Auditing and Accounting ootnotes - Hogan - Hansen...Auditing and Accounting Business Management...

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Footnotes FINANCIAL IDEAS FOR TODAY AND TOMORROW Fall 2019 HOGAN - HANSEN, P.C., CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS Auditing and Accounting Business Management Consulting Business Strategies for Taxes and Succession Planning Business Valuations Cafeteria Plan Design and Administration Employee Benefit Plan Services Financial Planning Payroll Management QuickBooks Support Tax Preparation A plan without action is just a dream. All of us endeavor to make plans - plan to get in better shape; plan to save more money; plan to hire more employees and grow our business. But many times we plan and fail to implement the actions necessary to reach the goals of our plan or give up because we lack focus on our plan. One way to focus your attention is to define your mission and your values and make them front and center for the world to see. In the past year, we have defined our mission as “Living our Core Values to be your Trusted Advisor and to Make a Difference in the Lives of our Team and in our Communities”. The core values that surround our mission are Compassion, Integrity, Stewardship, Unity and Fun. When you visit one of our offices, be on the lookout for our mission and core values displayed for the world to see! Over the next year we will be sharing with you how we live our mission and core values and how our staff embrace those values as we collectively work toward our plan to be your Trusted Advisor and Make a Difference! As we approach the holiday season we want to wish you all the best for a joyous season as we all remember and give thanks for the blessings in our lives. The best gift we might be able to give this year is kindness - try it. Do something kind for someone today for no reason other than to make a Difference in their Life! Compassion, Integrity, Stewardship, Unity and Fun Steve Duggan, CPA is the firm's managing partner and is in our Waterloo office. FROM THE PEN OF A PARTNER

Transcript of Auditing and Accounting ootnotes - Hogan - Hansen...Auditing and Accounting Business Management...

Page 1: Auditing and Accounting ootnotes - Hogan - Hansen...Auditing and Accounting Business Management Consulting Business Strategies for ... tax or legal services. and a New Year filled

FootnotesF I N A N C I A L I D E A S F O R T O D A Y A N D T O M O R R O W

F a l l 2 0 1 9 HOGAN ­ HANSEN, P.C., CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS

Auditing and Accounting Business Management Consulting Business Strategies for Taxes and Succession Planning Business Valuations Cafeteria Plan Design and Administration Employee Benefit Plan Services Financial Planning Payroll Management QuickBooks Support Tax Preparation

Aplan without action is just a dream. All of us endeavor to make plans ­ plan to get in better shape; plan to save more money; plan to hire

more employees and grow our business. But many times we plan and fail to implement the actions necessary to reach the goals of our plan or give up because we lack focus on our plan.

One way to focus your attention is to define your mission and your values and make them front and center for the world to see. In the past year, we have defined our mission as “Living our Core Values to be your Trusted Advisor and to Make a Difference in the Lives of our Team and in our Communities”. The core values that surround our mission are Compassion, Integrity, Stewardship, Unity and Fun. When you visit one of our offices, be on the lookout for our mission and core values displayed for the world to see!

Over the next year we will be sharing with you how we live our mission and core values and how our staff embrace those values as we collectively work toward our plan to be your Trusted Advisor and Make a Difference!

As we approach the holiday season we want to wish you all the best for a joyous season as we all remember and give thanks for the blessings in our lives. The best gift we might be able to give this year is kindness ­ try it. Do something kind for someone today for no reason other than to make a Difference in their Life!

Compassion, Integrity, Stewardship, Unity and Fun

Steve Duggan, CPA is the firm's managing partner and is in our Waterloo office.

FROM THE PEN OF A PARTNER

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Changing employers or retiring are big decisions. However, with that change also comes the decision of what to do with your money from an employee­

sponsored retirement plan, such as a 401(k) plan. Multiple options are available to you, but along with benefits there are also drawbacks to be considered. It is important to remember that these funds are originally intended for providing you financial security during retirement, so evaluating all of your opportunities is important. The following information will explain the options and give you an overall picture of what you should take into consideration for each one. IRA Rollover with Hogan - Hansen Hogan ­ Hansen can assist you with the option of moving funds from your 401(k) plan to a traditional IRA. Research shows that the average investor is better prepared for retirement and beyond when working with an advisor. We can help you define your retirement goals and keep on track after you change employers. In addition, Hogan ­ Hansen can provide holistic, independent advice for your entire financial plan. What you should consider: • A large selection of investment options would be

available, and Hogan ­ Hansen can provide guidance for which options would be the best fit for you.

• Your funds will benefit from investment diversification and continued tax deferral.

• Hogan ­ Hansen works with HK Financial Services to provide professional asset management and regular routine oversight of investments and asset allocation.

• You would maintain full control and flexibility over your funds.

• The Hogan ­ Hansen professionals provide experience and dedication with exceptional customer service.

• It is possible that clients could pay more in advisory fees in some situations when rolling into an IRA versus leaving the funds under the 401(k) plan.

Rollover to New Employer’s Plan You may be able to transfer the funds from your previous plan and roll them over to your new employer’s retirement plan (assuming the plan accepts rollovers).

