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Retirement Savings Contributions Credit (Saver’s Tax Credit)

Employers and plan sponsors can give their low- and moderate-wage workers some good news by informing them of the Saver’s Credit. This federal income tax credit was made permanent in the Pension Protection Act of 2006. To be eligible, a person must: be 18 years of age or older not be a full-time student not be claimed as a dependent on someone else’s return make contributions to a qualified IRA, 401(k) or other eligible retirement plan meet certain financial criteria, as described below Depending on adjusted gross income, a participant may receive a tax credit equal to 10, 20 or 50%...

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Finding the Funds to Pay for a College Education

Finding the funds to pay for your child's college education is like filling a test tube. The length of the tube represents the cost of education at any one school--tuition, fees, books, room and board, transportation, and personal expenses. The first ingredient is what you'll have to contribute from your own pocket: the expected family contribution (EFC), which is determined by the federal government's financial aid formula. This can come from savings and/or loans. Your EFC is the same regardless of the college your child chooses. The difference between your EFC and the cost of a particular college equals your child's financial...

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Positioning Your Income and Assets to Enhance Financial Aid Eligibility

There are a number of strategies you can implement to try to enhance the amount of federal financial aid your child receives. These strategies take advantage of the federal rules about which family income and assets are counted in determining your family's expected family contribution (EFC). Note:  The FAFSA relies on current asset information but income information from two years prior, which is referred to as the "base year" (e.g., the 2018/19 FAFSA relies on your 2016 tax return; 2016 is the base year). Strategies to reduce income Time the receipt of discretionary income to avoid the base year Pay all federal...

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ABCs of Financial Aid

These days, it's hard to talk about college without mentioning financial aid. Yet this pairing isn't a marriage of love, but one of necessity. In many cases, financial aid may be the deciding factor in whether your child attends the college of his or her choice, or even attends college at all. That's why it's important to develop a basic understanding of financial aid before your child applies to college. Here are some basics to help you get started. What is financial aid? Financial aid is money distributed primarily by the federal government and colleges in the form of loans, grants, scholarships,...

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The State of the Union Address and the Employee Benefits Market

On Tuesday, Feb. 5, 2019, President Donald Trump delivered the 2019 State of the Union Address (SOTU). The SOTU is an annual message delivered by the president to a joint session of Congress at the beginning of each year. At this year’s SOTU, President Trump discussed issues that have the potential to impact the employee benefits industry, including pre-existing conditions, lower prescription drug prices and nationwide paid family leave. Pre-existing Condition Protection In a departure from 2018 Department of Justice actions, President Trump announced in the address that people who have pre-existing conditions should receive protections. If the administration holds true to...

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February Also Means Financial Aid Awareness

The higher-education community celebrates Financial Aid Awareness Month throughout the month of February. For many students and families, filing the FAFSA (the Free Application for Federal Student Aid) and the CSS Profile (the Common Private College Aid Application) is a daunting task. We offer a variety of materials that you can use to learn about financial aid, including the filing process, how income and assets are counted, and how colleges use the information to determine aid eligibility. Let a member of our team know if we can help with your overall financial planning by calling 804-285-5700 or emailing us at wealth@simafinancialgroup.com....

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February is for Fiduciaries!

Working together to help you achieve your financial goals is incredibly rewarding. Here at SIMA, we take our responsibilities to adhere to the highest standards of ethical and professional conduct very seriously, which is why we are proud to be an Accredited Investment Fiduciary® Designee. The AIF® Designation is more than just an acronym. It’s a symbol that we will always put your best interests first. Feb. 28 is National Fiduciary Day, which was established to acknowledge the importance of fiduciary excellence in our industry. In honor of this celebration, we am taking the opportunity to simply say thank you for...

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Calculating OT? Double-Check Your Math

Overtime, or OT, is typically calculated by multiplying an employee's hourly rate by 1.5--pretty easy, right? It depends who checks your math. The Department of Labor (DOL) recently published an opinion letter on pay rates, as they relate to calculating OT. According to the letter, you can vary employees' average hourly rates from week to week--assuming the average hourly pay is always above the Fair Labor Standards Act's minimum wage threshold. However, employers using this method should be cautious when determining OT pay. The DOL specified that a company may not "arbitrarily choose the regular rate of pay" on which to...

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Deadlines to Furnish Forms 1095-C and 1095-B to Employees Fast Approaching

The IRS deadlines to furnish Forms 1095-C and 1095-B to employees in early 2019 are fast approaching. The deadlines are as follows: Employers with 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-C to all full-time employees no later than March 4, 2019. Self-insured employers with fewer than 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-B to all responsible individuals--typically the primary insured, an employee or former employee, or other related person named on the application for insurance--no later than March 4, 2019. The deadline for employers to...

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