Avoid 401(k) Compliance Mistakes in Las Vegas

401 (k) Las VegasAs an employer, one of your main goals should be keeping your employees happy. And you can keep your employees happy without losing favorable 401(k) tax benefits, paying penalties or facing liabilities.

In the process, don’t forget to take the changes caused by the SECURE 2.0 Act into consideration, namely in terms of retirement savings plans. SECURE 2.0 might mean you have to make amendments to any of your company’s existing plans or retirement account offerings.

When you’re looking to avoid costly mistakes while keeping everyone satisfied, keep the following 401(k) compliance requirements in mind.

Amend all retirement plans

Amend all retirement plans in line with changes that are made to the law. These changes can either be statutory, regulatory or government mandated, so stay in the know and pay attention to all the possibilities.

More specifically, take a moment to revise the changes caused by SECURE 2.0, especially because over 90 changes have been enacted. There are also differences between discretionary and optional plan adjustments.

Define the details of the plans

It’s important to make sure the 401(k) plan operates in alignment with the terms associated with it. If this is not the case, negative tax consequences or a breach of fiduciary duty, if not both, may result. Properly define the meaning behind compensation and then use that definition to determine allocations for each employee’s 401(k) plan.

Confirm your employees are eligible for the plans

Always ensure that applicable employer-matching contributions as well as nonelective contributions are distributed in a timely fashion. Making sure the proper allocations are distributed to each employee is essential as well. Double-check the eligibility of your employees and whether they can reap the benefits of your 401(k) plans.

Pay attention to the administrative side of the plans

As an employer, it is important that you ensure all of your employees’ 401(k) plans are properly managed and handled. Employees who participate in work-related 401(k) plans can borrow from their 401(k) plan if that is an option you make available to them.

However, if employees choose to withdraw from their 401(k) plans, legal compliance must be intact. Ensure your employees understand that the money they borrow must be repaid in a timely fashion in order to avoid interest fees or additional taxes.

Stay on top of tax-related matters

When offering 401(k) plans to your employees, you must file Form 5500, which details your annual returns-related information. This form must be submitted to the Department of Labor so that you can avoid having to pay significant late fees or deal with associated penalties.

Also, it’s your responsibility to deposit elective deferrals on behalf of your employees. Provisions implemented by SECURE 2.0 yield a lot of new benefits that are intentionally designed to make offering retirement plans to your employees more attractive for you as an employer.

Furthermore, the Consolidated Appropriations Act of 2023 adds to SECURE 2.0. Ultimately, SECURE 2.0 addresses a number of issues that deterred employees from participating in employer-backed 401(k) plans in the past.

Always make sure you adhere to the rules of contributing and withdrawing from retirement accounts. For example, you have to let your employees make automatic withdrawals or contributions without being subject to the 10% penalty resulting from early withdrawals.

Also, SECURE 2.0 has expanded the Employee Plans Compliance Resolution System, allowing for more leeway when it comes to the correction of internal errors. New rules have been added in terms of handling overpayments as well. To see the specifics of the rules surrounding 401(k) compliance, visit the DOL and Treasury Department websites.

Need Help Avoiding 401(k) Compliance Mistakes?

Please give us a call in the coming weeks to discuss these ideas and others that may apply to your situation. At Layton Layton & Tobler we help our clients plan ahead so they won’t be caught unawares. Contact us today to schedule a consultation. We can also help you with payroll preparation and auditing.

Experts at Year-Round Tax Planning Serving Las Vegas Area Businesses

Serving Las Vegas, Summerlin & Henderson

Posted on July 21, 2023 | Published by Ignite Local | Related Local Business

Tax Planning: A Year-Round Task for Las Vegas Businesses

tax planning las vegasTax planning is a 12-month activity. It’s not something you try to fix fast as Dec. 31 approaches or a task to panic about right before April 15. Below are some items you can address throughout the year, in conjunction with your tax adviser.

Personal tax issues

The individual income tax rates have remained constant for the past several years, while the sizes of the tax brackets have been increased modestly.

Delay Taxation Where Appropriate

If you expect that your marginal income tax rate will be lower in future years, it may be beneficial to delay income (such as discretionary bonuses) where possible. Conversely, if you expect your marginal rate to increase in future years, it may be beneficial to accelerate taxable income into a year when your marginal rate is lower. In all cases, you should consider the timing implications of when you’ll pay the tax.

Review your Capital Gains and Losses

Be sure to examine your transactions to see if you have any net gains. If you do, consider selling some losing positions to offset them — you are allowed to use up to $3,000 of net capital losses to reduce your taxable income. Unused realized losses can be carried forward.


If year-end charitable contributions are in your plans, consider contributing appreciated stock instead of cash. You get the deduction for the full fair market value and avoid paying tax on the gain.

Individuals aged 50 and over can make “catch-up” contributions to IRAs and 401(k) plans. Be sure to take as much advantage as you can to secure your retirement years.

Beware of the Alternative Minimum Tax

Originally enacted to force high-income taxpayers to pay tax, this complicated additional tax is catching many people unaware. If your income is relatively high or if you have high levels of itemized deductions (especially income or property taxes), you will need to discuss this with your tax adviser. The AMT can also apply to individuals with incentive stock options.

