong, but being able to accept flaws in your business’ model or your product are essential in setting yourself apart from your competitor. Accept criticisms as opportunities to improve. Adaptability is essential in the modern marketplace.
5) Use Technology: With the internet and technologies focused on the management of small businesses, the barrier for marketing and sales in greater regions has more or less been lifted. Be sure to use all of the resources at your disposal, whether this means creating a web-based storefront, or managing your accounts with programs like QuickBooks.
While these strategies are just the tip of the iceberg in terms of establishing a successful business, they are helpful in getting your business a leg up over the competition.
5 Budgeting Tips to Save CashPosted on November 17th, 2017
Saving money is a difficult commitment to make, but it provides benefits in the long run. Life throws unpredictable events at us, and preparing our budgets to account for accidents or emergencies grants peace of mind. Saving is also one way to hold off on wanton spending that drains accounts rapidly. The following tips to save money can inspire balance in your daily financial habits.
Stick to a 30 Percent or Less Rule
It’s hard to save money without setting up a cap on your spending. When payday rolls around and there are new products or items grabbing our attention, it’s incredibly difficult. We recommend setting a limit of 30 percent of your paycheck to spend on entertainment and leisure. This reserves 70 percent use for essentials. Use 30 percent as a starting point and decrease the limit to save even more money as you become more confident in your saving strategy.
Establish Financial Goals
Nothing helps curtail personal spending and establish a direction more than creating a strategy. By writing down financial goals, such as paying off your car by a certain date, you lay a foundation for future success. Knowing where your money flows is liberating and strengthens resolve in saying no to frivolous purchases.
Manage Personal Cash Flow Daily
Dedicating one minute a day to looking over your bank account makes you aware of where you spend the most. This also promotes comfortability in managing one’s finances. Get cash out daily or weekly to keep to a specific spending amount, which is a research-proven technique that keeps your cash account stable. When swiping cards is the go-to, the convenience causes individuals to spend much more.
When new products appear on the market, whether a new gadget or guilty pleasure, it important to hold back the impulse to buy it. Impulsive shopping tends to influence purchasing habits and tricks us into buying items we don’t need.
Pay off Larger Debts First
When paying off credit card debt or loans, it’s beneficial to chip away at a loan with a higher interest rate. If you wait to pay, amounts owed increases exponentially. Although paying off smaller amounts of debt with smaller interest rates seems more manageable, they won’t cost as much as high interest debt. By hedging larger loans and limiting the traction their high interest gains, the debt is more manageable over time.
Choosing the Right Entity for Your BusinessPosted on April 25th, 2017
Many successful businesses begin with choosing the structure that best benefits the immediate and long term health of their operations. At Plodzik & Sanderson, P.A. Certified Public Accountants, we provide support in the process of selecting and filing to establish the entity that best fits your business. We have created this guide to help prospective business owners understand the various benefits and limitations that some of these structures provide. Consider the following:
Sole Proprietorships and Partnerships
Partnerships and sole proprietorships are the two most common structures for small businesses, and are the simplest to establish. Once the necessary paperwork has been filed, the owners and operators of these businesses are considered one-and-the-same with their company.
This means that any profits are distributed directly to the owners or partners in the business, and avoiding the taxation of the business itself. However, as owners of these businesses directly profit from their operations, they are also responsible for any debts that the company incurs, and maintain legal liability for the business.
Limited Liability Structures
Limiting personal liability in your business helps to ensure that any debts that arise do not affect your personal finances or credit. Structures such as limited liability partnerships (LLPs) and limited liability corporations (LLCs) come with additional regulations, and are often limited in the amount of growth they can experience. In addition, the limitations on liability are not indefinite, and certain liabilities still apply dependent of the type of structure selected and the state in which the business was established.
Regular corporations, also known as C corporations, have the greatest potential for growth. There is usually no upper limit on how large they can grow, and are able to take on the largest amount of shareholders. As such large entities, this structure is also taxed twice: once at the corporate level, and again at the shareholder level.
In order to avoid double taxation, there also S corporations. This structure is a pass-through tax entity, meaning that profits are not taxed until they are dispersed as shareholder income. However, in order to balance this loss of double taxation, S corps are limited on the amount of shares that can be distributed, which can sometimes limit the ability for growth.
