Tax-favored savings accounts help drive wellness program engagement

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Three Ways to Give Energy Savings the Green Light in Your Home

    FORT MILL, SC, August 03, 2013 /24-7PressRelease/ -- "Red means stop, green means go" - we learn that axiom as children. When it comes to home energy costs, however, going green can help homeowners put a stop to runaway utility bills. And maximizing your home's use of natural light - call it "green lighting" - is a great way to boost your home's energy efficiency.

Here are three ways you can put Mother Nature to work, and use natural light to lower your energy costs:

Minimize use of artificial lighting
Anyone who's ever paid an electrical bill knows that the simple act of turning on a light can directly impact your monthly expenses. Homeowners looking for a long-term way to power down their lighting costs may consider Energy Star-qualified skylights (link: http://www.veluxusa.com) a good investment. While the cosmetic appeal of skylights can't be argued, their value goes far beyond good looks.

By admitting healthful natural light into your home, skylights can help reduce the use of artificial light sources - and help you save on electricity costs. Pair no leak solar powered fresh air skylights, that have automatic rain sensors, with efficiency-enhancing accessories like solar powered designer blinds (available in a varied palette of colors and patterns), and you can improve energy efficiency as much as 37 percent, according to skylight manufacturer Velux America (www.veluxusa.com).

And you don't just save on energy over the long haul; there's an immediate incentive. Both the solar powered skylights and blinds, as well as the installation costs, are eligible for a 30 percent federal tax credit. See a tax calculator at the Velux web site that tells you how much you can save on a new installation or a replacement. There's also a skylight planner app there that will show you exactly how different skylight and blind combinations will look in your own home.

Got a hard-to-reach or smaller space in your home that needs additional natural light? With tubular skylights like Sun Tunnel products, you can even bring natural light into ground-floor rooms or spots where a traditional skylight may not work, such as a first-floor powder room, hallways, or walk-in closets.

Reduce hot water costs
Long gone are the days when solar powering your home was an idealistic, but impractical dream. Solar technology is more useful, accessible and cost-effective than ever. Solar water heating systems, with low-profile rooftop collectors, have become mainstream, and offer homeowners a great, green way to trim energy costs. What's more, the cost of installing these systems has been steadily declining as the technology advances, and you may find adding one makes you eligible for tax credits or incentives from your local, state or the federal governments. You can calculate the costs and possible paybacks online at www.solar.veluxusa.com.

Make home a healthier place
Every year, ill health costs the U.S. economy billions of dollars, experts say, and your own health woes can have a significant impact on your pocketbook. The health benefits of natural light are well documented, from reducing the symptoms of Seasonal Affective Disorder (SAD) and promoting the body's production of Vitamin D, to improving mood and even learning ability.

Simply opening blinds and curtains to admit more natural light can directly affect the mood inside your home - not to mention the mental state of the people living in it. Take your green lighting efforts to a higher level by adding no leak solar powered fresh air skylights and solar powered blinds, and you can also help improve the air quality inside your home. While skylights admit ample natural light, their natural chimney or stack effect works with your windows to bring in and circulate much more healthful fresh air. They also passively vent fumes and dampness that can lead to mold and mildew.

By incorporating natural light and passive ventilation into their home decor and improvements, homeowners can put the brakes on rising utility costs - and give the green light to energy savings.

Media Contact:
Keith Hobbs - Business Services Associates, Inc. - 9413 Greenfield Drive -
Raleigh, NC 27615-2306 - Phone - 919.844.0064 - E-mail - khobbs@nc.rr.com

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Retirement Savings Credit Doubles Payoff

Contributors to retirement plans already know the long-term tax advantages of an individual retirement account or 401(k). Taxes are deferred, and in some cases never collected, on money put away for the golden years.

Now a tax credit will let some savers reap the rewards of their retirement thrift early.

The retirement savings contributions credit, also called the saver's credit, appears on Form 1040 and Form 1040A tax returns as a way to reward lower-wage earners who sock away retirement money.

