Archive for Investing

Protect Your Investment Assets

Bank accounts held in federally insured institutions are insured by the FDIC up to certain limits. But what about the bonds, stocks and money market funds that you have in a brokerage account?

SIPC & FDIC Are Not the Same Protection

These assets are not covered by the FDIC, but they probably are insured by the Securities Investment Protection Corporation (SIPC). But probably doesn’t mean always. So check to make sure your brokerage firm participates and check out this SIPC brochure for more information about limits and coverage. Unlike the FDIC coverage, SIPC is not backed by the government.

And to be clear, SIPC doesn’t protect you against investment losses so check your investment portfolio regularly & get the advice you need to manage your financial risks and meet your goals.


Make Your 2012 IRA Contribution by April 15th

Don’t miss out on the benefits of contributing annually to an IRA (Individual Retirement Account).

As a small business owner you are solely responsible for funding your retirement goals, so it is in your own best interests to consider making a Traditional or a ROTH IRA contribution if you can. And contributing to an IRA may even reduce your current personal tax bill, which is always good news to small business owners.

IRA Contribution Deadline

Time is running out to take advantage of this tax deferred savings option – you have to act by April 15th, 2013 to make an Individual Retirement Contribution for 2012.

For either Traditional IRAs or ROTH IRAs, contributions need to be made by your tax filing date. The IRA contribution date is not extended by filing a Tax Return Extension Request. So even if you are planning on requesting an extension of time to file your return, make sure your full IRA contribution is made by April 15th.

If you haven’t opened an account, there is still time to do so.  One reminder: if you make any contributions to your IRA between January 1st & April 15th, just make sure your bank or broker applies it to the right year.

IRA Rules

Nothing is simple with the IRS & the IRA rules are very complex, so get the information you need before contributing.

Some of the IRA basics are:

  • You need to be under age 70 ½.
  • You must have taxable compensation (wages, salary, commissions, etc.).
  • Taxable compensation for IRA purposes also includes Net Earnings from self-employment.
  • The maximum contribution for 2012 is $5,000 (or 100% of your compensation, whichever is less).
  • If you were 50 or older at the end of 2012, the maximum contribution is $6,000 (or 100% of your compensation, whichever is less).

Once the deadline passes, you can’t take advantage of it later.

Get All the IRA Facts First

Depending on the type of IRA you use and your annual income, your contribution may or may not be tax deductible. If you participated in a company retirement plan in 2012, you still may be able to make a contribution, but there are additional rules to consider.

Use tax filing software, check with your accountant or get 2012 Individual Retirement Account (IRA) contribution information on the IRS website. But don’t let this tax advantaged retirement savings option slip by if you are eligible to participate.


Increased 401K Contribution Limits for 2012

The IRS announced cost-of-living adjustments to annual contribution & elective deferral limits for pension plans, including 401Ks, 457bs and Defined Benefit Plans for next year. The new limits can be found on the IRS website.

This is a good time to think about how you, as a small business owner, are dealing with your retirement planning. We’re in the fourth quarter of the year, so check out your options for maximizing your contributions for this year and start planning for next year. If you don’t have a company pension plan in place, look into the benefits of putting money in an IRA or ROTH IRA for this year….you can’t go back and make it up if you let the opportunity slide for 2011.

Finding the best retirement plan for your business can be complicated, but it pays to understand the tax and savings benefits of doing so. There are a wide variety of plans available from SIMPLE 401Ks to Simplified Employee Pension Plans (SEPs) to Defined Benefit Plans to IRAs that offer a variety of flexible ways for a small business owner to sock away tax deferred savings.

After all, if you don’t take care of your retirement savings, who will?