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Personally, I think that any 5500 filing made by 10 1/2 months after plan year end should be exempt from penalties without anyone having to file for an extension. There are no taxes paid with the form and the filing for an extension has no filing actions other than its due date. If a 5500 filing is received after the 10 1/2 months date, then the penalties can be computed using the existing 7 month due date. (This could avoid needing an act of Congress to implement the change.) Bottom line... no extension to file, no form to maintain, eliminate a deadline, save time and cost.

§401(a)(9) sends you §416 which sends you to §318 for attribution which is used for RMDs. For purposes of the RMD rules he owns the stock of his children, just like HCE determination. It is different for Controlled Groups but be happy the RMDs were properly done and you don't have to go back for missed RMDs under VCP.

What rule/mechanism can you cite for a retroactive opt-out? I honestly don't care about what the participant wants. This is a plan issue, you correct and move on. Do not make the situation worse by trying to do what they "want" instead of just doing what is right.

Has the health plan’s or welfare plan’s administrator yet done an analysis of whether the two distinct companies or businesses are one employer within the meaning of Internal Revenue Code § 414(b)-(c)-(m)-(n)-(o)?

In the 5500-SF instructions, "What to File", it says, "Plans required to file an annual return/report that meet all of the conditions for filing the Form 5500-SF may complete and file the Form 5500-SF in accordance with its instructions." There are a lot of "musts" in the instructions, but here they use "may". Is there any reason a small plan filer that is otherwise eligible to file a 5500-SF cannot choose to file a 5500 with Schedule I?

I will be so glad when these silly forms can be done electronically. What a PITA they've been just the last few years.

Many plans provide an involuntary distribution on a participant’s small ($1,000, $5,000, or $7,000) balance. But many plans do not provide an involuntary distribution on a beneficiary’s account, except as needed to meet a § 401(a)(9) required beginning date or minimum distribution, including a continued minimum distribution that began before the participant’s death. For the situation you’re working on, what does the plan’s governing document provide? This is not advice to anyone.

No, but if he is incorporated then only W2 compensation can be considered. Unless there is some other compelling reason, I see no advantage in being a C-corp with only the potential disadvantage of double taxation. Almost always see individuals incorporate as S-corps (or LLC taxed as an S). In that case, again only W2 pay counts as pensionable, but any K1 dividend distributions left after reasonable W2 pay and pension deductions are not earned income for Medicare taxes (assuming W2 above FICA wage base). And all my numbers above assume owner-only plans, no employees, and "plan compensation" of at least the $330,000 maximum after all deductions.

As Lou alluded, he has a combined plan deduction limit on his "employer" (non-401)k) deferrals) of 31% of eligible pay - which is his net adjusted SE earnings minus those "employer" contributions limited to $330,000. This does not apply if the employer contribution to the DC plan does not exceed 6% of limited eligible pay, or $19,800 on $330,000. If $30,000 was his salary deferral and catchup, then the remaining $25,000 was profit sharing and exceeds that 6% mark. Therefore, 31% on $330,000 is a $102,300 maximum 2023 combined plan deduction. Also as Lou stated, need to bring in an actuary, and sooner rather than later, someone who can map everything out and ensure compliance. This usually requires that any DC plan contributions other than 401(k) salary deferrals are determined last to ensure such profit sharing does not exceed 6% of eligible pay after all adjustments and deductions. 2023 is still possible but much more limited on the deduction ($77,300) than desired. He could accrue a larger benefit for 2023, just deduct the entire required contribution for 2023, carrying forward the excess for a 2024 deduction - but a knowledgeable actuary/actuarial firm should be consulted to map that out for your client. And 9/15/2024 is a drop dead date for funding 2023 and a lot of steps need to be completed before then so the process should be started early enough before then - like before Labor Day if not mid-August.

If he's already contributed $55,000 to the DC plan for 2023, you are going to have problems deducting a $140,000 contribution to a DB plan unless there are employees that would make this a PBGC plan due to the combined plan deduction limit. If he hasn't made any 2023 contribution and is on extension, limit the DC contribution (not including 401(k), if any) to 6% of pensionable pay. If you are setting up for 2024, talk to the plan actuary before making any contributions to either plan to make sure you don't get into nondeductible contribution issues.

1) no, he can continue with Schedule C 2) yes, he can, he will pay SE tax on all income BEFORE the pension deductions 3) No, it is not too late to set it up retro for 2023 assuming his tax return extension has been filed timely.

The Form 5500 Instructions include this: If the filing due date falls on a Saturday, Sunday, or Federal holiday, the return/report may be filed on the next day that is not a Saturday, Sunday, or Federal holiday. https://www.dol.gov/sites/dolgov/files/EBSA/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500/2021-instructions.pdf