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Monthly Archives: February 2016

401k Early Withdrawal


401k Early Withdrawal…only as your very last resort

Do NOT Seriously Consider 401k Early Withdrawal

You do not want to consider a 401k early withdrawal unless you face a serious emergency or a monumental expense you cannot meet any other way. A 401k early withdrawal represents your last resort; do not consider it until you have exhausted all your other options, consulted with a professional financial planner, and looked very carefully at all your assets and resources.

In fact, the IRS stipulates the conditions under which you may take a 401k early withdrawal without penalty:

· The death or permanent disability of the plan participant

· You have reached age 55 and have left or retired from the company that maintained your 401k. “Left” would include both fired and quit, in which case the company either would encourage or would require you to collect or rollover all the funds in your 401k. Some companies demand that you liquidate your 401k within 60 days of your separation from service, and many charge administrative fees after the sixty-day limit.

· You are receiving your retirement funds under an arrangement for “substantially equal payments” over a lifetime. At least in theory, this exception would apply if you met the criteria for retirement or you had become permanently disabled. The difference here turns on the distinction between a lump-sum distribution and the agreement to accept periodic payments.

· You paid medical expenses totaling more than 7.5% of your adjusted gross income. You do not have to itemize your deductions on your income tax forms to qualify for this exemption, but you must be prepared to substantiate your claims-a properly legal way of saying “save all your bills or receipts.”

· You are subject to “a qualified domestic relations court order”-another very properly legal way of saying that a divorce decree or separation agreement instructs you to take a 401k early withdrawal in order to compensate your ex-spouse.

If you do not satisfy the criteria for a 401k early withdrawal without penalty and tax consequences, you will pay an extra 10% tax on the taxable amount of the withdrawal. And the whole 401k early withdrawal usually is taxable, often at the highest rate the law allows. In some exceptional circumstances you can avoid the penalty, but the 401k early withdrawal always will be added to your income for the year in which you take the distribution. The addition may bump you into a tax bracket which bears no resemblance to the reality of your financial life.

Given that your 401k probably numbers among your largest financial assets, the temptation to cash-it-out makes perfect sense, and some circumstances may render the 10% penalty and extra income taxes almost tolerable. Remember, though, that you have other ways to take money from your 401k without enduring the most painful consequences: Consider, for example, taking a loan from your account instead of requesting a 401k early withdrawal.

Most of all, as you begin weighing any of these options, speak with the 401k administrator at work-usually the payroll person or the Human Resources Specialist. And, then, definitely talk to your tax advisor or your financial planner. Do not make this decision without benefit of expert counsel, and do not make-up your mind too quickly.

[ad_2] Source by Jeffrey DeGraauw

Obamacare – The Pros and Cons


With the President Obama’s health insurance plan now signed into law, it does not mean that the political struggle between Republicans and Democrats to stop. Republicans state that in a free market system is free from government intervention (no need such regulation/subsidization). Democrats argue persuasively and are full of confidence that in order to get out of economic crisis, are more important to help poor people uninsured to get cheap health insurance and to reduce the number of unemployed.

According to President Obama, small businesses that meet with the eligibility (the average annual wages for the companies should be under $ 50,000), tax credit allows businesses to hire more valuable employees, which could increase efficiency and profits, despite an insurance mandate that will affect small businesses over the next decade. About four million small businesses could claim the tax credit between 2010 and 2013, as well as two years after they initially file for it. After 2014, they will receive tax subsidies for up to 50% of their group health insurance expenses. The bill offers an immediate tax credit to businesses with fewer than 25 employees.

Whose policy is right? In politics, truth is relative and assessment decisions will be determined by the American people in the year 2013 Presidential election.

There are several reasons that people are not insured:

– They have pre-existing conditions which the insurance policy does not cover.

– They can not afford the health insurance (special programs).

– They chose not to have it even they are able and rich.

Since the Obamacare now has become law, then you can no longer say I still will not pay the insurance premiums.

– Every citizen of the US is now obliged to take out a health plan.

– If you do not take out insurance you will face fines.

– If you do not take out insurance and claim you cannot afford it, your accounts and savings will be investigated by the IRS.

So now is the time for all inhabitants of the United States to begin to pay attention to the health insurance plans.

[ad_2] Source by Steven A. W.

