I am new at this company and it would seem that the first payroll in 2009 had an HSA deduction that was not captured in box 12 of the W-2. It is a small amount of money across a large population. (7800 over 100 or so employees) We did not catch it upon our review of the W-2s. If we do not do corrected W-2s, what are the tax consequences for the employee. And will there will be a conflict with what is reported on the 5498-SA?

Hi,

I'm over the AGI limits for contribution to a Roth IRA and am thinking of doing the following:

1. Opening a traditional IRA

2. Contributing $5000 for TY 2009

3. Contributing $5000 for TY 2010

4. Immediately converting to a Roth

Is this possible, or do I need to wait 60 days after the initial 2009 contribution before converting the traditional IRA to a Roth to prevent the conversion from being treated as a 2009 conversion?

How are VEBAs being used to manage retiree medical liabilities?

Rachel Hamilton

Senior Industry Consultant

American Conference Institute

Workshop @http://www.americanconference.com/employment_benefits/BenefitPlans/workshop.htm

What strategies can help minimize risk of breaching fiduciary duty for cash balance?

What is the future of cash balance plans for the employer?

Rachel Hamilton

Senior Industry Consultant

American Conference Institute

Workshop @ http://www.americanconference.com/employme...ns/workshop.htm

I know the IRS came out with some guidance on partial plan terminations, where previously we just had case law, can anyone give me the cite for that IRA guidance ? Can't remember if it was a Revenue Ruling, or Rev. Proc or what form it was in. Thanks.

It appears that for SEP's and Traditional IRA's, if you read the page 9 instructions literally, you report the distribution as taxable in 2a AND as taxable amount not determined in 2b. Can this be right? http://www.irs.gov/pub/irs-pdf/i1099r.pdf

Plan could not pay the owner the lump sum as requested due to funding issues, so the plan was paying the life annuity. Owner dies, and plan still owes the lump sum. Beneficiaries still cannot take the lump sum due to funding restrictions.

The question is - do the beneficiaries now 'split' the annuity, or do they get a new annuity based on 1/2 of the lump sum owed and their own ages?

I vote for a new annuity value.

For our new employees (hired mid-year), the effective date of coverage for all benefits is "first of the month following employment". We have for years required that new employees turn in a completed election form, with any associated insurance applications, within 30 days of their date of hire.

Our medical plan is now saying that their rules are that the employee has 31 days from the effective date of coverage to turn in forms. Per their rules, an employee who starts work on March 2 would have until April 30th to get their paperwork in. This would be almost 2 months after the date of hire.

We think that if we followed the medical insurance plan's timeline, that we would be out of compliance with IRS.

Mid-year elections for new employees need to be "prospective" or within 30 days of hire if retroactive.

Are we correct? Or can we follow the timeline set up by the medical insurance plan?

Under section 13405©(1) of the HITECH Act an individual is entitled to receive an accounting of electronic health records with respect to PHI.

There is an exception in section 13405©(1)(A) from the general accounting rules that states that the exception in "paragraph (a)(1)(i)" of 45 CFR 164.528 (covering disclosures to carry out treatment, payment or health care operations) does not apply to disclosures through an electronic health record. Section 13405©(1)(B) of the HITECH Act goes on to state that an individual "shall have a right to receive an accounting of disclosures described in such paragraph of such information ... during only the three years prior to the date on which the accounting is requested"

Does the three year limitation apply to disclosures to carry out treatment, payment or health care operations? Or does this apply to all electronic health records? The indentation and numbering of the statute seems to suggest the latter; however, the language (and use of the word "paragraph") seems to suggest the former.

Thank you!

I may have posted this in the wrong forum and I couldn't find anything related with a search. What software are my fellow TPAs using for client/contact management? We currently use a customized web-based database but it is getting old and support has ceased.

We need to keep track of our "clients" - the actual employers sponsoring the retirement plan(s) and all the associated data about that employer including contacts, FYE, EIN, etc.

Then, we need to track the Plan(s) that each employer has including the tons of provisions, fees, investment advisor, custodian, recordkeeper, etc.

