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HLB International Appoints New Member in Palestinian Ruled Territories

HLB International, one of the leading global accountancy networks with presence in 140 countries, continues its growth with the recent signing of a new member firm in Palestinian Ruled Territories – Palestia.

Palestia is based in Ramallah, a Palestinian city in the central West Bank, north of Jerusalem. Established in 2001, the firm provides services in the fields of Audit, Bookkeeping & Accounting, Compliance, Financial Management, Management Consulting Services, Payroll, Risk Management Solutions and Tax & Legal Services.

Omran Nasser, Partner of Palestia commented: “We are very excited to join the HLB network. This will take our practice to the next level and will enable us to better serve our clients and expand our business.”

Palestia will work closely with other HLB members and makes a great addition to our coverage in the region.

The Georgia Retraining Tax Credit

Is your construction company investing in employees through means such as new equipment, new software, or new technology? If so, your company may be eligible for the Georgia Retraining Tax Credit. The purpose of this credit is to encourage employers to continuously invest in their employees via the very means mentioned above – upgrading equipment, acquiring new technology, and even completing ISO 9000 training.

Only eligible programs qualify for the Georgia Retraining Tax Credit. Eligible programs must be designed to enhance quality and productivity or to teach certain software technologies. The retraining tax credit covers expenses incurred as part of the retraining, although the cost of the new equipment, software, or technology itself is not covered. Covered expenses must be approved by the Technical College System of Georgia and include:

  • Cost of instructors
  • Cost of teaching materials
  • Employee wages during retraining
  • Reasonable travel expenses

The retraining credit is a Georgia-only credit that can be used to offset up to 50% of a company’s Georgia income tax liability. The actual credit amount amounts to 50% of the covered retraining expenses up to $500 per full-time employee per program. The maximum annual credit per employee is $1,250. Should the credit not be fully used in one year, the excess can be carried forward for 10 years.

HLB Gross Collins, P.C. has been serving some of the Southeast’s most prominent construction companies for nearly 50 years. Our Construction Practice works closely with clients to ensure they are taking advantage of all available credits and savings opportunities.

A Health Checklist for your Benefit Plan

As we are approaching the end of summer and the beginning of fall planning, have you considered the health of your employee benefit plan in your list of to-do’s? A study published by Fidelity Investments entitled 2017 Plan Sponsor Attitudes, showed that approximately 40% of companies in North America are not confident in their understanding of plan fiduciary responsibilities. However, a continued rise in seeking professional third party assistance to consult on benefit plans design and performance, showed approximately 90% of plan sponsors are considering hiring new retirement plan advisors and implementing plan design changes to meet the ever changing requirements of the Department of Labor (“DOL”) and the 1974 Employee Retirement Income Security Act (ERISA).

So, where does this leave you with your company’s plan and fiduciary responsibilities, as the plan sponsor? Let’s review some of the top areas where you should do a health assessment, to ensure your plan is dotting its I’s and crossing its T’s to a clean bill of health.

Understanding Your Fiduciary Duty

As the plan sponsor, it is your fiduciary duty to be educated on your roles and responsibilities with monitoring the administration of your company’s employee benefit plan.

  • All plan documents are up to date: your adoption agreement, plan document and summary plan description should be reviewed by your ERISA legal counsel to ensure these documents are complying with the latest requirements of the Internal Revenue Service (“IRS”) and the DOL ERISA regulations.
  • Ensure you understand all options established in your plan adoption agreement and plan document, including knowing:
    • When/how employees can enter the plan
    • Types of allowable contributions (Roth, rollovers, etc.)
    • Vesting schedule for participants
    • Employer matching calculation,
    • Safe harbor provisions in your plan, if any
    • Loans provisions: if they are allowed in the plan, the limits on them (number of loans allowed and total balances to be loaned)
    • How/when benefits can be paid from the plan, including when terminated participants can have deemed distributions from the plan through payment of balances remaining <=$5,000 or automatic rollovers of balances <=$5,00
  • Verifying your 3rd party service providers are fulfilling their contractual obligations
    • Are the Form 5500 filings being completed and filed timely (due by July 31st with extension to October 15th)
    • Are all appropriate annual disclosures being provided to all participants in the plan
      • Summary Plan Description
      • Summary of Material Modification
      • Employee plan statements
      • Summary annual reports of the plan
      • Black out notices
      • Auto enrollment forms, as applicable
  • Ensuring timely and consistent contributions are done to the plan
    • DOL rules require that an employer deposit deferrals to the plan as soon as the employer can; however, in no event can the deposit be later than the 15th business day of the following month. Rules about the 15th business day are not a safe harbor for depositing deferrals; rather, these rules set the maximum deadline for remitting contributions. As an exception, the DOL provides a 7-business-day safe harbor rule for employee contributions to plans with fewer than 100 participants
  • Ensure you know your plan Trustee and what rights they have over the plan’s assets. Under ERISA Section 403(a)there are two types of plan trustees
    • Directed Trustee: holds plan assets but does not control them; they act with direction from a named fiduciary (i.e.-plan sponsor or an investment manager). A directed trustee also has fiduciary responsibility and liability for monitoring the timing of deposits, transactions activity, as well as accuracy and compliance with regulations under the DOL and IRS.
    • Discretionary Trustee: has exclusive authority and discretion to manage and control plan assets. A discretionary trustee has fiduciary responsibility and liability for the selection, monitoring, and replacement of plan assets
  • Understand who your parties-in-interest are to the plan and ensure no inappropriate agreements and/or dealings are undertaken to result in a prohibited transaction
  • Verify the plan’s fidelity bond is up to date on coverage
    • The rule under Section 1112 of ERISA is: a Plan’s fidelity bond should cover at least 10% of the total assets balance, as of the beginning of the plan year, with the bond coverage being no less than $1,000 nor more than $500,000, with certain exceptions for amounts greater than $500,000
  • The plan’s fiduciary insurance coverage meets current needs, for those in a named fiduciary role for the plan, as defined under Section 402(a) of ERISA
  • Verifying all recordkeeping is up to date and maintained
  • Ensuring the plan is not committing prohibited transactions and if such are incurred, they are timely addressed through the DOL Voluntary Correction Program. Your plan’s 3rd service provider (TPA) can assist with these calculations and filings

