Filing 1099’s for your Contractors

January 18, 2021

One of the first responsibilities for the business owner in the new year is to get the yearend tax documents to their employees and contractors.  Because of its complexities, a business owner often uses a payroll service firm so the completion of employee W-2’s are handled by these professionals.  While a professional is not needed throughout the year for payments to contractors, attention to the yearend responsibilities should be made but often is not.  As a result, January comes around and the business owner is not ready to prepare the 1099’s.  I believe at a fee starting at $10/form, a business owner should hire a firm like mine to prepare the forms.  But for those who want to go it alone, here is some guidance.

This year is different in that contractors will get a Form 1099-NEC as opposed to Form 1099-MISC in years past.  Second remember who is eligible for the form.  A person or LLC who earns at least $600 for services should get a form.  A corporation regardless of size does not get one.  Similarly, the contractor who you bought a product does not get one.

The information required is simple – name, address, and social security number (SS#) or employer identification number (EIN).  You can give the contractor a Form W-9 that allows them to provide the needed information.  One common mistake is a person who formed an LLC will fill in everything and thus give both SS# and EIN.  In this case I would strike out the personal information and include only business information.  Should an eligible contractor not provide this information, you can still file the Form 1099-NEC to IRS with SS# or EIN field blank.  Then it becomes the issue between IRS and contractor.

Once you get all the needed information, you can fill in the forms.  It is better to use an online service to file the 1099-NEC especially if you have only a few eligible contractors.  You can also go to an office supply store to purchase a pack of 1099-NEC.  You cannot download forms from IRS website as the form that is mailed to IRS must be in red ink that cannot be duplicated from a standard printer.  You can hand write on the Form so just make sure all fields are filled in correctly.  Sounds complicated?  Remember we are here to help.

1860 Old Okeechobee Rd, Ste 506, West Palm Beach, FL 33409. Located in Oak Ridge Business Park (between Australian Ave and Florida Mango Rd)

New Year New Location Great Expectations

January 5, 2021

The year 2020 was challenging for us all.  As an accountant who serves small businesses here in South Florida, I witnessed businesses who struggled to survive via ordered shutdowns of their locations as well as businesses who grew during the year.  For me, my firm was able to grow as I had numerous business owners and individuals hire my firm to help them successfully navigate the various governmental aid programs.  My firm grew to the point where the timing was right for me to relocate my office to a larger space.  I have added a staff member to handle my now increased work assignments.

Let me take a moment and thank my former landlord at CitySide Suites for nine years of excellent service.  I started my business there and they accommodated my growth over this period.  I highly encourage any business owner seeking an affordable, convenient location to contact them.

My new office is still located in West Palm Beach.  So for my annual tax clients who will start seeing me later this month, I look forward to seeing you again at my new location.  Everything is fresh and new with individual offices for myself and staff.  We take every safety precaution to make your visit safe.  Of course for those who still prefer remote meetings, we are ready to accommodate that as well with Zoom and my secured client portal where documents can be safely uploaded.

I know a number of you enjoy my newsletter with the articles written by others discussing tax strategies and accounting topics.  This article will be the first of a series I will write to share my experiences and knowledge that will focus on similar topics I find interesting such as South Florida business trends or business challenges facing the black business owner.  I hope they will keep you informed and enlightened. 

We all look forward to a healthy and prosperous 2021.  My firm is ready to continue to provide excellent services for our long standing clients and welcome those business owners and individuals who feel their current accountant or tax preparer is not meeting their needs.  Initial visits are always free so thirty minutes of your time could be the beginning of a better service.

1860 Old Okeechobee Rd, Ste 506, West Palm Beach, FL 33409. Located in Oak Ridge Business Park (between Australian Ave and Florida Mango Rd)

NOL: For the Rich Only?

