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2019 Retirement Plan Limitations

2019 Retirement Plan Limitation highlights:

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.

The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.

The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The catch-up contribution limit for SIMPLE IRA plans is $3,000 in 2015 – 2019.

The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

Source: https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000

Source: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-simple-ira-contribution-limits

Year End Center: QuickBooks Online Payroll Full Service

Year End Center: QuickBooks Online Payroll Full Service

https://community.intuit.com/browse/quickbooks-online-payroll-fullservice-yearend

SIMPLE IRA Plan

A SIMPLE IRA plan (Savings Incentive Match PLan for Employees) allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.

Choose a SIMPLE IRA Plan
Learn the basics of a SIMPLE IRA plan
Establish a SIMPLE IRA Plan
Set up a SIMPLE IRA plan
Participate in a SIMPLE IRA Plan
Benefits of participation, plan contributions, effects of withdrawing money from the plan
Operate and Maintain a SIMPLE IRA Plan
Periodically review the plan, update for recent law changes
Correct SIMPLE IRA Plan Errors
Find, fix and avoid plan errors
Terminate a SIMPLE IRA Plan
Requirements for ending a SIMPLE plan
Additional Resources
Forms. publications, frequently asked questions, etc. Also, see Video: Starting a SEP or SIMPLE IRA Plan.

Business Gifts Considerations

Giving is a sign of gratitude and appreciation. It’s a common saying that “giving is better than receiving”.

The giver has the benefit of feeling good about blessing someone else, and the recipient has both the benefit of feeling good that giver cares, and also that of the actual gift. Additionally, the recipient may be more helpful to the giver in the future as a result.

It’s a win-win, right? What could go wrong?

Turns out, there’s quite a few landmines and considerations that should be made, especially if you are empowering your team to distribute gifts on behalf of your company.

While we believe the information within is accurate, this is not intended to be specific legal, tax, or accounting advice, or an all-inclusive discussion of issues to consider. We think it’s simply a good starting place to have a further discussion with your attorney and/or your accountant about your specific circumstances.

The high level considerations that come to mind:

  • What is the company’s policy on gift giving?
  • Who are the gifts being given to?
  • What types are gifts are being made?
  • How are those transactions being recorded?
  • Who is monitoring the compliance to the company’s policy of gift giving?

COMPANY POLICY:
A properly written policy that describes the nature and type of acceptable gifts, payments, travel and entertainment, as well as who is authorized to give on behalf of the company, an approval process, and the procedures for recording/reporting is vital. Employees should acknowledge by their signature.

WHO ARE THE GIFTS BEING GIVEN TO?
The legality of giving gifts and any regulations surrounding it should be the primary consideration. The act of giving someone a gift, such as to a government employee (gov’t contractor or someone regulated by the gov’t), may require certain reporting or have limitations depending on gift type type, value, and other factors. It may be illegal to give, and possibly could be considered a bribe to secure favorable treatment, which is a crime.

While possibility not a matter of legality, some organizations’ policies (both public and private ones) may prohibit their employees from receiving certain types of gifts or gifts all-together. Receiving one may be cause for the recipient to loose their job or to be disciplined.

The rules for tax compliance by the giver vary depending on if the recipient of the gift is a customer, vendor, or an employee.

WHAT TYPES OF GIFTS ARE BEING MADE?
Different types of gifts have different tax-deductability and reporting requirements. We relied on 2017 IRS Publication 463 for this next information.

Some gifts are considered an entertainment expense and are subject to those limitations. For tax year 2018, entertainment expenses are not tax-deductible.

Any item that might be considered either a gift or entertainment generally will be considered entertainment. However, if you give a customer packaged food or beverages you intend the customer to use at a later date, treat it as a gift. A meal that is purchased for the customer when the payer is not present is not considered a tax-deductable meals expense, but may be considered a gift or entertainment depending on the circumstances.