Any further questions or guidance on best practices for employee benefit plan oversight, please contact our ERISA plans segment leader at lmadajewski@grosscollins.com or 678-306-1222

IRS Guidance for Those Affected by Natural Disasters

For September’s National Preparedness Month, the Internal Revenue Service is offering advice to taxpayers who may be affected by storms, fires, floods or other disasters. After the devastation of Hurricane Harvey and with Hurricane Irma threatening parts of the U.S. and Caribbean, the IRS reminds taxpayers that the agency is here to help, including offering a special toll-free number to taxpayers in federally-declared disaster areas that’s staffed with IRS specialists trained to handle disaster-related issues.

Managed and sponsored by the Federal Emergency Management Agency (FEMA) and the Ready Campaign, National Preparedness Month encourages individuals, businesses and organizations to prepare for a variety of disaster and emergency situations.

Create Electronic Copies of Key Documents
Taxpayers can help themselves by keeping a duplicate set of key documents, including bank statements, tax returns, identifications and insurance policies in a safe place. Store them in a waterproof container and away from the original set.

Doing so is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original documents are only provided on paper, these can be scanned into an electronic format. This way, taxpayers can download them to a storage device such as an external hard drive or USB flash drive, or burn them to a CD or DVD.

Document Valuables
It’s a good idea to photograph or videotape the contents of any home, especially items of higher value. Documenting these items ahead of time will make it easier to quickly claim any available insurance and tax benefits after the disaster strikes. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.

Photographs can help an individual prove the fair market value of items for insurance and casualty loss claims. Ideally, photos should be stored with a friend or family member who lives outside the area.

Check on Fiduciary Bonds
Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

Don’t Forget to Update Emergency Plans
Because a disaster can strike any time, be sure to review emergency plans annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes. Make plans ahead of time and be sure to practice them.

IRS Ready to Help
In the case of a federally-declared disaster, an affected taxpayer can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return. Alternatively, transcripts showing most line items on these returns can be ordered through the Get Transcript link on IRS.gov, by calling 800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript, or Form 4506-T, Request for Transcript of Tax Return.

September/October Dates to Remember

September 15

Individuals. If you are not paying your 2017 income tax through withholding (or will not pay in enough tax during the year that way), pay the third installment of your 2017 estimated tax. Use Form 1040-ES.

Employers. For Social Security, Medicare, withheld income tax, and nonpayroll withholding, deposit the tax for payments in August if the monthly rule applies.

Corporations. Deposit the third installment of estimated income tax for 2017. Use the worksheet Form 1120-W to help estimate tax for the year.

Partnerships. File a 2016 calendar-year return (Form 1065). This due date applies only if you timely requested an automatic six-month extension. Provide each partner with a copy of their final or amended Schedule K­1 (Form 1065) or substitute Schedule K­1 (Form 1065).

S corporations. File a 2016 calendar-year income tax return (Form 1120S) and pay any tax due. This due date applies only if you timely requested an automatic six-month extension. Provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1.

October 2

Estates and Trusts. If you have an automatic 5 ½ month extension to file your estate (other than a bankruptcy estate which have a 6 month extension) or trust tax return for 2016, file Form 1041 and pay any tax, interest, or penalties due. This due date only applies if you timely requested an automatic 5 ½ month extension.

October 16

Individuals. If you have an automatic six-month extension to file your income tax return for 2016, file Form 1040, 1040A, or 1040EZ and pay any tax, interest, or penalties due.

Corporations. File a 2016 calendar-year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic six-month extension.

Employers. For Social Security, Medicare, withheld income tax, and nonpayroll withholding, deposit the tax for payments in September if the monthly rule applies.

October 31

Employers. For Social Security, Medicare, and withheld income tax, file Form 941 for the third quarter of 2017. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until November 13 to file the return.

For federal unemployment tax, deposit the tax owed through September if more than $500.

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