Archive for the ‘Accounting’ Category

UMSL Tutoring and Lab Services For Business Students  

By: Chris Copithorne

The University of Missouri – St. Louis (UMSL) offers business students different types of resources to ensure student success. One of the best features they offer is tutoring programs and labs for students from all business-related majors. Specifically, these majors include: Accounting, Finance, Supply Chain and Analytics, and Information Systems. There is also a Writing Center and a Math Academic Center available, both located in 222 SSB.


Math and Writing Centers are probably the most well-known by students, but many other fields are just as valuable and should be taken advantage of by business students. For instance, the Finance Lab for Bloomberg Terminal Use is something every student should get themselves familiar with. It is a new feature offered to business students on the first floor of the new business building – Anheuser Bush Hall. Bloomberg Terminal is a software which helps monitor financial data in real-time. This resource offers the opportunity for real-world experience, especially for those who plan to pursue a career in finance.

Tutoring outlets and resources meet the dynamic needs of business students studying in a variety of fields at the undergraduate and graduate level. For instance, an undergraduate business student working on pre-requisite courses in Economics could take advantage of the Economics Resource Center (ERC) located in 452 SSB. Moreover, students can improve their understanding in other technical disciplines like: Mathematics/Writing (222 SSB), Accounting (006 ABH), Management Information Systems (200 ESH), and Supply Chain (002 ABH) in their respective tutoring Centers. All of these tutoring services function on a walk-in basis, but the writing center does require an appointment to receive assistance. This is due to the ambiguous time requirements which is necessary to accurately review, evaluate, and guide a student on a writing assignment. For additional information concerning hours of operation for Tutoring services in Business, please click here.   

Conversely, if you have the ability to help others in these subjects, you can become a tutor. Oftentimes these boast a high degree of flexibility regarding the tutor’s class schedule. These coveted positions are usually given to students who have demonstrated the highest level of proficiency in the courses that they tutor. Prospective business students who need help from a tutor should feel assured in knowing that they are working with the best and brightest in the UMSL Community. Tutors are usually hand-picked by department heads and leaders who look for patient and intelligent students to fill these roles.

Clearly, the tutoring program at UMSL is something that provides huge benefits to all parties involved. It is the hope of the College of Business that students and tutors will cultivate long-lasting relationships through common career interests in the field of business. These relationships often lead to additional networking opportunities through business clubs and organizations within the UMSL community. Tutoring services are meant to serve the needs of business students and augment current efforts in their respective courses. To make the most out of tutoring services, students should come prepared with specific questions on practice problems or assignments. The overall difference tutoring services can make is profound, as students exceed and achieve their academic goals.


 

What to do with your Health Savings Account funds?

Consider investing your Health savings account (HSA) instead of having it sit in cash! Well less than 20% of the funds sitting in HSAs are invested in mutual funds now. If your investment horizon for taking money out of your HSA is not until many years from now, consider investing it in quality mutual funds.

What if you don’t have or don’t like the mutual fund options available through your current HSA? Consider rolling over part or all of your current Health Savings Account balance to an HSA provider highly rated for investing. Which HSA provider should you choose? See the Morningstar report at http://corporate1.morningstar.com/ResearchLibrary/article/813893/2017-health-savings-account-landscape/

and click on “Download Paper”. It ranks the 10 largest HSA Plan Providers. See the summary in Exhibit 1 on page 3 of the paper. It summarizes the rankings by whether you use your HSA for qualified medical expense spending currently or for investing and future reimbursement of such expenses. In this paper, Morningstar rated the following Investment Plans in the Top 3: HSAs provided by HealthEquity, Optum Bank, and The HSA Authority.

Could your Health Savings Account (HSA) make you wealthier than the match your employer puts into your 401(k)? Yes!

How to determine which one will make you wealthier? Use the graph in Figure 1 on page 44 in the article you can download at http://www.umsl.edu/~geislerg/articles/HSAContribution.pdf to compare two percentages.

The first percentage is your employer’s matching contribution to your 401(k) (e.g., 25%, 50%, 100%). The second percentage is your combined tax rate (i.e., federal income tax rate, state income tax rate, Medicare tax rate on your salary, and Social Security tax rate on your salary) you are subject to on the last part of your salary (that will be directed into your HSA). The federal income tax rate schedule is available at http://www.bankrate.com/finance/taxes/tax-brackets.aspx When using the federal income tax rate schedule, remember to subtract your exemption deduction(s) of $4,050 per exemption and the greater of your standard deduction ($12,700 if married filing jointly and $6,350 if single) or itemized deductions to estimate your taxable income for 2017.