What you should consider: • The plan may not accept rollovers. • Individual/personalized guidance for fund allocation

may or may not be available. • You would maintain control over investment decisions

for the funds. • This preserves the funds for use in retirement, while

enabling them to continue to grow on a tax­deferred basis. Leave the Funds The funds can remain with the retirement plan from your previous employer, where they will continue to grow on a tax­deferred basis. If you are satisfied with the options available through your existing 401(k) plan, this can be a good alternative. What you should consider: • If your vested balance is $5,000 or less, the plan may

require the removal of funds via lump sum or rollover (see below on IRA Rollover).

• You will be managing the account on your own. Take the Funds You may withdraw the funds as a lump sum and do what­ever you wish with the money. This is, however, rarely a good idea unless you are in need of the funds for an emer­gency situation. What you should consider: • Income taxes will need to be paid on the distributed

amount. This could move you into a higher marginal tax bracket.

Retirement Decisions with Employment Changes

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• Unless one of the exceptions is met, you may also have to pay a 10% premature distribution penalty in addition to regular income tax.

• The funds will no longer benefit from the tax­deferred growth of a qualified retirement plan.

Tax Consequences There are complex rules governing IRA distributions which are important so you know how they may affect you. Proper tax planning of your distribution can save you tax dollars. You should work with your Hogan ­ Hansen tax advisor to develop a strategy for taking distributions so as to minimize your state and federal taxes.

Things you should consider: • Possible Roth conversion • Required minimum distribution rules • IRA rollover rules • Beneficiary designations

Is a payroll provider right for you and your business? While

it is an added expense, there are good reasons to add a partner to help with this service. Here are five things to consider:

1. Allows full attention on growing the business. If a portion of employ­ees is focused on man­aging and processing payroll, business growth opportunity may be stifled. This is especially true if a key employee or owner is the one processing payroll. By outsourcing payroll responsibilities, the full workforce can concentrate on growing the business.

2. Improves accuracy and compliance. Most entrepreneurs didn’t go into business to tabulate hourly time cards, calculate tax

withholdings or stay cur­rent with the constantly changing government filing requirements. Thankfully there are those who specialize in monitoring labor regulations, compliance updates and the number­crunching that payroll requires. This will invariably improve the payroll accuracy a business needs.

3. Lowers audit risk and increases peace of mind. Federal taxes, state taxes, local taxes, Social Security, Medicare, unemployment taxes and overtime require­ments are long (and growing). Payroll serv­ices reduce audit risk on the front end and pro­vide audit assistance on the back end.

4. Enhances internal controls. Separation of duties is an impor­tant internal control for all businesses. This is

tough to do in a small company. Businesses with one or two­person payroll departments are susceptible to fraud or embezzlement. Adding an outside payroll service can provide the checks and balances a company needs to stay protected.

5. Save money. One of the key methods of reducing business costs is adding efficiency. Outsourcing payroll increases efficiencies because payroll profes­sionals need fewer hours to get the job done. These time im­provements, coupled with potential savings in penalties and inter­est, can have a positive effect on net income.

When laying out and understanding all aspects of using a payroll service, it may be time to review your situation.

5 Ways Payroll Services Boost a Business

Thank you for giving us the opportunity to serve you this past year. Your business is

appreciated and your referrals are welcome. Please mention our name to friends and associates who might need our services.

We Appreciate Your Business!

Investment advisory services offered through HK Financial Services (HKFS), an Independent Registered Investment Adviser. Commission­ based securities products are sold by ProEquities registered representatives and offered through ProEquities, Inc., a Registered Broker­Dealer and Member FINRA and SIPC. HKFS, ProEquities and Hogan ­ Hansen are unrelated entities. Neither HKFS nor ProEquities offer accounting, tax or legal services.

Best Wishes for a Happy Holiday Season and a New Year filled

with Peace and Happiness.

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120 East State Street Algona, IA 50511 1601 Golden Aspen Drive, Suite 107 Ames, IA 50010 1370 NW 18th Street, Suite 101 Ankeny, IA 50023 2750 First Avenue, NE, Suite 150 Cedar Rapids, IA 52402 200 North Adams Avenue Mason City, IA 50401 3128 Brockway Road Waterloo, IA 50701 www.hoganhansen.com

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This newsletter is issued quarterly to provide you with an informative summary of current business, financial and tax planning news and opportunities. Do not apply this general information to your specific situation without additional details and/or professional assistance.

Nick Aarsen Principal Jennifer Decker Principal Steve Duggan Principal Damian Hurmence Principal Laura Monaghan Principal Dennis Muyskens Principal Lisa Wall Principal Kristi Wick Principal Algona Ames Ankeny Cedar Rapids Mason City Waterloo

PRSRT STD U.S. POSTAGE

PAID Belmond, IA

PERMIT NO. 54

NOTABLE QUOTESThere’s just something

beautiful about walking on snow that nobody else has walked on.

It makes you believe you’re

special. ­ CAROL RIFKA BRUNT

A wise man will make tools of what comes to hand.

­ THOMAS FULLER

My grandfather once told me that there are two kinds of people: those who do

the work and those who take the credit. He told me to try to be in the first

group; there was less competition there. ­ INDIRA GANDHI

To appreciate the beauty of a snow flake,

it is necessary to stand out in the cold.

­ARISTOTLE