Gifts that are not considered an entertainment expense, the tax-deductability is limited to $25 per recipient during the giver’s tax year as a Gift expense deduction. There are specific guidelines about who’s considered a recipient. There are also a few exceptions to note.

  1. The first exception is that incidental expenses such as engraving, packaging, insuring, and mailing are generally not included in determining the cost of a gift for purposes of the $25 limit.
  2. The second exception is an item that costs $4 or less and has your name clearly and permanently imprinted on the gift, and is one of a number of identical items that you widely distribute. Any signs, display racks, or other promotional material to be used on the business premieres is also not considered.

Gifts to employees have additional considerations. We relied upon 2018 IRS Publication 15-B for these considerations. There are lots of rules here. But the main theme is: Any fringe benefit you provide is taxable and must be included in the recipient’s pay unless the law specifically excludes it.

There are a number of exclusion rules that exclude all or part of the value of certain benefit from recipient’s pay. Cash, cash equivalents, gift cards, gift certificates, and the like are generally are not excluded and must be included in the recipient’s pay.

The exclusions from pay that are closely related to our topic of gifts:

  • Holiday or birthday gifts, other than cash, with a low fair market value. Also, flowers or fruit or similar items provided to employees under special circumstances (for example, on account of illness, a family crisis, or outstanding performance).
  • Certain meals provided to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable.
  • Occasional parties or picnics for employees and their guests

HOW ARE THE TRANSACTIONS BEING RECORDED?
It’s very important that a set of systems, processes, and procedures be thoughtfully created so that the giver records all of the relevant information about the gifts given and provides that to the person responsible for compliance, accounting, and oversight purposes.

WHO IS MONITORING COMPLIANCE?
As you can see, there are lot of considerations and potential liability across multiple fronts with regard to giving gifts. There should be an approval process prior to disbursement that includes  relevant information about the gift (ie: value, purpose, recipient, and intended date of disbursement). A periodic verification of gift disbursement records and any associated compliance should be performed to determine level of compliance to the organization’s policy as well as to various laws and regulations.

SOME PRACTICES BASED ON RECOMMENDATIONS BY DELOITTE
:
From accounting Today article dated 11/25/15 entitled: “Ground Rules for Corporate Gift Giving to Avoid Breaking the Law
  1. Set ground rules clearly in a written policy
  2. Act globally for consistency and compliance.
  3. Keep gifts corporate: company branded items.
  4. Make giving inclusive by giving gifts publicly and transparently.
  5. Prohibit cash gifts as well as gift cards. Consider baked goods for teams to share.

Wells Fargo & QuickBooks Bank Feeds status update

Wells Fargo Bank Feed Issues

I have news to share regarding the issues we’re seeing out of those bank connections. Wells Fargo has reported that users are currently unable to download CSV transaction files from their website if the person is aSecondary(orDelegate) user. Any files obtained are blank and contain no transactions. At this time, only thePrimary user on the bank’s website can download transnational data with success.

This might help explain the issues certain QuickBooks Desktop users are still facing. TheWebConnectprocess utilizes a set of bank credentials to obtain transactions directly from the bank’s website via CSV file. If the Primary contact isn’t used for this, no transactions can be downloaded.

For QuickBooks OnlineandSelf-Employedusers, this will result in anError 102when trying to update the bank connection. Our Engineering team is actively working with Wells Fargo to resolve the issue. They’ve provideda status pagewhere you can find more information about the error as well as a time frame for a solution. Updates will be posted directly at the link in addition to here in the thread as they become available.

What should I do in the meantime?

  • For QuickBooks Online and Desktop, creating transactions manually is the best workaround. This way, as soon as the error is resolved, all you’ll need to do is match them to the downloaded transaction.
  • QuickBooks Self-Employed users are best advised to wait until the issue is resolved.

Is this issue related to the Error 105/Reversed transactions I was receiving last week?

