We have an upcoming seminar! The topic is Business Succession Planning on January 26th from 4:00-5:30PM and January 27th from 8:00-9:30AM. See the flyer for more details.

'Tis The Season

The week of Thanksgiving, I, along with others at our office, had the opportunity to visit KITH and help them with their fall mailings. KITH, which stands for Kirkland Inter-faith Transitional Housing, is a 501(c)(3) non-profit organization (more about that later) that provides transitional and longer term housing, case management and practical support for individuals and families in East King County. They are a truly great organization who last year helped 126 individuals facing a crisis of homelessness. Sitting in their conference room, listening to the stories of the people they have helped, I was reminded how blessed I am. I have a job. I have a home and food to feed my family. And I have wonderful, supportive friends and family to help me along the way.

This time of the year, most people are thankful for these things too and are reminded of those who do not have as much. In fact, according to a 7 year study by Network for Good (www.networkforgood.org), up to 33% of annual giving occurs in the month of December compared to the rest of the year! Not only does this help out charitable organizations but there is also a tax benefit to donating as well. If you donate to a non-profit organization, like KITH, you can claim a deduction on your tax return! While this is limited by certain other items, such as your own income, it is still a great way to lower the amount of taxes you owe while at the same time helping people in need.

So, in the spirit of the season, Hersman Serles Almond will donate $1 to KITH for every new follower we get on Twitter or new ‘like’ we get on Facebook through the end of the year. To find the links for these social media pages visit our new website’s News page (http://www.cpahsa.com/news.php). We currently have 118 Twitter followers and 12 Facebook ‘likes.’

To find great organizations for your company or family to donate to during this holiday season, check the Network for Good website. Also, it is always a good idea to double check the IRS website to make sure that the money you are giving to an organization is deductible (http://www.irs.gov/app/pub-78/).


Happy Holidays! ~Andy Bauerle

Common Pitfalls with 401K Plans

In light of our upcoming seminar on retirement planing, (Thursday, August 25th: noon or 4pm at our offices) here is some information on common pitfalls with 401K plans. This information has been posted before, however the information is just as timely now as it was then.

Here is is...

Common Pitfalls with 401K Plans

Setting up a 401K plan is a great way to provide employee benefits and at the same time create some great tax deferral opportunities. However there are some things that need to be considering when starting up a plan. Many of these are items that your plan provider usually does not mention.

1. Fiduciary Responsibility: As a trustee of a 401K plan, you have a fiduciary obligation to the plan. Meaning that you are personally liable for this obligation. As the investment adviser to the plan you are have a responsibility to the participates, to providing the tools for investment advice, monitoring of the plan, replacement of money managers and selecting the funds the plan will have. This is a major responsibility that most 401K plan trustees have no idea about. Since the liability is a fiduciary responsibility a plan trustee is putting their own personal at risk by developing a 401K plan.

2. The Middle Men: It is important to know which organization are responsible for what with respect to the plan. Every plan usually has multiple companies involved. They are the plan administrator: the company that handles the record keeping of the plan. The custodian: the company that holds custody of the plan assets. The money managers: these are the organizations that are handling the actual investment funds. The plan advisors: This is organization that provides the guidance and investment knowledge for the participants and the trustees. It is important to know who is who and understand what each of the companies are actually doing for the plan and what their fees are. If you are paying fees to a plan administrator, but you do not know who they are or what they are doing – then you have an issue! You need to maximize the services that you receive since the plan is paying for them!

3. Tax Filings:Who is preparing the 5500? And do you know when it is due? This is a big concern as the IRS penalty for a late Form 5500 filing is $15,000. That is a big number. You need to know who is preparing the form (typically this is the plan administrator) and when they are mailing it to you for signature and filing. People would be shocked to learn about the number of companies that have a completed Form 5500 that is unsigned and not filed sitting in an old stack of mail because the plan trustee was not expecting the 5500 nor did they even know that they had a filing requirement. The IRS is making a point to crack down on non-filers and is being aggressive with issuing out penalties.

4. What are those 12b-1 fees? A 12b-1 fee is an extra fee charged by some mutual funds. The fees are used to cover promotion and marketing expenses related to the funds. The concept was that if the fund was advertised more and more people invested in the fund, the overall fees would drop and thus make it cheaper for everyone. However in practice, this theory has not been substantiated. Mainly these fee is used to reward intermediaries for selling a fund’s shares, thus they do nothing to enhance the performance of the fund. Some companies will credit this fee back to the plan in order to reduce the overall costs of the plan.

Seminar Series:

SEP, 401K, SIMPLE: What is the best plan for me?

Join Us on the 25th at Noon or 4pm!

HSA Upcoming Seminar! Trusts 101 July 28th

Please Join Us for our Upcoming Seminar: Trusts 101

Thursday July 28th @ noon and 4pm

Please Join us for our Upcoming Seminar!

Retirement Planning Seminar

Hersman Serles Almond, PLL presents our first seminar in our "Planning for the Future" Seminar Series:

Retirement Planning:

Avoiding Pitfalls & Creating Successful Strategies

Join us to learn how to be retired and stay retired:

· How to determine if my retirement plan is sustainable
· How to manage distributions from retirement funds
· Effectively allocate retirement funds for long term success
This promises to be an entertaining and informative presentation!

Two Sessions:

Tuesday, May 24th, 2011

Noon-1pm (Lunch will be provided)Or
4-5 pm (Appetizers and wine will be provided)

The offices of Hersman Serles Almond, PLLC520 Kirkland Way, Suite 300, Kirkland, WA 98033RSVP: (425) 822-6557 or info@cpahsa.com

Please RSVP as space is limited