Changes to Hardship Distributions for Retirement Plans

By Jo-Ann Lewandowski, QKA
Manager, Retirement Plan Services
As part of the Bipartisan Budget Act of 2018, the IRS has proposed new regulations on hardship distributions for retirement plans. Once these regulations become law, plan sponsors will then need to amend their plans’ hardship distribution provisions by the last day of the plan year beginning on or after January 1, 2019.

A hardship distribution is an optional distribution feature in a 401(k) plan. The following is a list of common financial needs that qualify as hardships.

  • Funeral expenses
  • Unreimbursed medical expenses for you, your spouse or dependents
  • Payment of college tuition and corresponding education costs for you, your spouse, your dependents or children who are no longer dependents
  • Payments to prevent eviction or home mortgage foreclosure
  • Purchase of an employee’s principal residence
  • Expenses for damage to employee’s principal residence
Listed below are the major changes that will be implemented in conjunction with the passing of the Bipartisan Budget Act. Companies need to amend their retirement plan in order to take advantage of these changes.
  • Employees will no longer have to wait 6 months to make 401(k) contributions after the issuance of a hardship distribution.
  • Employees are no longer required to obtain a plan loan option to qualify for a hardship.
  • 401(k) contributions, safe harbor contributions and investment earnings are now eligible for hardship withdrawals.
  • Employees can add a “primary beneficiary under the plan” – an individual for whom qualifying medical, educational and funeral expenses may be incurred (regulations had previously referenced only a spouse or dependent).
  • Certain disasters – such as hurricanes, floods and wildfires, etc. – are now qualifying expenses.
  • The home casualty reason for hardship does not have to be in a federally declared disaster area.
For more information about employee benefit and retirement plans, please contact Jo-Ann Lewandowski at (317) 613-7842 or email

Your 2019 Potential Depends on What You Do NOW!

By Mike Bedel, CPA, CGMA, MBA
Partner, Director of Audit & Assurance Services

Now that we’re in the fourth quarter of 2018, you’re likely focused on wrapping up the year and ringing in the holidays. But in order for your business to continue thriving, it’s imperative for you to shift focus and start laying a firm foundation for 2019. To make next year successful, it’s vital that deliberate efforts are made NOW in order to adequately allocate your company’s resources for the coming year.

Any business owner should be proactive rather than reactive. Instead of allowing yourself to get struck down by unexpected setbacks, build a plan for success that allows you and your business to withstand the many challenges that are bound to occur. Now is the time to identify the obstacles you may face in the upcoming year and develop a contingent strategy for how to overcome them. The less planned may see failure, but the savvy entrepreneur sees an opportunity for profit!

One step toward building strength in the next year is to increase recruiting efforts of top talent and skillsets! Think of new ways to keep employees engaged. What can you plan and promise now, or in the near future, that will compel them to stay committed through 2019 and beyond? And don’t just focus on vetting incentives for your employees; think of all the stakeholders in your business. How can you more effectively manage and motivate your human capital?

In addition to adding talented members to your team, you may find that you need to expand your line of products and services. And in that case, you’ll want to be sure and develop an operating and capital expenditures budget. During this process, take inventory of the resources you have at your disposal and determine how to effectively allocate them.

Financial planning and budgeting in particular is crucial this time of year. Be realistic in your planned assumptions, but also utilize stretch goals to energize your team. If you’re not prepared, the new year will only deliver mediocre results, and no one aspires to be average! Stay ahead of your competition!

If we can assist you with achieving success in your business or personal affairs, please contact Mike Bedel at (317) 613-7852 or email him at

What Drives Success in Your Business?

By Lisa Blankman, CPA
Manager, Audit & Assurance Services

It’s all too easy for business owners to get lost in the hustle and bustle of their workday lives. Routine gets in the way of reflection, clouding their long-term vision for the company, or even the effort to focus on it! As business guru Michael Gerber said, you need to take time to “work on your business, not just in your business.” That will be the cornerstone of you finding your SUCCESS!

