Assuming your income is such that you qualify for a Roth IRA and your company makes some kind of matching contribution to a portion of your 401K contributions, the order of contribution should be as follows: a. Contribute enough to your 401K so you take advantage of the company match – this is found money and should always be taken advantage of. b. Contribute the maximum amount you can to your Roth IRA. Different calculations have pretty much shown that if you have a 10-15 year time horizon a Roth is better than contributions to a deferred vehicle like a 401K because you forgo the tax deduction upfront to be able to take all account balances out tax free (if you have held it the longer of five years or when you turn 59 1/2). Since tax rates in the future will only go up, having tax free income is definitely an advantage. c. If you still want to contribute more to retirement, go ahead and max out your 401K contributions. This is the best way to maximize what you will receive from your retirement plans. Call or email if you have questions. For financial, accounting and tax musings, You can count on [...]
Musings of a Burbank CPA: Five Fall Projects to Refresh Your Financial Results
As we move into the fall season and the final quarter of the year, it’s a perfect time to commit to a project in your business that will help you reach the year’s end in better shape. Here are five ideas: 1. Back-to-School Time If payroll expenses are one of the higher costs in your business, then it makes sense to boost your team’s productivity and maybe also your own. Fall is back-to-school time anyway, so it’s a natural time of the year to take on a course, read a business book, or hire an organizer to help you get more from your workspace. If you spend a lot of time doing email, consider taking a course on Microsoft Outlook® or even Windows; learning a few new keystrokes could save you tons of time. If you need more time, look for a book or course on time management. Look for classes at your local community college or adult education center. 2. A Garage Sale for Your Business Do you have inventory in your business? If so, take a look at which items are slower-moving and clear them out in a big sale. We can help you figure out what’s moving [...]
Musings of a Burbank CPA: Here’s your unemployment check. Now pay it back
Well now that the Federal Government shutdown is over (for now?), state governments want unemployment benefits paid to federal workers paid back. Here are some of the details in CNN Money by Annalyn Kurtz: http://money.cnn.com/2013/10/18/news/economy/federal-workers-unemployment/index.html While the states are entitled to the money back (the Fed paid backpay up to the date the government shut down), they should be patient and not make a big problem worse. Hopefully they can arrange payment plans with the employees or maybe they can have a payment taken out of the federal employee’s paychecks! For financial, accounting and tax musings, You can count on us to count for you! email: bstonercpa@sbcglobal.net phone: 818-317-6035 Website: www.briantstonercpa.com https://twitter.com/bstonercpa