Most off-the-shelf products I have looked at are really just for individual contacts. What are people using?

New one on me...

Client is the Trustee of a PS Plan. Investments are pooled Trustee-directed. Trustee is considering purchasing as a trust investment U.S. silver coins minted in 1964 or earlier (which apparently have significant silver content).

I was surprised to find that there does not seem to be an outright prohibition on investing in same - assuming it otherwise meets prudence and diversification requirements. I even came across a website that will value silver coins, based on the type and number of coins and the current price of silver - so valuation not an issue.

Anyone had any experience with such?

Thanks!

Our Special Tax Notice reads, for distributions from a QP (no Roth contribs):

"If you roll over the payment to a Roth IRA, a special rule applies under which the amount of the payment rolled over will be taxed."

Do we have to w/hold on this? And would it be 20%?

Is there a special 1099 R code?

What is the current IRS position on decreases in accrued benefits due to increases in covered compensation? Is that allowed?

If the accrued benefit at 12/31/2009 = (5% x AMC x YOP) + (.5% x (AMC - 2009CC) x YOP),

can the accrued benefit at 3/15/2010 = (5% x AMC x YOP) + (.5% x (AMC - 2010CC) x YOP)?

AMC and YOP are the same, but the 2010CC exceeds the 2009CC, thereby producing a lower AB.

Does the 12/31/2009 AB have to be protected?

$6.75 corrective distribution and 1.35 in related match forfeiture (not including gains)

(and I'm too honest to fudge the comp figures just to make it pass)

my all time record low a few years ago was $3.00 for an ADP failure - and that was to be split between 2 people.

I've seen CPA and retirement providers charge as much as $2500 for a "signature ready" form 5500. DO you think this is a fair price?

On the advice of our actuary, we each year waive the other small previous credits we had built up in the past for our DB plan.

Our pension investment guy (what a genius he is!) made a big bet that came through on a particular stock in late 2008 and, along with good results in the rest of the portfolio, got us a whopping overall return in 2009. If the gain turns out to be big enough to put us in a 100+% funded situation, will we get to use any of that overfunding to reduce the otherwise regular annual cost (normal cost) of the plan in 2010?

For example, say our normal cost comes in at $50,000 and we end up overfunded by $20,000. Will that dollar-for-dollar reduce our normal cost to $30,000?

A pregant employee elects Day Care and has been making contributions. However, as the blessed event arrives, she realizes that she's going to be a stay at home mom, possibly through the end of the plan year and she may no longer be employed by the company afterwards. Are there any creative ways to spend the money she's already contributed in this case? She has no other children and there are no elders to take care of.

Just an FYI that Relius does NOT work with Windows 7 machines. The sales people tell you they have work arounds, but the techs confirm they don't really work.

We signed up with Relius before we knew this, and are now scrambling to find an new vendor.

Can someone point me in the right direction to find a plain-English writeup of how, if possible, to correct the following situation?

For 2009, one of our employees checked the box for Dependent Care on our pre-tax contribution form for our cafeteria plan/flexible spending account. But, he meant to check the Medical Care box. He didn't catch the mistake then, nor did he catch it after he read the confirmation sent to him by Human Resources showing which box he checked. And, I guess he didn't catch it all during 2009 when he didn't receive any medical reimbursements, or because he didn't look at his check stub.

So, he filed his 2009 tax return and had to pay tax on the unused dependent care benefit. I realize he could have avoided the tax by subtracting the forfeited benefit on Form 2441, but he didn't do that and, anyway, that might mess up what he really meant to do, which is to use the money for some dental work.

Which brings me to my question. How do we fix the error he made on the election form? Send a corrected W-2 showing $0 in box 10? Then let the plan administrator know to transfer the money from the Dependent Care account to the Medical Care account? Anything else?

Thanks,

Ken Davis

Univ. of South Alabama

We're looking to expand our practice through some acquisitions. Does anyone know of a good resource to find TPA firms looking to sell? Or maybe a business brokerage/ M&A advisory firm specializing in our industry?