October 12, 2016

As an accountant I am fascinated when tax strategy is used as a political weapon.  The media introduced to many Americans the concept of Net Operating Loss (NOL) by showing how Donald Trump had a $916M loss in 1995.  The biggest fallout from this is he allegedly has not paid taxes for up to 18 years thereafter.  At the second Presidential debate, one of the moderators ask Mr. Trump if he used the NOL to reduce his taxes for the following years.  He responded that he did.  Despite the large amount, I am perplexed in how people can objectively expect Mr. Trump to not fully exercise his right to use all legal means to reduce his tax liability.  I know that this political season leads many to think that tax deductions like NOL is a strategy that only the rich can utilize.  But in reality many Americans who are not rich by any reasonable criteria fully utilize NOL.

NOL occurs when your business or investment has expenses that exceed the revenue in a calendar year.  A common occurrence is the first years of a new business especially when there are high setup cost like equipment purchases or merchandise inventory.  The loss that they experience can be used to offset future income so that the tax burden for them will occur when they have fully recoup their losses.  For example let assume we have two companies A & B.  Company A broke even each year of it first four years.  Because of that it does not pay taxes for any year.  Company B has losses of $100K in year 1, $50K in year 2, broke even in year 3, and profit of $150K in year four.  When you add these amounts up, Company B also has no accumulative profit (profit of $150K in year four is offset by combined losses of $150K).  Without the NOL provision, Company B would pay taxes in year four even though its accumulative profit is same as Company A who paid no taxes.

Certainly the rich utilize deductions and credits in amounts that may be mind blowing.  However with minimum exceptions these deductions are also used by many who are not rich.  In the case of NOL, many small business owners or investors need the time to recover their losses be it 1 year, 2 years, or even 18 years. To deny them this strategy would likely increase the number of business failures as they are not in a position to handle the additional expense of income taxes.  Mr. Trump has given many people reason to be angry with him – his use of NOL should not be one of them.

When is a Tax Refund Bad?

January 9, 2016

It is that time of the year in which tax professionals are trying to convince you that they are the best.  For many, they advertise that they will get you the biggest possible refund.  In other words, the measure of a good tax professional is how much money they can get for you.

My question to those who agree with this measurement of tax professionals is what is a refund and more important do really want it?  This may seem like silly questions but its answers shed light on the true understanding of refunds and effective tax planning.  A refund is a return of taxes paid throughout the year.  In other words it is like receiving change after a purchase at a store.  Do you want your change – absolutely.  When?  Immediately.  That is understandable.  Now what is your feeling if you have to wait for months for your change.  Yes you still want it but are you not upset that you had to wait for months to receive it?  Same logic but different feelings if you overpay a store versus IRS.

The best measure of a tax professional is whether he/she can provide you with the lowest effective tax rate.  By tax rate I mean the percentage of your taxable income that is owed in taxes.  The effective tax rate is total tax divided by taxable income.  Taxable income is gross income less tax deductions.  If your tax professional gets you to approve the proposed effective tax rate, then he/she has done a good job.  Whether this rate leads you to a refund is irrelevant.  You have a bill that must be paid.  If you already paid it in full, that is fine and you should receive your overpayment.  Otherwise, you need to make that final payment to settle this bill.

Tax planning is the process of working with a tax professional to get the lowest effective tax rate.  It is absolutely not to get a refund because to get a refund means you are intentionally overpaying the determined taxes.  This defeated the purpose of planning – anyone can send in too much money and get that back at a later date.  Tax planning is about keeping the most money in your own pocket.

It may be hard for some to believe but most business owners strive to owe a small amount when the tax return is filed.  This is the surest way of knowing you maximized the amount of money you maintain throughout the year.  When you look at taxes like any other bill, then this approach is completely consistent.  Now I ask you again – do you really want a refund?

Trouble for Tax Exempt Firms

December 7, 2015

The rules for proper compliance of tax exempt status can be confusing.  It is not uncommon for a small group of motivated persons to form a Board of Directors and prepare the application to IRS for tax exempt status.  Seeking to save money by not using a professional, they complete the application and quite often they receive the approval letter.  The mistake that is often made is that this is the beginning of a new set of compliance rules.

