Jump to content

Comp Reduced by 125

Recommended Posts

This is ridiculous.  I am reading that employee deferrals under a 125 plan are supposed to be excluded from the definition of compensation.  So Johnny makes $100,000 and his insurance premiums are $5,000 so his eligible comp is just $95,000.  Is anyone in the country doing THAT right??

I'm renaming these things to "COMPLEX's"  I don't know what it stands for yet...

Austin Powers, CPA, QPA, ERPA

Link to comment
Share on other sites

Doubtful. We've had some VCP filings to correct other issues where this was corrected simultaneously.

I agree that SIMPLE's are not! So many ways for errors to occur, and they almost never have any professional oversight (of course, they aren't supposed to need it, but they do).

How about Convoluted Operations Moronic Prototype Employer eXacerbation plans?

Link to comment
Share on other sites

Nope - filings (which were all  approved) proposed leaving excess amounts in the plan, in the participants' accounts. Relatively small amounts, and mostly NHC employees. The IRS is pretty reasonable about this - but VCP fee is increased if excess amounts retained in plan. Employer generally prefers to do this, however, as opposed to trying to take away amounts and earnings going back several years! Plus, our fee to figure all that out would likely have been as much as the additional IRS fee...

I wasn't sure if you meant "eligible" or "ineligible" on the severance? Either way, without doing any research, I'd say true severance pay was ineligible.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...