Several of the most common benefit plans and account types have an increased allowance for contribution limits in 2015. The IRS has announced that it will raise the annual dollar limit on contributions for health care flexible spending accounts (FSAs), health savings accounts (HSAs), and 401(k) accounts based on cost of living adjustments (COLAs). These limits are reviewed annually by the IRS.

Health Care Flexible Spending Accounts (FSA)- The maximum allowed amount that an employee can contribute to an employer-sponsored health care FSA will be $2,550 in 2015 which is a $50 increase from the previously allowed amount of $2,500.

Health Savings Accounts (HSA)- The maximum allowed contribution amount for individuals to a Health Savings Account will increase by $50 for 2015 going from $3,300 to $3,350. The limit for contributions for a family will also increase in 2015 going from $6,550 to $6,650, an increase of $100.

401(k) Accounts- In 2015, employees will be able to contribute up to $18,000 for the year to their 401(k) account. This is a $500 increase from 2014. This increase also applies to several other types of retirement accounts such as 403(b) accounts and profit-sharing plans.

Employers that offer FSA, HSA and 401(k) accounts should ensure that they have communicated these increases to their employees if the employer decides to adopt the higher limits for 2015. These increases may also require changes and revisions to existing written employer communications and to open enrollment materials.

California Minimum Wage has increased to $9.00 per hour.

For more information visit:

http://www.dir.ca.gov/dlse/faq_minimumwage.htm

MW-2014

When running a small business, you have to make sure you stay focused on accounting. If you don’t manage debt, receivables, and marketing expenses accurately, your company will sink before it grows.

You can save your company by implementing simple bookkeeping strategies. Here are five accounting tips to help grow your business.

1. Weigh the options of bookkeeper vs. DIY accounting.

Though entrepreneurs might feel ready to act as head of accounting, sales, and marketing at the same time to cut costs, it may help to hire a bookkeeper. It can help you to know someone with experience and deeper understanding is working on your books. To start, you can hire someone part time or as a freelancer, so you’re not paying a full time wage for these services.

2. Keep accounts receivable payments separate from borrowed funds.

Small business owners need financial backing and/or loans for startup capital, marketing campaigns, and other initial things in the early days. To make sure the loans don’t appear in the receivables, use software that separates income from borrowed funds. Don’t lose sight of what is yours and what needs paying back.

3. Don’t allow clients to get away with not paying balances.

Seeing a large amount in the receivables column is a good thing, but the money doesn’t really count until it is in your bank account. Don’t let clients avoid regular payments. Stand firm and insist you receive payment for past orders before letting them have more materials or services. The receivables department is crucial in keeping your company afloat.

4. Detail daily expenses so you can budget for the coming weeks.

It’s a good idea for business owners to keep records of everyday expenses they incur in the company. Instead of calculating expenses every two weeks for payroll purposes, focus on every day or every week. This can help you have a better idea of where finances are each week and how much money you’ll need to budget for in the upcoming weeks.

5. Calculate a minimum monthly profit.

When planning how much it takes to keep a small business running, the numbers can get complicated. Devise an accurate system of expenses and regular obligations so you know exactly the minimum income you need every month. Because income can be the easiest to calculate, make a strict target you’ll need to earn. Without that exactitude, accounting becomes confusing and your business can suffer.

Accounting is as important your first week in business as it is during tax filing time. Use these five accounting tips to keep your business’s finances healthy and stable every day of operation.

In response to many requests of what tax records should be kept and how long, we have prepared the following list for your reference based on Federal Laws.

Income tax returns and supporting documents – Keep at least 4 years and preferably 7 if space is not critical. Once this period has elapsed, the documents can be discarded, but the returns themselves, which do not take much space, should probably be retained indefinitely.

Residential property records – All escrow statements (purchase and sale) plus receipts for improvements should be kept for at least 5 years after property is sold. (Including refinance papers)

Purchase receipts for stocks, bonds, mutual funds – These should also be kept for at least 5 years after the asset is sold. This would include record of stock dividends, splits and reinvested dividends.

Depreciation records – For any rental real estate or depreciable business property you own, keep records of the property’s cost, date acquired, and schedule of depreciation claimed in previous years. This record should be kept until 5 years after the property is disposed of.

Retirement plan contributions – Records of non-deductible IRA deposits, employer plan stock purchased, rollovers, and Keogh plan deposits should be kept until 5 years after the plan assets have been withdrawn.

Personal records – Important papers such as estate and gift returns, divorce and property settlement agreements, deeds, title insurance policies, and all trust documents should be kept in a permanent file, or perhaps a safe deposit box.

Miscellaneous papers – All other documents to include bank statements, canceled checks, credit card statements, deposit slips, charitable contribution receipts, and medical bills can be discarded after 5 years.

This Action Plan requires five steps:

1. List your regular monthly bills, such as your mortgage or rent, car loan, utilities, phone, Internet service, cable TV, credit-card bills (and any interest you pay, too), insurance premiums and child-care expenses.

2. Track your out-of-pocket spending for a week. Keep track of all the money you spend for a week on groceries, gas, meals, clothes, entertainment, personal items, and even sodas and snacks, which can all add up. Keep a small notebook with you, use this expense chart or just collect the receipts during the day and add them to the list in the evening. Keep track of all expenses for the week, whether you pay for them in cash or use a debit card, credit card or check.

3. Review the numbers. Now that you can see how you’ve spent your money, look for ways to save. Some strategies may be simple, like cutting back on meals out or using in-network ATMs to avoid fees. You may also want to make bigger changes that can save more money, such as cutting back on your cell phone package or dropping cable TV.

4. Review your big-ticket expenses. After you’ve reviewed your regular expenses, it can also help to review your big-ticket bills for the past year—the special expenses such as home improvements, car repairs, travel, education, furniture and electronics. These bills don’t crop up every month but can make a big difference in your finances—and can land you in debt if you aren’t prepared. Go through your credit card statements, bank records and receipts to list the cost of these items. If you don’t have good records of these expenses from the past year, start keeping a log of them from this point forward. Looking at these irregular costs will help you plan better for emergencies and other unexpected bills.

5. Create a plan. Review all of your expenses for ways to cut back, then decide what to do with the extra money. Set specific goals, such as building an emergency fund, paying off your credit-card bills, or increasing your retirement savings.