Here are some common mistakes or misconceptions made by Boards of Directors:

  • I did not know that I had to file an annual return.  An attorney who I used to work with when I was young in my career bluntly said – “ignorance is not an excuse.”  A tax exempt firm is a business and thus all of the norms for operating a business still apply.  Chief among them is to seek professional help from an accountant or attorney.  Plus it is written in numerous places including the acceptance letter that your firm has annual filing requirements.
  • I had little or no activity so I do not need to file.  While it is true that individuals who earn below certain income thresholds are not required to file a personal tax return, there is no such rule for companies be it profit-seeking or tax exempt.  Even if you had zero activity, you are required to file a return so fill out the heading properly, write a bunch of zeroes in the amount column, and sign.  The IRS has made it easy for the very small tax exempt firms by having a tax exempt e-postcard that can be filed from their website.  You have to answer a few simple questions and submit.
  • It is illegal to earn a profit with a tax exempt firm.  The goal of all businesses is to have revenue exceed expenses so the business can survive and grow.  It is virtually impossible to predict on a regular basis the amount of revenue needed to match your expenses.  Thus a tax exempt business can price its products or services to any level determined by the Board and/or marketplace.  Similarly a tax exempt firm should seek to operate efficiently by keeping expenses under control.  The difference between regular business and tax exempt is that the profits of a regular business can be distributed to the owners of the business for personal use.  A tax exempt firm must re-invest its surplus back into the business.  Board members can only be compensated via salary
  • A donor wants to make a large donation but want to see my financials first.  One of my common statements to my clients is that there is more than one audience to your financials.  Yes the IRS is one of them and taking the time and funds to pay an accountant to prepare the annual return is reason to avoid this with the e-postcard.  However, there could be donors or lenders who want to donate or lend to your firm but need to know the financial performance of the firm first.  It is at this point that the Board scrambles to find an accountant who can quickly prepare the full annual return.  Of course this type of search can lead to at minimum paying a premium to the accountant for a rush order to using an accountant who is not good and produces low quality annual return that hampers the donation or lending process.

Accountants and attorneys can offer solutions to problems you do not know that exist because you are not knowledge of the laws.  It is always best to learn them from us and not from a notice letter from IRS.

 

 

 

Don’t Forget about the Inventory

July 13, 2015

Inventory management is very important for product selling businesses.  As an accountant, it is important because it is part of the calculation of their single most important expense – cost of goods sold.  It is crucial that the business owner determines as accurately as possible the inventory on hand as of the end of the prior year and end of the month for the period being evaluated.  This should include all finished products.  For businesses that assemble their finished products, the inventory of the major components should be performed as well.  These amounts along with the purchases made throughout the year will determine the cost of goods sold.  For those interested, the formula is Beg Inv+ Purchases – End Inv = COGS.

Often a retailer in their first few years of business is focused on purchases with minimal regard to inventory.  Their belief is that if they control purchases, that is effective inventory management.  To a large extent that is true but it fails to effectively compare cost to the revenues from sales.  Just because you purchased an item does not always mean it was sold.  Inventory items can be lost, stolen, or unsold in addition to being sold.  By using the above formula the retailer factors in complete inventory activities throughout the year.

For clients who do not use sound inventory management practices, my firm often reveals that their inventory costs are much higher than they perceived.  The business owner may  argue that the actual amounts are much different than what they had thought.  We share with them that the cost of goods sold formula as the basis for our calculations.  While there is some back and forth, the end is usually the costs originally presented are very close to the amount ultimately approved by the owner.

If there is an upside it is that the higher cost leads to lower net income and thus lower taxable income on the corporate tax return.  The owner also start improving the inventory system by conducting physical inventory count and better monitoring of purchases.  Thus the next corporate tax return is a much smoother experience.

You Formed an LLC Last Year – Now What?