Develop a Leadership Philosophy


A leadership philosophy is a set of beliefs and principles that strongly influence how we perceive ourselves within an organization and those that we lead. It is an essential ingredient in forming our vision, goals and behavior within the organization that we lead.

First it is useful to define leadership. Leadership is the individual phenomenon of influencing others, inspiring them to do their best, Giving them purpose, guidance and motivation. The best leadership style is one that is adapted to the situation, otherwise known as situational leadership. Leadership is different from management as management does not have to involve inspiring or motivating others.

Most leaders in any role agree that vision, values, adapting to change, knowing oneself and others, professional knowledge and good communication are essential components of leadership. I believe that one of the most important elements of these is vision. Without vision a leader is lost.

Burt Nanus, a noted consultant in leadership, vision, and strategic planning for business, government, and non-profit organizations is a Professor at the University of Southern California. Nanus writes that vision must be idealistic and a “mental model of a future state of the organization.” He asserts that vision must be appropriate and include standards of excellence, purpose, and direction. Organizational vision must be ambitious, easily articulated, and well understood.

Forming a mental image of where you want your organization to be and what it should look like in the future is essential before you plan, decide and direct others on how to get there.

Before directing others on how to attain that vision it must first be communicated, shared and understood by all within the organization. Ensure that the vision is clear, unambiguous, energetic, imaginative, inspiring, achievable and relevant to the organizations goals.

Values Values are crucial to organizational success. Leaders know what they value and recognize the importance of ethical behavior. The best leaders practice both values and ethnics in the workplace.

People don’t know what they can expect in a leader if leaders never identify their values. If leaders identify and share their values, living the values daily will help to create trust.

As a leader, choose the values and the ethics that are most important to you, the values and ethics you believe in and that define your character. Then live them visibly every day at work. Living by your values is one of the most powerful tools available to you to help you lead and influence others.

Adapting to Change Adapting to change can make the difference between organizational success and failure. It is essential you have a philosophy that embraces change. An organization that is resilient is one that can effectively innovate, adapt and perform in the face of adversity.

To cope with change ensure you have a clear focus around purpose and goals. Be flexible and open to new approaches, encourage a climate of learning and creativity and a culture of trust and cooperation combined with good communication.

Knowing oneself True leaders posses the ability to analyze their own motives and decisions and make accurate judgments about their behavior. These judgments can result in constructive improvements in how they relate to others and help identify unhelpful reactions or traits.

Perhaps you have a tendency to control or dominate based on a fear of failure; perhaps you have a fear of conflict and a desire to appease others; or an excessive competitiveness that leads to distrust. Knowing yourself better will help you improve and make adjustments that will make you a more effective leader.

Knowing others Knowing others is important to situational leaders who adopt different leadership styles depending on the situation and person they are dealing with.

Paul Hersey created a model for Situational Leadership in the late 1960’s that allows you to analyze the needs of the situation you’re dealing with, and then adopt the most appropriate leadership style.

The right leadership style will depend very much on knowing the person being led, which is the follower and should take into account that persons development, skills and knowledge. Therefore adapt your leadership style to the competence and commitment of the follower.

For example a new employer who lacks skills and experience will require a more supportive style of leadership where the leader takes a much greater role in the decision process. With a more experienced employer a leader may seek the ideas and suggestions from the follower.

Professional knowledge Knowledge and skills is a very essential element to leadership as it insures trust in your competence which is necessary to inspire and motivate others.

Professional knowledge and expertise will vary for different organizations but the following are skills that are commonly required in the workplace.

• Knowledge of the rules of the organization • Legal knowledge • Accounting • Business Knowledge • Presentation skills • Team Management • Time management • Managing complexity • Organizational awareness • Managing change.

Good Communication Good communication is necessary not just for communicating instructions or tasks that need completed but also for motivating, inspiring and influencing others. Whether it is to motivate action, influence tough executives, customers, or stakeholders communication is an essential component of leadership.

Also remember that communication is not always oral. The way that you present yourself, your policies, and how your initiatives are designed and delivered communicates more strongly than your words.

[ad_2] Source by Simon Ashley

How to Nail Your Investment Banking Interviews


Ok, so you’ve got your big interview at that Investment Bank you’ve wanted to work at since you first heard of it. How do you prepare?