Because the tax break is a credit instead of a deduction, it's a better deal. Tax deductions reduce taxable income, but credits come into play after you calculate how much tax you owe, and they reduce your Internal Revenue Service bill dollar for dollar. For example, if you owe $500 and you are eligible for a $250 credit, the check you have to write to Uncle Sam is cut in half.

Income limits

A filer eligible for the saver's credit could shave as much as $1,000 off his or her tax bill. The actual credit amount depends on your income, filing status and just how much you put into retirement plans.

Basically, the lower your income, the bigger your credit. The income limits that determine how large a credit you can claim are adjusted annually to keep pace with inflation. The precise credit percentages for 2012 filings are found in the table below.

As the table shows, the maximum available credit is 50 percent of contributions for filers in the lower end of the earnings ranges. There is, however, a limit on the retirement plan contribution amount you can use to figure the tax break.

Although tax law allowed you to put up to $5,000 in 2012 ($6,000 if you're age 50 or older) in your IRA, only $2,000 of that will count in figuring the saver's credit. That makes it worth at most $1,000 for single taxpayers. Of course, if you're married and you and your spouse put away at least $2,000 toward retirement, your joint return would reflect a $2,000 credit.

Which contributions count?

Contributions to traditional and Roth IRAs as well as to employer-sponsored 401(k) plans count toward computing the credit. So does money you put into a savings incentive match plan for employees, or Simple, plan; a 403(b) program; a governmental 457 plan; or a salary reduction simplified employee pension, or SEP. You can only count the money you put in your workplace account, not any matching amounts your company contributed.

The credit is based on your total contributions to all your eligible retirement accounts, not for contributions to each. So if you put $2,000 into a Roth and another $2,000 into your 401(k) at work, you still can only calculate your credit on the allowable maximum of $2,000.

Enter all your retirement saving amounts on Form 8880, Credit for Qualified Retirement Savings Contributions, and complete the form to arrive at your exact credit rate and amount. Once you get the dollar amount, transfer it to line 50 of your 1040 or line 32 if you file the 1040A. The credit isn't available for 1040EZ filers, so you might want to consider changing your choice of returns if you've been putting away retirement cash.

If your IRA contribution is to a traditional account, you may be able to get a double tax break. In addition to the saver's credit, look into whether you're eligible to deduct your IRA contributions on the front page of your 1040 or 1040A. This tax break is one of several adjustments to income that are available to all taxpayers, regardless of whether they are itemizing or taking the standard deduction, and the IRS says you can claim the retirement savings credit and deduction for your IRA contributions.

The credit also is attractive to workers who are eligible to participate in a 401(k) plan but who earn just more than one of the saver's credit income limits. By signing up for a company-sponsored account, such workers could get under the earnings cap while simultaneously boosting the potential credit amount.

Take, for example, a married employee who is the sole earner in her family and who reports adjusted gross income of $35,000 on her joint tax return. She's already eligible for a partial credit, but if she contributes $2,000 to her 401(k), she will knock her income down enough to take the maximum credit.

Some other restrictions apply

In addition to the income limits, there are a few other restrictions on who can claim the saver's credit. A taxpayer who was younger than 18 last year, a full-time student or claimed as a dependent on another's tax return can't take the retirement savings break.

The saver's credit is also what the IRS calls nonrefundable. That means you can use it to reduce your tax bill to zero, but you can't take advantage of any excess credit amount to get a refund. So if you owe no taxes, the credit is of no use to you.

Still, even if you can't take full advantage of the credit, it's not too shabby of a break when you take into account the additional tax savings you get by contributing to a retirement account in the first place.

Just remember, the key to this credit is participation in retirement accounts. If you haven't opened a retirement account yet, or have one but haven't contributed for the 2012 tax year, you have until the April tax-filing deadline to open one and put in money. The deadline is the same for either a Roth or traditional IRA.

As for your 401(k), you're locked into your credit for the 2012 tax year based on the contributions you made last year. Make sure the W-2 you got from your company reflects the correct amount of all your pension contributions so you can get the maximum credit.