January 7, 2015

In 2014 thousands of Floridians took the first step of business ownership by forming an LLC or corporation. The year went by quickly and now it’s time for you to report its activities to the IRS. For many people, income tax preparation is fairly easy – wait until the end of January to receive all the tax forms. Go to a self-prepare tax software or your paid tax preparer, input these amounts by April 15 and bingo your taxes are done with the hope of a refund coming your way.

For new LLC members (owners of LLC are officially called members), there are more preparation steps needed. Especially if your business had activity in 2014, the first step to prepare the business tax return will require some bookkeeping skills. Just as the companies who issued W-2’s, 1099’s, etc. have bookkeepers who prepared these documents, you as business owner have the same responsibility. So the question is who performs this task.

Many new business owners have limited budgets so they decide initially to use accounting software like QuickBooks or Freshbooks to update their business activity. For those who are committed to routine updating, these tools are extremely helpful in preparing all business tax forms. The key phrase though is “routine updating.” Especially if you have little or no bookkeeping training, routine means at least weekly. Even if you use an automatic download from your bank or credit card website, a weekly review that the inputs are correct is needed.

So here we are at January and the moment of truth has arrived. Were you routinely updating your files? If you are like many business owners (let’s call them future clients), you have hundreds of things to do for your new business so updating your books is just low on the priority list (or more accurately said, it is an activity you hate doing and delayed it for as long as you can). For most, you now need to hire an accountant. How do you do that? Check out my earlier blog answering this question To Pay or Not to Pay? Once you select your accountant, you need to provide them the following:
• If available, access to the accounting software you used regardless of how little you used it. Unless it is a total mess, updating this could be less time consuming for accountant and thus lowering your fee.
• Copies of your bank statements and credit card statements. A better option is to give view only access to bank or credit card website. You’d be surprised how many follow up questions this eliminates.
• All tax documents notably 1099’s with business as payee.

Without question, the biggest mistake new business owners make is to assume that the filing deadline of April 15 applies to your business. For single member LLC’s, it is probable but not always. Even if it is the deadline, there are other filing deadlines that are important. Most notably are 1099-MISC to be issued to qualified vendors you paid in 2014 and W-2’s to your employees. These documents are due January 31 so tick tock, the first big deadline is fast approaching. The other filing deadline of importance is March 15 as that is the filing deadline for corporations and certain LLC’s. Again, not going in depth of the differences here but just understand there are different deadlines for LLC’s.

Remember that the IRS does not accept ignorance of the rules as an excuse. So it is best to get help now or possibly face the wrath of IRS later – alone!

How to Select the Best Merchant Services for your Small Business

February 11, 2014
BottomLine Pros LLC
Phone: (888) 315-2590

sherry@blpllc.com
If you want to start your own small business, it is mandatory to identify the very best merchant services for your company. After all, with so many tempting options at hand, who wouldn’t be confused and indecisive?

It might be hard for you to make an informed decision, especially since you’d have to analyze a plentitude of offers launched by different service providers.

This is why it is important to evaluate every single service based on its very own list of pros and cons. You might be wondering: based on what selection criteria should I identify the perfect merchant services, tailored to my needs, demands and financial possibilities?

Keep reading to discover the most accurate answer to your question.

Financial Savings
Did you know that excellent merchant services brought to you by respectable providers can trigger considerable financial services?

According to recent estimates, such a service could easily help you save up to $173 on an annual basis.

This may not be much, but it’s still a significant amount of money that stays in your pockets, year after year, and enables you to invest in work-related projects that could supplement your income.

Transaction Fees
Obviously, you’ll want to profit from an excellent merchant service, allowing you to make the most of the lowest transaction fees.

Your main goal is to spot and benefit from a payment service well-liked for its minimal transaction fees, when a card is present and when it’s not.

Features
If you have very little experience with financial transactions and still want to find a way to receive payments in a timely manner, opt for simple, comprehensive, highly convenient merchant services designed to support your most ambitious goals.

Go in favor of a service allowing you to profit from a generous selection of features, implemented to simplify your life and help you build a solid relationship with your clients and with all your service providers in no time.