The thing is, not all investment banks are the same and you can’t always tell what’s going to happen in every interview.

To be honest though, there is a way to almost guarantee your success and that’s by anticipating what’s going to go down at your interview and preparing for it in advance.

First, let’s be clear. Fit questions will always be more important than the investment banking technical questions. I mean, these people don’t expect you to know it all when it comes to the financial world. They do expect you to have a good knowledge of it, but what they’re looking for the most is whether you’ll be a good addition to their firm.

The way you can tick all their boxes is to come across interested in business and the financial world, and also willing to learn and eager to work hard. Also, when you get asked the requisite questions on what you would do in certain situations, make sure you give examples from your own life. Hint: have 4-5 stories accentuating your relevant strengths – this will set you apart.

But the way to almost guarantee your success with investment banking interview [] questions is to be enthusiastic about what you’re saying. Interviewers cannot resist someone with FIRE, someone who’s positive, great to get along with.

Here’s the key: Make them want to work with someone like you.

Another good thing to do is to be prepared for all the logistics. You should be prepared to speak with a banker in every level of the firm at some point. We’re talking analysts, associates, VP’s and perhaps MD. You should be ready to have a very high-pressured day, full of interviews, tests, group exercises and assessments. Make sure you arrive on time in the morning and socialize with the other candidates. People will be watching you, so you should be at your most social and professional.

So in summary, prepare for the investment banking interviews in advance, link the fit questions back to your own experiences, be personable and charming and think about the logistics on the day itself. You’ll be getting investment banking job offers in no time!

[ad_2] Source by Brett J. Riley

Set Up an Effective Accounting System


As everyone knows, accounting is mandatory to run a business. Of course, you should be aware of the income and expenses out of what you are doing. Hence, all your transactions have to be recorded in a sequential manner to learn the profit and loss of your business. There are ways to gain more profit by maintaining your accounting system properly. In a single word we can say that accounting is a precise list of all financial transactions. It gives you fruitful results when you keep all the records perfectly. Even If you missed to record a trivial data, it is going to create a big chaos in the final financial documents. You will be messed up with lot of things and you have to break your head. This article will give you specific ideas to build an effective accounting system which will not only helps you to complete the accounting tasks but also helps you to improve the growth of your business.

Accounting helps you to understand specifically from where you gain more profit and where you are spending unwanted expenses. This could obviously help you to identify the unnecessary expenses and to reduce them. If you done so, you can save a considerable amount and in turn you can invest those into the tasks where you get more profit. A system of composing the financial documents in the end of every month or at least quarterly is a good habit of protecting your business from loss. You can prepare documents such as balance sheet, profit and loss account and cash flow projection. Comparing these documents with other reports will depict a clear picture about the present financial status of your enterprise.

When you are planning to set up a systematic accounting system, you should be cleared about the method of accounting that you are going to adopt. There are two types of methods are in practice. They are, 1. Cash based method, 2. Accrual method. You can adopt the cash based method if you run a small business. Using this method, you will record the income when you actually received it and record your expenditure when you actually spent it. In accrual method, the transactions will be recorded even before you receive the hard cash for the services or the product you provide. The sales will be recorded when it is consummated and not necessary to wait till you receive the payment for it. Companies that adopt invoicing system use the accrual method. Mostly the large scale industries use this second type of accounting method.

After analyzing the method, you have to choose the best accounting software that suits your business. There are many accounting software available these days. Most of the companies switched all their transaction details from papers to computer using this software. Once you determine the method and the recording platform, prepare your chart of accounts. List out all the categories and the sub categories. Prefer to go with the software that has “double entry” standard. In this software platform, you need to record the same transaction entry twice. When you recording a transaction, you must enter the same in the corresponding opposite side and both of the entries should be balanced. This method would be more accurate of compiling the financial entries. You must maintain this system every week, if you cannot do it on a daily basis. Try to record all the transactions on the same day itself. Finally, recheck all the details during the end of the week and finish it off the week account. When you prolong the operations, it seems to be voluminous. You should reconcile your accounts on everyday basis and do not store it up. Reconciliation is really mandatory and it should be done on a regular basis to avoid any kind of chaos in the last minute. These are all the important ideas to set up a proper accounting system. If you got to say any other effective ideas you can include them as a comment.

[ad_2] Source by Mary Leo L Joyce