If you're not yet participating in your company plan, you can improve your future saver's credit potential by signing up as soon as you're eligible. Then contribute as much as you can afford without doing major cash-flow damage to your paycheck. It could pay off at tax-filing time as well as when you retire.

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ACC Value Champions Offer Tips for Legal Savings

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ACC Value Champions Offer Tips for Legal Savings

The prevailing wisdom among the Association of Corporate Counsel’s newest class of Value Champions is that hourly billing for legal services is dead, technology is on the rise, and predictability is a priority. Among the 2013 champs are Bank of America, Office Depot Inc., and Nike Inc.

The annual competition is a component of ACC's ongoing Value Challenge, which the organization created to recognize law departments and law firms that have cut legal costs without cutting quality. This year’s honorees include eight law departments and four law department/law firm collaborations that made noteworthy use of value-focused approaches to legal management.

A common trend among the honorees was realizing savings by ratcheting up reliance on alternative fee arrangements, although Catherine Moynihan, the ACC’s director of legal management, suggested “value-based fees” is a more apt term.

“We try to not marginalize them by calling them alternative fee arrangements,” she said.

Representatives from the 2013 champs said that billing by quality of work, rather than by time spent on a project, has been better for legal departments and outside counsel alike. Since 2011, Healthcare Insurance Reciprocal of Canada (HIROC) and its outside legal counsel, Borden Ladner Gervais, have foregone hourly compensation for a model in which compensation comprises a base fee, plus a performance fee determined by a number of “value criteria,” like process management, responsiveness, predictable costs, and final results. The team was honored by ACC for achieving predictability and pay for performance in a long-term client/firm arrangement.

The partnership’s process for dealing with malpractice claims demonstrates how the new fee system creates value. HIROC anticipates the number of malpractice claims they’re likely to see in a given time frame and the severity of those claims, based on past data. Then they look at past invoices and data from BRG to assess a fair fee. Michael Boyce, the claims vice president at HIROC, said the system works especially well because the firm and company have worked together for 25 years and trust each other.

“We have been very forthright in giving them our numbers, and they have been in turn forthright in giving us the number of hours and type of work that has been done,” Boyce said. And BRG is happy with the new arrangement. “The incentive is to spend less time rather than more time,” said BLG partner John Morris of the new model. “If we do it efficiently and well, we get more money.”

Bank of America has also successfully increased its use of alternative fee arrangements, said Lani Quarmby, the bank’s associate general counsel and senior vice president. The bank now uses AFAs for 80 percent of litigation matters. The move to a more detail-oriented, communication-heavy billing model has helped BoA to streamline the number of firms it uses, from using more than 700 law firms in 2010 to only 30 today.

Like Boyce, Quarmby noted that new fee arrangements were better for both in-house clients and their outside law firms because it requires closer relationships.

“It’s definitely improved communication between in-house and outside counsel,” she said.

“The biggest myth out there is that companies are looking for fixed fees to reduce spending,” said Michael Caplan, chief operating officer of the office of general counsel at Marsh & McClellan Companies. Marsh & McClellan reduced outside legal spending by 54 percent in four years, but Caplan said the company isn’t trying to skimp on legal services. “We’re looking to better understand what the matter is about,” he said. He added that they regularly give bonuses to firms that meet set goals.

Several of the Value Champions agreed that ensuring pricing predictability is key to efficient legal departments. Elisa Garcia, general counsel at Office Depot, said she worked “to build a crystal ball for the business units so they could project legal costs.” More than half of outside counsel spending for Office Depot now operates on value-based fees, and the company has reduced its legal spend by 30 percent.

And the key to predictability is technology, said Lucy Fato, deputy general counsel at Marsh & McLennan. Her company achieved success with the help of Sky Analytics, a vendor that benchmarks company spending with that of its peers.

“Being able to collect data and starting to have metrics and setting goals for ourselves . . . made a big difference,” she said.

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