Offer Deferred Compensation?
Be Careful About Compliance
enacted Section 409A of the Internal Revenue Code more than 10
years ago in response to scandals involving Enron and other
If you offer employees deferred compensation as a benefit,
it's critical to stay familiar with Sec. 409A and its many
Sec. 409A applies to most nonqualified deferred compensation
arrangements, including bonus plans, supplemental executive
retirement plans, certain severance pay plans, and
equity-based incentive compensation plans — such as stock
options, stock appreciation rights (SARs) and phantom stock.
The requirements don't apply to qualified retirement plans,
such as 401(k) plans. They also don't apply to most welfare
benefit plans - for example, vacation, sick leave,
compensatory time, disability and death benefit plans.
For covered arrangements, Sec. 409A governs the timing of
deferral elections and restricts the ability of participants
to alter the form or timing of the payments. The law and
regulations in this area are complex, but here's a quick
summary of the main requirements:
Employees must make deferral elections before the beginning of
the year in which they earn the compensation being deferred
(except for certain performance-based compensation).
Benefits must be paid either: 1) on a specified date, 2)
according to a fixed payment schedule, or 3) upon the
occurrence of a specified event, such as death, disability,
termination of employment, change in ownership or control of
the employer, or an unforeseeable emergency.
409A prohibits plans under which the CEO or board of directors
has discretion over the timing or form of payment of vested
compensation is deferred, payments can be delayed (by five
years or more) but not accelerated. Elections to delay
benefits (or change the form of payment) must be made at least
12 months in advance.
In addition, employers must maintain written plan
documentation that's consistent with Sec. 409A's requirements.
It's important to review your deferred compensation
arrangement for Sec. 409A compliance regularly. Please call us
for help evaluating your plan's documentation and operations. Call us at
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
that impact our clients investments and their portfolios.
We always offered our opinion and suggestions but in order to
help our clients actually execute the changes we suggest,
SMEED has created a Financial Services division.
SMEED Financial Services, Inc. will be able to
work with both individual and business clients on their
investment portfolios and manage assets on their behalf.
SMEED Financial will include Michael Uadiale,
ACA, CPA, CGMA; and Pablo Blanco who has
recently joined SMEED and comes with over 18 years of
financial sales and advising experience with affluent
Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
SMEED CPA Inc. We’ve just installed a toll-free
number that I would like for you to call and tell me how you
think we are doing as your CPA firm.
Just dial 800-609-9006
extension 3638 and follow the instructions. If we’ve
done a good job please let me know. And if we can
improve on anything, please mention that too.
Us Be Found on
Also as we expand our business,
we find more and more people are using
YELP and Google
to look for us by searching Brentwood accountant or
When they do this we want to
be FOUND on GOOGLE. One way you can help us
is to give us an
ONLINE REVIEW on our Google Maps/Places listing --->
or on our YELP local listing
click here to go to our Google Listing for SMEED CPA and
click on the
YELP link to go there.
Scroll down to the Review area.
On either site it may say: Been here?
Rate and review
You will click on the Rate and
review link and then log in, then
give us a review!
You can choose between 1 and 5
STARS and write in what you think about the tax or accounting
work we have done for you.
It's that simple. Thank
you in advance for your help and cooperation!
As always you can call our offices if you have any
questions about these or any other accounting related issues, at
Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,