Contact Plodzik & Sanderson, P.A. Certified Public Accountants Today
Each structure provides its own benefits, while also presenting limitations based on the service you hope to provide, and how you hope to grow your business. When deciding which entity to select, working with an experienced professional is essential.
If you are interested in starting your own business and are interested in the help of a professional, contact our Concord accounting firm today! We provide new business formation and small business accounting services to help you achieve a lasting financial success.
Common Tax Mistakes that Business Owners MakePosted on April 13th, 2017
With tax season coming to an end, there is a sense of urgency to ensure there are no mistakes made when filing. As the owner of a business, it’s important that you have a plan that prepares you for filing; however, people make mistakes. Luckily the trusted CPAs at Plodzik & Sanderson, P.A. provide tax services to assist business owners in navigating this busy season.
If you’re a business owner considering filing your own, here are some following mistakes you should avoid:
Neglecting Additional Taxes – It’s important to be mindful about state and local taxes, as well as payroll taxes. Having knowledge of the requirements your state expects of you can actually help save your business money. Payroll tax filing due dates can vary, and it’s important to stay up-to-date on tax law to avoid penalties.
Claiming Personal Expenses – To avoid confusion around tax time, be sure to keep your personal and business expenses separate. As a new business owner, it may seem simpler to have all expenses deducted from one bank account, however, you could be missing out on start-up deduction.
Choosing the Wrong Business Structure – Each business structure has specific legal and tax obligations. C-corporations are taxed at both the corporate level, as well as the shareholders level. LLC’s are not taxed as individual entities, but all of the income gained and lost goes through each member’s personal tax returns. Understanding each entity and what’s expected from the owners and members of that structure is essential if you’re thinking about filing taxes on your own.
Not Visiting a Professional – As a business owner, you may feel every task must be done by you alone. Business tax filing causes more stress than necessary, and takes you away from important activities that keep your business operational. The best way to ease this stress is to seek the assistance of Plodzik & Sanderson, P.A. to help set you up with an effective accounting system and tax strategy. With years of experience, they help reduce the chances of an audit or penalty by the IRS.
For more information about our tax services and business services, contact our Concord CPA firm today!
Audits for Non-Profit and Profit EntitiesPosted on March 30th, 2017
For any publicly held entity or governmental organization, it’s essential to go through an annual audit of quarterly financial statements. While this process is necessary to determine the use of government funds in a non-profit organization, it is completed for private entities as well. At Plodzik & Sanderson, P.A., we work a variety of private and publicly-held enterprises, including school districts, towns, cities, and charter schools to provide audits when necessary. For more information about our audit services, contact our Concord CPA firm.
What are Audits?
There are a variety of audits for both public and private entities, such as financial statement audits, internal audits, and statutory audits. The main purpose of an audit is to objectively examine and evaluate an organization’s financial statements to assure all transactions are accurate.
When is an Audit Necessary?
Audits can be performed by members of the company or externally by an outside firm. Hiring an outside company for an audit eliminates bias and provides the highest level of assurance. Depending on the type of entity of your enterprise, there are specific audits that may be necessary for some versus others.
Non-Profit and Governmental Agencies
If you run a company that functions as a non-profit, acquiring the federal funds is essential in the success of your business. The federal government requires financial statement audits or single audits to provide a level of assurance that the funds are being used accurately. Depending on your state, and the amount of funds you receive in a single year, an independent audit may be required. Audits are a great way to determine the efficiency of the company and can be suggested by board or committee members.
Statutory audits are required to determine whether an organization is providing an accurate representation of its financial position by examining bank balances, bookkeeping records, and financial transactions. This is important for non-profits to demonstrate that money allocated to spend during the fiscal year is done so based on requirements for grants, funds, and awards.
For small businesses and privately held entities, internal audits are often completed with the intent to find opportunity for improvement. Less stringent than the processes for non-profits, an audit of your private company is helpful in investigating opportunities for growth, gathering credibility regarding business performance, or to prevent fraud, waste, or abuse within the company.
Whether you outsource your auditing process, or take it in house, it’s important comply with internal policies of the company, as well as state and federal laws. Internal audits can be done on a daily, weekly, monthly, or annual process and is a great way to assess current processes and procedures of your company.
At Plodzik & Sanderson, P.A. we provide an array of audits for governmental agencies and have done so for years. For more information about our audit services, and information on our non-profit and small business services, contact us today for a consultation.