Merchant account, recurring billing, online invoicing, virtual terminal and payment gateway are some of the most common features displayed by respectable merchant services worth considering, if you plan to open a small business in the near future.

Accepted Credit Cards
Undoubtedly, the best merchant services accept numerous types of credit and debit cards.

Including Visa, MasterCard, Discover and American Express, enabling you to profit from timely, 100% secure financial transactions and increase your client database.

Customer Support
It’s no secret that most business owners who are not Internet savvy are having a hard time trying to spot the best payment solution allowing them to run a thriving business in the long term.

After all, with so many tempting options at hand, who wouldn’t be confused and indecisive? Opt for a service provider offering you flawless customer support and addressing all your needs and concerns in a timely manner.

Fraud Protection
If you want to run a flourishing business for many years to come, you have to choose wisely when it comes to selecting the best merchant services.

With so many online scams impacting the profitability of numerous business owners worldwide, it is recommended you go in favor of merchant services guaranteeing increased fraud protection with address verification, CVV2 (Card Verification Value), Security Socket Layer (SSL) and Real-Time Processing.

One thing’s for sure: cash-only transactions will never manage to help you grow a thriving company in the long term. You will definitely need to promote your products to a larger audience and make more prospects want to invest in your products and services.

If you want this to happen, your business has to accept credit cards; thus you have to make the most of truly convenient merchant services meeting and even exceeding your highest expectations.

1099-MISC – What is it Really?

February 10, 2014

Arguably the most misunderstood year end responsibility for the new business owner is the issuing of 1099-MISC forms.  Most people understand W-2 forms given to employees largely because nearly everyone at one point in their careers has received it and subsequently used it to prepare their individual tax returns.  However, many people have not received a 1099-MISC even if they have run a business for years.  This is because often times the payer (customer) has no incentive to issue the form.  For example, a homeowner who pays a person to mow their lawn should issue a 1099-MISC to the lawn maintenance person but likely will not because the expenditure is not a tax deduction to the homeowner.

A business owner is very different in that nearly all expenditures made for the business is a tax deduction.  So the business owner has a very large incentive to prepare a 1099-MISC.  To begin, let’s discuss the basics of 1099-MISC.

  • ·         Any individual or small corporation who is paid at least $600 for services (not a product) in a calendar year is to be issued a 1099-MISC form.  Large corporations (for simplicity sake, a company with at least hundreds of owners/shareholders or millions in revenue) are excluded.
  • ·         All recipients of 1099-MISC should receive their forms no later than January 31 of the following year.
  • ·         The IRS should receive it copy of the 1099-MISC and Form 1096 (a summation of all 1099 issued) by February 28 of the following year.

The reason for issuing the 1099-MISC is because the IRS reserves the right to disallow any expenditures to an eligible vendor if not issued a 1099-MISC.  This is the most misunderstood fact regarding 1099-MISC.  It does not benefit the recipient nearly as much as the issuer.  Put crudely, the IRS wants to know to whom they can expect taxable income since you are claiming the tax deduction.

The business owner who has reasonable record keeping can fairly easily prepare 1099-MISC.  The only information needed is name, address, social security or employer identification number, and amount paid.  You can exclude any cost reimbursements from the total.  A W-9 form should be provided to the vendor once they advance beyond the $600 threshold.  This only needs to be done once as SS# or EIN do not change (of course address should be updated accordingly).

While forms are available on the internet, the form that must be submitted to IRS are specific and must be purchased online or at office supplies stores.  If you do not use accounting software like QuickBooks or Peachtree, it is recommended that you purchase tax form software that can accompany the tax forms.

It is always wise for the business owner to hire an accountant to take care of this function.  It is usually a small one time fee by the accountant for a client who has a regular relationship with the accountant.  Some payroll companies also offer this feature.  Regardless of who performs this function, the main point is that not doing it leaves the business owner open to a long term problem with the tax deductions they are claiming on their business tax returns.

It’s 2014: Do You Know Where All Your Retirement Savings Are?