Business tax issues

  • Qualified retirement plans. Be sure to get the maximum tax benefits from any retirement plan you participate in. Consider making contributions to an IRA, even if the contribution will not be deductible. Getting funds into an IRA where the earnings are tax deferred will save you money.
  • Control your wages. Many business owners can control when they pay themselves, especially year-end bonuses. Be sure to understand the interplay between your business’s and your personal tax situation to get the best solution.
  • Maximize your deductions. Be sure to take all the deductions to which you are entitled. If you use your personal automobile for business or have a home office, review the rules to get the maximum benefit. The IRS also notes that taxpayers may elect to expense the cost of any Section 179 property and deduct it in the year the property is placed in service. Be sure your records support any travel and entertainment expenses.

Need Help with Tax Planning in Las Vegas?

Please give us a call in the coming weeks to discuss these ideas and others that may apply to your situation. At Layton Layton & Tobler we help our clients plan ahead so they won’t be caught unawares. Contact us today to schedule a consultation. We can also help you with payroll preparation and auditing.

Experts at Year-Round Tax Planning Serving Las Vegas Area Businesses

Serving Las Vegas, Summerlin & Henderson

Posted on June 15, 2023 | Published by Ignite Local | Related Local Business

Top Tax Issues for Businesses in Henderson

tax issues hendersonAgencies typically apply different taxes to various situations based on each individual agency’s rules, regulations and payment methods. Contrary to what people often say, what you don’t know actually can hurt you, so becoming more knowledgeable about tax issues that businesses often face is key.

3 Tax Issues That Can Affect Your Bottom Line

Here are three common tax issues that can ultimately affect your bottom line in the long run.

1. Underpaying taxes and keeping records poorly

The first common tax issue to be mindful of is accidentally underpaying your taxes as a result of incorrectly or negligently storing records. As a business owner, you will collect sales tax from your customers. Let’s say you fail to pay that sales tax to the state in which your business operates. As a result, you will inevitably end up underpaying your sales and use taxes, both of which you are obliged to pay.

Another example is a situation in which you operate a cash-based business and find yourself needing to prove your personal income. You may end up paying too little toward your income tax, thinking that your estimated quarterly tax is optional — but it is not.

In all actuality, paying quarterly taxes is mandatory, and you absolutely must pay your income taxes in full and on time. Otherwise, you will be subject to undesirable outcomes, such as costly penalties and high APR interest that will be applied toward your unpaid taxes.

Last but not least, failing to take care of your records and maintain accurate copies of them could result in many different problems when tax-filing season rolls around. This is particularly true if you end up being audited by the IRS.

Keep in mind that sometimes people underpay their taxes merely because taxes are very complicated and the complexity of it all can confuse taxpayers. While it can be rather costly to hire a professional to help you with your tax-related matters, the consequences of inaccurately paying your taxes can be even more expensive. Being proactive can help you in the long run.

2. Misclassifying your business or business-related matters

As a business owner, you already have a lot of responsibilities to handle, but the classification of your business is not a matter you should take lightly. Pay attention to even the smallest of details. For instance, look into whether a franchise tax exists in your state. If it does, you’ll need to determine which forms you have to fill out and how much tax you will owe based on your company’s business entity classification.

3. Incorrectly classifying your employees

When hiring people to work for your business, you will have to decide whether you’ll onboard workers as employees or contractors. Take your time with this decision, as misclassifying an employee as an independent contractor or vice versa will impact how much you’ll need to withhold in taxes.

Avoidance is Not the Answer

Some business owners avoid filing their taxes on time because they cannot afford the final tax balance they owe for the previous tax year. However, avoidance is not the answer, especially because failing to file your taxes can result in a number of negative consequences, ranging from sky-high interest rates and unwanted penalties to a 25% failure-to-file fee, which will be added on to your overall bill if at least five months have passed since the date your taxes were due.

Thankfully, many of these issues are preventable when you know what to look out for and how to manage your taxes come tax time. It never hurts to hire a professional who understands business taxes, as they can help you adhere to regulations in a timely fashion.

Maintain Accurate Records

Another way to make paying your business taxes a lot easier is to maintain accurate records throughout each tax year. Stay on top of the receipts associated with the deductions you plan to make, as deductions can sometimes yield additional proof that the money you spent was truly business related. Always save any tax files or workbooks that you used as you calculated your taxes as well.

Keep Good Records

Hold on to your tax records for four years at a minimum. Some people will even encourage you to maintain your records for no fewer than 12 years! Either way, make it a point to keep the records associated with the taxes you collected from customers in a distinctly separate account that is easy for you to access should you ever need to.

Stay Current on Changing Tax Laws

The best plan of action is to stay updated on current and ever-changing tax laws so you can be prepared to pay the amount you owe every year. And remember that not every company underestimates what it owes.

Rather, some businesses overpay their taxes, which typically results from their failing to claim all the tax deductions they are eligible for and take advantage of the credits available to them. Either way, sometimes the most common tax mistakes can have a significant impact on your company’s bottom line.

When you make it a point to always keep your business taxes in mind, you can turn the tax-planning process into a year-round activity. This can set you up for success; do not ignore all your tax-related matters until April. If you need additional assistance managing your business taxes, contact a professional today!

Need Help Dealing with Tax Issues in Henderson?

Becoming more knowledgeable about tax issues that businesses often face is key in preparing for tax filing each year. At Layton Layton & Tobler we help our clients do just that. Contact us today to schedule a consultation. We can also help you with payroll preparation and auditing.

Experts at Key Tax Issues Serving Henderson Area Businesses

Serving Las Vegas, Summerlin & Henderson

Posted on May 15, 2023 | Published by Ignite Local | Related Local Business