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October 13, 2016

 
Frazer LLP
 
 

Hi There!,

There’s a lot to think about when you change jobs, and it’s easy for a 401(k) or other employer-sponsored retirement plan to get lost in the shuffle. But to keep building tax-deferred savings, it’s important to make an informed decision about your old plan. First and foremost, don’t take a lump-sum distribution from your old employer’s retirement plan. It generally will be taxable and, if you’re under age 59½, subject to a 10% early-withdrawal penalty. Here are three tax-smart alternatives:

1. Stay put. You may be able to leave your money in your old plan. But if you’ll be participating in your new employer’s plan or you already have an IRA, keeping track of multiple plans can make managing your retirement assets more difficult. Also consider how well the old plan’s investment options meet your needs.

2. Roll over to your new employer’s plan. This may be beneficial if it leaves you with only one retirement plan to keep track of. But evaluate the new plan’s investment options.

3. Roll over to an IRA. If you participate in your new employer’s plan, this will require keeping track of two plans. But it may be the best alternative because IRAs offer nearly unlimited investment choices.

If you choose a rollover, request a direct rollover from your old plan to your new plan or IRA. If instead the funds are sent to you by check, you’ll need to make an indirect rollover (that is, deposit the funds into an IRA) within 60 days to avoid tax and potential penalties.

Also, be aware that the check you receive from your old plan will, unless an exception applies, be net of 20% federal income tax withholding. If you don’t roll over the gross amount (making up for the withheld amount with other funds), you’ll be subject to income tax — and potentially the 10% penalty — on the difference.

There are additional issues to consider when deciding what to do with your old retirement plan. We can help you make an informed decision — and avoid potential tax traps. Contact us in Brea, 714.990.1040 or Visalia, 559.732.4135 for assistance.


 
 
 
 
 

 

Our complimentary Webinar Series for Contractors continues on October 27, 2016, 10:00-10:45 a.m. Pacific. Register by clicking the button below.

October 27, 2016
Enhance Your Wealth With Targeted Tax Strategies

Another tax year end is approaching. It’s time to turn your attention to tax strategies that could lessen your tax obligation and enhance your wealth. Attend this webinar for a review of tax strategies that could accomplish both goals.

Presented by:  
Lou Rendon, CPA, MBT
Partner, Frazer, LLP

November 17, 2016
Take Advantage of Tax Credits

Are you aware of research and development (R&D) incentive programs? Are you taking full advantage of the R&D Tax Credit? Attend this webinar and learn about the broad range of common construction industry practices that qualify for the credit and how to claim the credits you deserve.

Presented by:
alliantgroup

Register Today!



 

Frazer webinar for dairy farmers

 

Gather your dairy management team and attend our complimentary webinar:

How Do World Markets Impact My Dairy?
Wednesday, November 16, 2016
2:00-3:00 p.m. Pacific

The volatility in the dairy industry is scary and unpredictable. It’s more important than ever for you to understand your financial position and project future revenue in order to make smart decisions. Attend this webinar and learn:

  • How to interpret your dairy’s financial statement.
  • How to manage risk using forecasts, projections, and budgeting.
  • How to apply this information to make informed, smart choices for your dairy.

Presented by Frazer, LLP, the leading dairy accounting and consulting firm and author of the top industry source of relevant dairy statistics – Dairy Farm Operating Trends – High Ground Dairy Risk Management and Commodities Plus, you will leave this webinar with a better understanding of how world markets impact your dairy and what you can do about it.

Register Today!

 
 

Frazer LLP | 135 S. State College Blvd., Brea, CA
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