  • While these errors are unrelated from each other, it’s possible that some users were impacted by both.
  • For more information on the status of the previous error, please head tothe link here.

To those affected by the error, I know this time is important and we’re working tirelessly to get you back to business without any further delay. I greatly appreciate each of you that have taken time to share your concerns with the Community. Thanks everyone, stay tuned for further information.

https://quickbooks.intuit.com/community/Questions-about-QuickBooks/Wells-Fargo-Bank-Feed-Issues/m-p/177227#M21398

QuickBooks Online (QBO) Bill Pay timing

First Time Paying Bills

When first starting with the Bill Pay service, allow 4 banking days for both bank transfers and mailed checks. After 5 completed payments, payment timing will accelerate (for example, bank transfers under $5,000 will arrive in 2 banking days).

 

Paying a Bill

  • Enter details on the bill and schedule a payment (Schedule a payment by 6 pm PT, and we’ll start working on it the next banking day).
  • We show you an expected arrival date for each payment.
  • Allow 4 banking days for the payment to be received by the vendor (faster after your first 5 completed payments).
  • Check payments may take longer than 4 banking days to reach the vendor.
  • Banking days are Monday through Friday (excluding bank holidays).
  • The Pay Bills Online page will always show an “Arrives by” date for Bank Transfers, and “Est. arrival” date for paper checks.
    • NOTE: Check arrival dates for non-expedited payments are always shown as estimates, since we cannot guarantee USPS delivery times.

 

Things to Know

  • When scheduling a payment via Bill Pay, the earliest process date you can select is the next banking day (you cannot select the current date). Weekends and holidays don’t count in the banking world; if the day you select is a bank holiday or weekend day, we will automatically push the process date to the next available banking day.
    • Example: If you attempt to schedule a payment on Thanksgiving Day (Thursday), we will automatically make the process day Friday, which is not a bank holiday.
    • If a weekend or bank holiday falls within the regular processing time for a payment, the payment will be delayed, since banks do not operate on those days. That delay will be reflected in the “Arrives By” Date.
  • There is no “daily limit” on the amount you are able to pay to your vendor. (Please be aware that your financial institution may have a daily spending limit).
    • There is a per payment threshold that is activated for payments over $5,000, which will initiate a slower payment timing. This allows Bill.com to ensure the funds are available prior to sending the payment to the vendor. Please see example payment schedules below.

Examples:

Smaller Amounts

Bank Transfer (Smaller Amounts)
User-added imagePaper Check (Smaller Amounts)
User-added image

Larger Amounts

Bank Transfer (Larger Amounts)
User-added imagePaper Check (Larger Amounts)
User-added image

QuickBooks Online and Wells Fargo Bank feed problems

Wells Fargo transactions are reversed or I’m getting Error 105 when trying to refresh

What is wrong with the Wells Fargo connection? 
Currently transactions downloaded from Wells Fargo have the possibility to reverse money spent and received. This means these transactions should not be accepted into QuickBooks Online because it will result in them negatively impacting your books. This is impacting both QuickBooks Online and QuickBooks Self-Employed.

What is being done to resolve this issue? 
Intuit and Wells Fargo are working together to resolve the issue.

When will this issue with my Wells Fargo connection be resolved? 
Currently we do not have an exact timeline. We are working very closely with Wells Fargo to get this restored as quickly as possible. (this article was last updated on Wednesday September 5th)

Why am I now getting Error 105 when trying to refresh my Wells Fargo account? 
In an effort, to reduce the negative impact because of the reversed transactions, we have turned off aggregation for the impacted accounts. As soon as we are able to restore normal functionality, the accounts will no longer display Error 105 and transactions should appear normally.

What will I need to do once it’s resolved? 
Once the transactions are downloading normally again, there is a possibility we will need to exclude the transactions that were reversed. For these few days while this issue has persisted, the transactions will need to be manually created in QuickBooks Online.