Click on “State Individual Income Tax Rates” at https://www.taxadmin.org/current-tax-rates to find state tax rate information.

The Medicare tax rate is 1.45% (or 2.35% if your total salary exceeds $200,000 if single or $250,000 if married filing jointly).

The Social security tax rate is 6.2% but becomes 0% to the extent one’s salary exceeds $127,200 in 2017.

Now that you have the two percentages, go to the graph in Figure 1 on page 44. For points northwest of the curved HSA line in Figure 1, an employee will be wealthier if contributing to his or her employer-matched 401(k) first. For points southeast of the curved line, employees will be wealthier if contributing to their HSA first. (Note that you can only contribute to an HSA if you have qualified high deductible health insurance.) For instance, if an employee’s combined tax rate is greater than 20 percent, and his or her employer’s 401(k) match is 25 percent or less, contribute to the HSA first. Another example is that if an employee’s combined tax rate is greater than 33⅓ percent, and his or her employer’s 401(k) match is 50 percent or less, contribute to the HSA before contributing anything to your 401(k). Remember that the tax-favored treatment for HSAs only occurs if the distributions are to pay for or reimburse yourself for qualified medical expenses.

Even if the comparison of the two percentages on the graph shows you’ll be wealthier if contributing to the HSA first, for your financial well-being also try your best to get the maximum employer 401(k) match you are entitled to.

Prof. Geisler wins financial planning article award

The Montgomery-Warschauer Award honors the paper published in the Journal of Financial Planning that provided the most outstanding contribution to the betterment of the profession in the preceding year. The article provides the tax-efficient rank ordering for contributing to Health Savings Accounts (HSA), retirement accounts, and 529 higher education accounts, and for paying debts. Geisler shows that the tax savings on many employees’ contributions to an HSA increases wealth by more than an employer match on the same employees’ 401(k) contributions. https://www.onefpa.org/journal/Pages/JAN16-Could-a-Health-Savings-Account-Be-Better-than-an-Employer-Matched-401(k).aspx

Even at the beginning of their career, employees should save for retirement

Greg Geisler

 

Greg Geisler, PhD, CPA
Associate Professor of Accounting

 

According to a recent study titled “Retirement Account Options When Beginning a Career” by Gregory Geisler, associate professor of accounting at the University of Missouri-St. Louis, and Jerry Stern, professor of accounting at Indiana University-Bloomington, which appeared in the May, 2014 issue of the “Journal of Financial Service Professionals” and was recently highlighted in an article in USA Today, the coauthors said there is a three-step decision-making hierarchy to follow. “This hierarchy is what will make the individual wealthiest after considering taxes,” Geisler told USA Today.

Those steps include:

1st) Contributing enough to their employer-sponsored retirement account (e.g., 401(k), 403(b)) to receive the maximum matching contribution from their employer. Some employers offer a Roth retirement account and for new employees starting their careers who plan to save throughout their careers for retirement, this is the best option. Even if your employer does not offer the Roth option, still contribute enough to your 401(k) (or 403(b)) to receive the maximum employer match.

2nd) If the new employee still has funds available to fund retirement accounts after following the first step, contribute to a Roth IRA because the investment choices available are much larger than inside an employer-sponsored retirement account. For 2014, federal tax law allows a maximum of $5,500 to be contributed by an employed individual under age 50 to their IRA accounts. The second step can be skipped if the new employee likes the investment choices available inside their employer-sponsored retirement account.

3rd) If the new employee still has funds available to fund retirement accounts, make unmatched contributions to their 401(k) (or 403(b)). Again, if the Roth 401(k) (or Roth 403(b)) option is available, that is recommended. For 2014, federal tax law allows a maximum of $17,500 to be contributed by an employee under age 50 to their 401(k) (or 403(b)) accounts, although some employer’s plans may not allow that much.

“For investments in Roth retirement accounts, regardless of whether tax rates are rising, falling or remaining constant over time, employees can depend on their annualized after-tax rates of return and future after-tax values to be unaffected by their changing marginal tax rates,” Geisler and Stern wrote in their study.