Sometimes employees need cash to pay for unexpected life events and may consider withdrawing money from their 401(k) as a hardship distribution. These distributions can be extremely helpful to the employee in their time of need, but the employer or plan administrator needs to understand the rules surrounding these transactions if they wish to stay in compliance with the regulations of the Internal Revenue Service (“IRS”) and Department of Labor (“DOL”).
Department of Labor (DOL) regulations related to pension plans, health care and other welfare plans are primarily intended to protect employee contributions. One of the main ways of ensuring such contributions are safeguarded is to investigate situations where employers have delays in remitting participant contributions to the participant’s employee benefit plan.
Whether you are a start-up or have been in business for years, you will at one time or another need financing. The cash flow of a business is arguably the most crucial element to keeping operations running smoothly. Cash flow needs can, and will, fluctuate quite often, due to timing of collections and payments. A business might need cash to purchase inventory, equipment, or to cover a payroll and the cash is simply not available to address the current needs.
Most business owners understand and appreciate the need for a properly drafted buy–sell agreement, but too many operate without one – the demands of day-to-day operations relegate such planning to the back burner. One thing I have heard too many times from business partners/co-owners is “when I die, my partner will do the right thing.” Maybe so, but death significantly changes the relationship balance and there is typically a lot of money at stake… a time when people get “funny.”
Often clients and practitioners alike will assume that losses reported on a Schedule K-1 are completely deductible, only to find out later that there was not sufficient basis to take the loss. IRC Sec. 704(d) states that a partner’s distributive share of loss is allowable to the extent of the partner’s adjusted tax basis in the partnership at the end of the partnership year in which such loss occurred. Any losses in excess of the tax basis are disallowed and are carried forward.
Distribution networks that service the grocery sector continue to face escalating challenges in delivering expected service performance at a profit. Manufacturers are increasingly building a better understanding of the costs to service each of their customers and quite often find wide variation due to delivery network geography and order profiles along with product, handling and delivery characteristics.