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Calculation of earnings on late deposits


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If correct by filing the Form 5330 and paying the excise tax, can the DOL calculator be used to determine the earnings?  A VFCP filing will not be done.  I have seen where some people use the DOL calculator even when the VFCP filing will not be done.  I have also seen where it is indicated that the DOL calculator cannot be used if not filing under VFCP.  What are people actually using to determine earnings on the late deposits?

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It is not so much that the calculator cannot be used if you don't file VFCP, but the calculations MAY be rejected if examined by the DOL.  They may also be accepted.  It is no guarantee either way.

If you want to be certain that your results are acceptable using the calculator, do a VFCP filing.  Otherwise, roll the dice.  If you decide to roll the dice, make sure you inform your client of the risk.  

I use the calculator about 90% of the time, but I also file VFCP 90% of the time.  There are times when other methods of calculations result in a better result for the client and is worth the time and effort to do get there.

 

 

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