Stepping back and taking a bird’s-eye view of your company is essential for it to evolve and thrive. Business owners who find themselves stuck behind their desks are the ones who shoulder too much responsibility and don’t depend on other forces to help drive the business toward success. As an owner, you need to realize you’re not alone in your efforts. You also need to identify the barriers to your company’s success and develop a plan to overcome them.

Schedule a specific time on your calendar each week, to take your mind off your daily tasks, and think about the other potential success drivers of your business. Which ones are steering you toward your goals? These success drivers could be your employees — their work ethic, talents and skillsets, the management team — the leadership they provide in the many facets of your business, or your offering of products and services. The list goes on. Determine which current drivers deserve the most investment of resources, as well as new ones that have less potential for the results you seek.

As you reflect on your business condition, you should also ponder on whether the past drivers of success hold the same potential they did a few years ago. Should their place in your planning remain? Are any of them falling short? Do they require some re-engineering?

By stepping back on a regular basis and enabling yourself to analyze your business away from day-to-day distractions, that will allow you to see more clearly a better path forward. And therein lies the success you seek!

If we can assist you further with achieving success in your business or personal affairs, please call Lisa Blankman at (317) 613-7856 or email

Client Profile: Prime Car Wash

When Chris Galloway co-founded Prime Car Wash in 2012, he was far from the car wash industry. He was in the midst of his chiropractic career at ProWellness Chiropractic in Fishers.

Galloway co-founded the practice in 2008 with fellow chiropractor Robert Hatfield. When one of their patients, Brent Oakley, brought up the idea of creating a higher-end, full-service car wash, Galloway and Hatfield looked into it and became intrigued. They saw a gap in Indy’s full-service car wash market and grew eager to fill it after discovering the successful financial records of such a car wash in Baltimore, Maryland. Galloway and Hatfield joined forces with Oakley to create what eventually became Prime Car Wash.

The business stands out from the competition by offering express detailing, cleaning every inch of the car within 30 minutes. From removing scuff marks on the outside to shampooing the carpets inside, Prime Car Wash makes vehicles look brand new. Better yet, it has an in-house café where customers can sip coffee and surf the internet while they wait.

Since the first Indianapolis location opened in 2012, Prime Car Wash has opened three more locations in the state along with one in Florida.

As the business grew, Galloway and Hatfield decided to dedicate more of their time to it. They sold their chiropractic practice in 2015.

Galloway took on all financial responsibilities at Prime Car Wash.

“This job aligns with my personality more,” he said. “I’m very math-oriented and like working with numbers, so it allows me to focus on what my brain seems built to do.”

However, given his largely medical background, Galloway finds himself needing help navigating through the financial field. This is why he values Prime Car Wash’s relationship with Sponsel CPA Group, as the accounting firm took the majority of financial responsibilities off his back. This leaves him with more free time to manage his team and Prime Car Wash’s lending relationships as well as time to grow the business.

“They understand our complex financial structure,” he said. “And they understand the individuals in our business as well.”

In addition to providing financial management, tax consultation and audit and assurance services, Sponsel brings a personal touch that Galloway appreciates.

“They’re great people, first and foremost,” he said. “They’re incredibly responsive, always getting back to us right away. I always feel supported and like our business is in good hands.”

Click here to learn more about Prime Car Wash.

Employee Spotlight: Vince Ravotto

Vince Ravotto first joined Sponsel CPA Group as an intern in the midst of the 2017 tax season. He started full-time as a Staff Accountant in the Audit & Assurance Services in mid-September of this year. A graduate of Marian University with a bachelor’s degree in accounting, Vince brings a wealth of knowledge and experience to the team.

Vince’s duties include conducting audits, reviews, compilations and agreed-upon procedures for clients across a broad spectrum of industries including construction, distribution, manufacturing, service and not-for-profit.

Outside of work, Vince enjoys cheering on his favorite sports teams — the Chicago Cubs, the Minnesota Vikings and the Virginia Tech Hokies. He’s also an avid golfer and world traveler. Welcome to the team, Vince!

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