Hello There!,

As we approach the final quarter of the year, the Mashburn Memo for Small Businesses will continue to include helpful articles and resources to help you prepare for your 2023 tax return. This issue includes two articles related to your employees, emergency savings accounts and the trust fund recovery penalty.

As always, the Mashburn CPA team is here to be of assistance to you and your business. Contact us when we can be of service. 

Thank you.

Paul Mashburn, CPA

Should You Offer Employees Emergency Savings Accounts?

The SECURE 2.0 law, which was enacted last year, contains wide-ranging changes to retirement plans. One provision in the law is that eligible employers will soon be able to offer employees emergency savings accounts. This will be done through what the law calls “pension-linked emergency savings accounts.”

Effective for plan years beginning January 1, 2024, SECURE 2.0 permits a plan sponsor to amend its 401(k), 403(b) or government 457(b) plan to offer emergency savings accounts that are connected to the plan.

Read our blog post for the basic distribution rules and whether offering emergency savings accounts is right for your company

Learn more

The Trust Fund Recovery Penalty

If you own or manage a business with employees, there’s a harsh tax penalty that you could be at risk for paying personally. The Trust Fund Recovery Penalty (TFRP) applies to Social Security and income taxes that are withheld by a business from its employees’ wages.

The TFRP is dangerous because it applies to a broad range of actions and to a wide range of people involved in a business.

Read our blog post for answers to important questions about the TFRP penalty.

Read more