January 13, 2014

Courtesy of: Chuck West

Morgan Stanley Wealth Management,  Delray Beach, FL

Phone Number: 561-243-2230

Web Address: http://www.morganstanleyfa/Charles.West

The case for consolidating your retirement accounts only grows more compelling over time.

A Traditional IRA here, a rollover IRA there, four job changes (so far!) and three retirement plan account balances left in the plans of former employers…

If this describes your situation, you are not alone.  Over the years, people accumulate a significant sum in retirement savings, often spread across various accounts.  As accounts multiply and companies change ownership, it can become difficult to keep track of exactly how much you have saved toward retirement and how those funds are invested. You may also find it challenging to determine your distribution requirements on various accounts once you turn 70 ½.

Consolidating accounts can help you make sure your savings are invested appropriately for your overall goals, track the performance of your holdings and, in many cases, discover more investment choices and incur lower fees.

With retirement savings in just a few accounts, it becomes far simpler to execute your strategy and to measure your progress.

Why Consolidate? Streamlining the account structure of your retirement savings has many potential benefits.

Comprehensive investment strategy. Over time, your investment objectives and risk tolerance may have changed. Thus, it can be difficult to maintain an effective retirement investment strategy—one that accurately reflects your current goals, timing and risk tolerance—when your savings are spread over multiple accounts. Once you begin the consolidation process, you can strategize investments to match your current goals and objectives.

Greater investment flexibility: Often, 401(k) plans, other employer-sponsored retirement programs and even many IRAs have limited investment menus. A Morgan Stanley self-directed IRA can offer you the ability to choose from a wide range of investments including stocks, bonds, mutual funds, managed accounts and more.

Simplified tracking: It is easier to monitor your progress and investment results when all your retirement savings are in one place.

Less paper: By consolidating your accounts, you will receive one statement instead of several. That simplifies your life while protecting the environment.

Lower costs: Reducing the number of accounts may result in fewer account fees and other investment charges.

Clear required minimum distributions (RMDs): Once you reach age 70½, having fewer retirement accounts to manage can mean having fewer RMD requirements to follow.

Comprehensive knowledge of your assets. If your employer-sponsored retirement plan is terminated or abandoned (an “orphan plan”) or is merged with or transferred to a retirement plan of another corporation after you leave, it may be difficult to locate the plan administrator to request a distribution of your benefits or to change investments. By contrast, assets in an IRA are

always accessible if you want to change your investment strategy or need to take a distribution.

What Can Be Consolidated?  Listed below are types of retirement accounts eligible for consolidation.

•             IRAs held at financial institutions (banks, credit unions, mutual fund companies, etc.).

•             Retirement plan assets held at former employers including:

             401(k) plans

             profit-sharing plans

             money purchase plans

             defined benefit plans

             Keogh plans

             ESOPs

             government 457(b) plans

             403(b) plans

How it works. There are several ways to combine retirement assets into a single account.

•             IRA-to-IRA transfers: Ask the IRA custodian where you will be establishing your account to help you complete their IRA transfer paperwork. Once you’ve set up your IRA, the custodian will do the rest, including contacting your previous IRA custodian(s) to get your assets moved over. There’s no limit on the number of IRA-to-IRA transfers that you can complete in any given year. (However, please note that a Roth IRA can be consolidated only with another Roth IRA.)

Knowing how rollovers work can help you make a decision about whether or not to consolidate.

•             IRA-to-IRA rollovers: You can ask your current IRA custodian to send you a check for the amount held in your IRA. You will then have 60 days to deposit the funds into another IRA without incurring any current tax liability. Note that your former IRA custodian will report the amount as a distribution on IRS Tax Form 1099-R; your new IRA custodian will report the rollover contribution on IRS Tax Form 5498. If you miss the 60-day time period, taxes and penalties may apply. IRA-to- IRA rollovers are restricted to one every 365 days per IRA.

