Dealer Insights - July/August 2012 - Dealer Digest
DEALERS WARY OF COSTS FOR FACILITY UPGRADE PROGRAMS
Auto manufacturers need to do a better job presenting a business case that improvements sparked by their facility image programs will have a positive effect on dealerships’ bottom lines, a recent study by the National Automobile Dealers Association (NADA) indicates.
According to NADA, the study results (released in February) show that program costs can be excessive and the value of the programs “weakly demonstrated.” NADA further concludes that these “factory image programs,” which typically involve standardizing and modernizing stores, may fall short in preparing automotive retailers for the future evolution of the industry, in which online shopping — rather than visits to a dealership — will play an enormous role.
NADA Chairman William Underriner said in April that the association has received mixed reactions from automakers about the study conclusions, ranging from highly receptive to resistant.
DEPENDENT-CARE TAX BREAKS FOR EMPLOYEES
You can provide certain fringe benefits to your employees at little cost. One of these is dependent care assistance.
A dependent care Flexible Spending Account (FSA) allows employees to contribute wages pretax that can be used to pay — or reimburse the employee for — eligible dependent care expenses. Generally, an employee can contribute up to $5,000 each year.
Eligible dependents are generally members of the employee’s household who receive more than one-half of their total support from the employee. That includes an employee’s dependent children under age 13, the employee’s spouse if he or she is unable to care for him- or herself due to physical or mental disability, and elderly individuals who meet certain requirements.
Employees who choose to participate in a dependent care FSA should estimate their dependent care expenses for the coming year carefully and obtain reimbursable services by Dec. 31 of each year in which they participate. Any funds not used for the year’s expenses are generally forfeited.
Employees also should compare FSA benefits to those of the child and dependent care tax credit, which will reduce an eligible employee’s tax bill dollar-for-dollar. Expenses eligible for the credit are limited to $3,000 for one dependent, $6,000 for two or more. Income-based limits reduce the credit but don’t phase it out altogether.
If you’re considering offering dependent care FSAs to employees in 2013, now’s the time to get your ducks in a row. Open enrollment for these programs is in November, for a Jan. 1 effective date. New employees may enroll in the program within 31 days of their date of hire. Plan participants must re-enroll each year.
Dealer Insights - July/August 2012 Issue