Flyboyjohn

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Flyboyjohn last won the day on January 27

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About Flyboyjohn

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  1. 1. Generous employer provides post-retirement health benefits to retirees (pre-65 continued participation in group health plan, at 65 payment of Medicare Supplement and Part D premiums). Is there any reason these benefits would not be tax free to the retirees? 2. Same employer also pays premiums for a whole life insurance policy on each retiree until death. Is there any way this benefit can be tax free to the retiree and if not is the proper employer reporting to the employee a W-2 or 1099? Thanks
  2. I'd be happy to provide a quote (757) 624-3003
  3. For those that like to run projections of the net after-tax advantage of pre-tax retirement plan savings you might consider this possible scenario: Maximum Federal rate on wage, pension & other regular income 33% Maximum tax rate on business income from flow-thru entities not paid to owner(s) as wages 25% Exclusion from tax of 50% of interest, dividends & capital gains (making max tax on investment income 16.5%) So the self-employed doctor has the following choice: 1. Keep $50,000 of business income, pay tax at 25%, reinvest after tax at 16.5% tax rate on earnings 2. Put $50,000 into a PS plan (assume doctor is only participant), save current tax at 33% but ultimately pay tax on all distributions at 33% Some commentators say the results shift to favor option 1 even when you disregard the possibility of having to make contributions for eligible employees and pay plan administrative costs. Of course such a scenario would also need to consider making the $50,000 contribution as ROTH (immediate conversion of employer contributions to ROTH) which may result in ROTH becoming the game of choice for professional practices.
  4. I assume the payroll company/software cut them off at $18,000 since the participant hadn't made a separate "catch up" election. If the requirement to make a separate CU election was clearly communicated to participants (hopefully on the election form) I don't think you have a make a correction. We have the same problem with our payroll company (Ceridian) and it irritates the heck out of me. If I don't remember to go into the system and make my CU election after the $18,000 is withheld I won't get it.
  5. Even in the old days (and continuing today) it was/is never correct to file a 5500 and Schedule I or H for the FSA part of a cafeteria plan unless someway/somehow the employer was silly enough to set up a Trust and segregate "plan" assets from the employer's general assets. What the agencies realized was it was pretty silly to require cafeteria plans (whether or not they included a FSA) to file a 5500 and Schedule F (I think it was). So I wouldn't amend or resurrect any prior year filings.
  6. Two reasons the ADP test exemption is not important and worth giving up: 1. Charities usually have very few if any HCEs and if they do they can add a 457(b) to more than make up the reduced deferrals 2. Charities usually don't want a vesting schedule and have an employer contribution that easily meets safe harbor If a charity has an ERISA 403(b) but their contribution is less than safe harbor I tell them to increase salaries by the former employer contributions, encourage employees to increase their deferrals by similar amounts and switch to a non-ERISA 403(b)
  7. This is addressed in the DOL VFCP and PTE 2002-51. You can only give the excise tax amount to the participants and not file a 5330 if: 1. The excise tax is $100 or less 2. You make a VFCP filing with DOL. 3. As part of the VFCP filing you provide the DOL a copy of the 5330 you would have filed with IRS but for this exception. IMHO I'd rather file the 5330 and pay the tax.
  8. Agree with MoJo that 401k is clearly best for start up but going one step further I've been advocating since 2009 that existing ERISA 403b plans should change to 401k for a long list of reasons. IMHO the only reason to ever use 403b is if you can qualify as non-ERISA
  9. IRS has started notifying employers it suspects were Applicable Large Employers for 2015 but who have not filed 2015 Forms 1094-C and 1095-C (see redacted letter 5699 attached). I'm wondering what "records" iRS used to make this determination, perhaps the filing of a threshold number of W-2s in 2014 that might indicate ALE status for 2015? IRS Letter 5699 Request for 2015 Forms 1095-C_15342356(1).PDF
  10. My understanding is there are laws in many/most states that say an employer cannot take a non-governmentally required deduction from an employee's pay without their consent and by implication the consent can be revoked. These laws are probably not preempted by ERISA so we advise that employees can revoke their agreement to make loan repayments at any time. There's a recent thread discussing the issue of the consequences of the PAs actual knowledge at the time the loan is made that the participant intends to default.
  11. While I agree with all the posts regarding the sham termination of employment vs. the sham loan I submit that there's a material difference in plan sponsor risk. The sham termination of employment requires knowing participation in the scheme and could result in plan disqualification. The "sham" loan does not necessarily involve the plan sponsor (don't some recordkeeping platforms issue plan loans without sponsor involvement?) and as long as the form of the loan is in order I don't see how the "intent" of the participant comes back to ding the employer.
  12. We're a law firm and have a TRA '86 prototype we'd be willing to sell to your client
  13. Why couldn't they take a loan and then immediately default? Avoids the winks and nods
  14. Correct, for the years prior to 2009 you simply answer something like 6 items (name, address, EIN, etc.) and insert a code for a 403b plan and that's it).
  15. Wasn't 2009 the first year for "real" 5500s (with numbers) and before that they were the "nothing" 5500s? If so can't you easily prepare 5500s back to 2001 and file under DFVC?