•             Direct rollover from qualified plan to an IRA: Ask your previous employer(s) about the paperwork needed to complete a direct rollover of your qualified retirement plan assets to your IRA. The assets will be transferred once you complete the paperwork. Note that your former employer’s plan will report the amount as a distribution on IRS Tax Form 1099-R; the IRA custodian will report the rollover contribution on IRS Tax Form 5498.  There are special rules involved in transferring a “pre-tax” retirement plan balance to a Roth IRA—talk with your tax advisor about the impact this may have on you.

•             Indirect rollover from qualified plan to an IRA: Like the IRA-to-IRA rollover, you can ask your previous employer(s) to send you a check for your vested plan balance and then redeposit those funds into an IRA or other qualified retirement plan within 60 days. However, the plan trustee will be required to withhold 20% of the taxable portion of the distribution as mandatory federal withholding. You will need to make up that 20% when you redeposit the funds into an IRA or the amount withheld will be subject to taxes and possibly penalties if you are under age 59½.

Speak with your tax advisor about these and other rules that may apply when consolidating retirement plan assets.

When You Might Not Want to Consolidate.  Notwithstanding the many benefits to consolidating your retirement accounts, there are some caveats to keep in mind. For example, while many qualified plans allow for loans, you cannot take a loan from an IRA. Thus, once you roll over a qualified plan into an IRA, the ability to take a loan is no longer available.  However, once you leave the company you may not be able to take a loan out anyway, since few qualified plans allow loans to be taken out by former employees.

Another consideration is RMDs. Upon reaching age 70½, owners of a Traditional IRA must begin taking required minimum distributions or face stiff IRS penalties. If the plan permits, qualified plan participants can delay taking required minimum distributions after attaining age 70 ½ if they are still working.

A final consideration may be employer stock. Employer (and former) employer stock held in a qualified retirement plan may be eligible for special tax treatment on distributions (known as “net unrealized appreciation” or “NUA”) that you lose if you roll over the stock to an IRA.  Check with your plan administrator and your tax advisor on whether or not the NUA rules may apply to you.

Generally speaking, simplifying your retirement account structure can help you take control of your financial future.  Your tax and financial advisors will be able to assist you in determining if consolidation makes sense given your specific circumstances and goals.

Don’t wait.  Your actions now can greatly affect your quality of life in retirement, whether it is years away or just around the corner.

Consolidate Your Retirement Savings and Qualify To Have the Annual Maintenance Fee  Waived for the Life of the Account

If you transfer, roll over or add $100,000 or more to an IRA at Morgan Stanley during 2014 we will waive your annual maintenance fee for the life of the account.¹    Please note fees for other services such as account closing/transfer fees, fees associated with the investments in the account such as a fund’s internal fees and expenses, brokerage commissions or managed account fees may apply.

¹The following IRA account types are eligible for the fee waiver offer:  Traditional, Roth, Rollover, SEP, SIMPLE and SAR-SEP; the $100,000 addition to the IRA can be a combination of any of the following:  IRA contribution (subject to IRS rules on eligibility to contribute to an IRA), rollover from another non-Morgan Stanley IRA or qualified retirement plan, e.g., 401(k) or a transfer from another non-Morgan Stanley IRA. There is no annual maintenance fee if you keep a minimum of $100,000 in the account for at least one year. The maintenance fee waiver offer is limited to one lifetime annual account maintenance fee waiver per Social Security Number listed on the account documentation.  Assets must remain in the account for one year from the date of deposit to qualify for the maintenance fee waiver.  Redeposit of a prior IRA distribution does not qualify.  The fee waiver will occur at the anniversary billing date following funding. Currently, a Low Balance Household Fee of $50 per calendar quarter will be charged to households with less than $25,000 in Eligible Assets and Liabilities subject to the householding rules applicable to your account(s).  In the event that your total household assets fall below the $25,000 level anytime in the future, this fee may be assessed even though the IRA annual maintenance fee will be waived on your eligibility for the IRA fee waiver program. Please contact your Financial Advisor or Private Wealth Advisor for more information.

By law, some IRAs may not be consolidated.  Clients should consult their personal legal advisor.