Source: https://community.intuit.com/articles/1749102

Revised 2018 HSA contribution limit for individuals with family HDHP coverage

After the 2017 Publication 969 was released, the 2018 inflation-adjusted amounts for HSAs were published in Revenue Procedure 2018-18, and subsequently in Revenue Procedure 2018-27. If you viewed or downloaded the publication, please note the following for the first “Tip” on page 5. Revenue Procedure 2018-18 (dated March 5, 2018) lowered the HSA contribution limit for individuals with family HDHP coverage to $6,850. Revenue Procedure 2018-27 (dated April 26, 2018) raised that limit back to $6,900. The limit stated in the publication is correct. For 2018, if you have family HDHP coverage, you can contribute up to $6,900. The contribution limit for self-only HDHP coverage remains at $3,450.

Source: https://www.irs.gov/forms-pubs/2018-hsa-contribution-limit-for-individuals-with-family-hdhp-coverage

Why significantly increasing minimum wage will hurt employees and businesses

Short answer: Micky D’s can only charge so much for a burger and people still be able to afford to buy it.

More detailed answer: Since small business margins are very tight, an increase in costs cannot be absorbed without prices being increased.

A jump to $15/hr from the federal minimum wage of $7.25 is an 107% labor cost increase! Even in some states that already have a higher minumim wage of $10/hr, that’s still a 50% increase.

But even a 50% increase in labor expense results in a higher overall cost to the business because there are costs that employers pay that are based on a percentage of labor expense. Considering just the basic employer-paid payroll tax and workers’ compensation insurance cost (that are based on labor expense), a 50% increase in labor costs creates an overall cost increase to the business of at least 60%.

Prices must increase proportinately to cover the increase cost. Products and services performed at minimum wage have the most price sensativity in the market. Price increases on such often results in fewer purchases. To compensate, businesses sometimes have to cut back on staffing, import cheaper product, gain efficencies through automation to reduce human labor, or go out of business.

If a higher standard of living is the goal, a significant wage increase for unskilled labor will have the opposite effect, since they will be out of a job, and so will the other employees and business owner if the business has to close down.

The issue is that mimium wage jobs are not designed to support a family. These jobs are appropriate for entry level employment. Lots of people can perform the lowest skill jobs, therefore their economic value is lowest to an organization, and consquently their earnings potential at that level.

As one gains more experience and invests in learning higher level skills, their economic value to an organization increases. Since fewer can perform higher skilled duties, a somewhat shorter supply exists, creating a somewhat higher demand, and this translates into a higher wage.

The market continues to adjust upward for higher compensation to those that provide greater economic benefit to the organization.

Security upgrade needed for uninterrupted QuickBooks (desktop) services

Action required: Security upgrade needed for uninterrupted QuickBooks services
Effective June 1, 2018, all services within QuickBooks Desktop will need to meet updated system requirements. These industry standard security requirements will provide greater security and stability with TLS 1.2, an internet security protocol. To learn more about TLS 1.2, click here.

How does this impact you?
If these requirements are not met, services impacted include, but are not limited to the following:

  • Connected services such as Payroll, Payments, Online Banking, etc.
  • QuickBooks Desktop activation on a new computer
  • Password reset tool
  • Services that require Intuit account credentials such as My apps, secure webmail, contributed reports, etc.
  • Intuit Data Protect (IDP)
  • Ordering checks and supplies

What do you need to do?
Please take the following steps by May 31, 2018 to ensure uninterrupted QuickBooks services:

  1. Make sure the QuickBooks Desktop version you are using is updated to the latest release.
  2. Run the TLS 1.2 Readiness tool from this QuickBooks article on the computer where QuickBooks is installed to confirm your system readiness for TLS 1.2.
  3. If the TLS 1.2 Readiness tool indicates failure, you should review the details here to take the necessary steps.

For additional information, please see this QuickBooks article.

Thank you for being a valued QuickBooks Desktop customer.

Sincerely,

The QuickBooks Desktop Team