Monthly Archives: June 2016

How many employees does your business have for ACA purposes?

It seems like a simple question: How many full-time workers does your business employ? But, when it comes to the Affordable Care Act (ACA), the answer can be complicated.

The number of workers you employ determines whether your organization is an applicable large employer (ALE). Just because your business isn’t an ALE one year doesn’t mean it won’t be the next year.

50 is the magic number

Your business is an ALE if you had an average of 50 or more full time employees — including full-time equivalent employees — during the prior calendar year. Therefore, you’ll count the number of full time employees you have during 2016 to determine if you’re an ALE for 2017.
Under the law, an ALE:

Is subject to the employer shared responsibility provisions with their potential penalties, and
Must comply with certain information reporting requirements.

Calculating full-timers

A full-timer is generally an employee who works on average at least 30 hours per week, or at least 130 hours in a calendar month.

A full-time equivalent involves more than one employee, each of whom individually isn’t a full-timer, but who, in combination, are equivalent to a full-time employee.

Seasonal workers

If you’re hiring employees for summer positions, you may wonder how to count them. There’s an exception for workers who perform labor or services on a seasonal basis. An employer isn’t considered an ALE if its workforce exceeds 50 or more full-time employees in a calendar year because it employed seasonal workers for 120 days or less.

However, while the IRS states that retail workers employed exclusively for the holiday season are considered seasonal workers, the situation isn’t so clear cut when it comes to summer help. It depends on a number of factors.

We can help

Contact us for help calculating your full-time employees, including how to handle summer hires. We can help ensure your business complies with the ACA.

Retiree Confidence In Ability To Afford Comfortable Retirement Increases

The 26th wave of the Retirement Confidence Survey (RCS), the longest-running survey of its kind in the nation, finds that American workers’ confidence in their ability to afford a comfortable retirement has maintained its increase after the record lows experienced between 2009 and 2013. However, retiree confidence in their ability to afford a comfortable retirement continued to increase in 2016. 1 While workers and/or their spouses who have a retirement plan have much larger savings and are also more likely to have taken steps to prepare for retirement, in the aggregate, only a minority of all workers appear to be taking basic steps needed to prepare for retirement. http://bit.ly/28IBkcW

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NOLs

A net operating loss (NOL) occurs when a business’s operating expenses and other deductions for the year exceed its revenues. On the bright side, you can claim an NOL deduction if your business’s expenses exceed its income (though certain modifications apply). Generally, once you incur a qualifying NOL, you can either carry it back as far as allowable (typically two years) and then carry forward any remaining amount, or you can elect to carry forward the entire loss. Choosing the best approach can be tricky, so please give us a call for help.

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Properly fund your living trust to shield assets from probate

Many people set up a revocable, or “living,” trust to shield assets from probate and take advantage of other benefits. For the trust to work, you must transfer assets to it that would otherwise go through probate — a process known as “funding” the trust. Most people fund their trusts around the time they sign the trust documents.

Once your estate plan is complete, however, it’s easy to overlook the need to transfer later-acquired assets to your trust. If you don’t transfer them, those assets may be subject to probate and will be outside the trust’s control.

How to transfer assets

Procedures for transferring assets to a trust vary depending on the asset type:

To transfer real estate, you must execute and record a deed conveying title to the trust.
Transferring bank and brokerage accounts typically involves providing forms or letters of instruction to the institution holding the accounts.
Interests in closely held businesses usually require a simple assignment.
Tangible personal property may require an assignment or bill of sale.

Assets that shouldn’t be transferred

Be aware that certain assets shouldn’t be transferred to a living trust, such as IRAs and qualified retirement plan accounts. These are “nonprobate” assets, so avoiding probate isn’t an issue, and transferring them to a trust is considered a taxable withdrawal.
Instead, you can name an individual as beneficiary. Or, if you don’t want an individual to have complete control over the account, you can name a trust as beneficiary.

Reap the full benefits

Avoiding probate is an important estate planning objective for many taxpayers because probate can be costly and time consuming, and its public nature raises privacy concerns. A living trust can also be used to manage your assets if you become incapacitated.

To ensure that your living trust is properly funded so you can reap the full benefits, contact us any time you acquire a major asset.

© 2016