S-corp owner gets W-2 wages of $100,000. There are health premiums paid of $10,000 that are added on to his income on the W-2.

The extra $10,000 is subject to income tax but not SS Taxes? (Is that backward?)

Is plan comp $100,000 or $110,000?

Thanks (At least its not a K-1 question)

Does anyone know how to print a hard copy of a Thread or even a reply?

Posted this under the 5500 page and got no response, perhaps this is a better place for it.

I had a client ask me this...

Voluntary Long Term Disability, Life Insurance & Accident plans that employees pay through pay roll deduction. Statement from insurance company identifying the contract and broker commissions paid.

Since this is voluntary and employee paid, what if any reporting obligations do they have?

Is there an understandable source out there that can lead me through the questions that I need to ask the client to determine if they should file? I have so little contact with health plans that I haven't a clue.

Thanks for any help that can be provided.

At the risk of beating the proverbial horse ...

When I terminated plans in the past, for example, during the GUST RAP, I always adopted an amendatory agreement (or restated the plan document) as if I was amending the plan at the end of the RAP. However, with the Good Faith EGTRRA Amendment, it simply isn't as clear whether a detailed amendatory agreement (amending the specific plan sections and plan language) is still necessary. I have not been able to find anything issued by the IRS that states that the good faith amendment alone would be sufficient; and, logically, if the termination accelerates the RAP and the good faith amendment is NOT sufficient to meet the amendment requirements at the end of the RAP, it should not be sufficient now. However, I can't find where anyone is doing anything beyond the good faith amendment.

Has anyone filed for a determination letter upon the termination of a plan, post-GUST and pre-EGTRRA RAPs, with just the good faith amendment, the model 401(a)(9) amendment, and the automatic rollover model amendment and received an approval?

If not, any thoughts or comments on whether the full-blown amendatory agreement for EGTRRA is necessary?

Thank you in advance!

Does anyone know if an employer can legally terminate an FSA to start an HSA (mid plan year)? I am aware of the transition relief available. Thanks!

A controlled group of companies maintains four separate defined contribution plans. Effective 1/01/06, three of the plans are merging (without termination) into the fourth plan. Most of the provisions of the 4 plans are consistent or not protected. However, I have a question regarding in-service distribution provisions.

The surviving plan permits hardship distributions only. No other in-service is provided for. One of the three merging plans provides for no in-service at all, so I'm ok here. One of the other two merging plans provides for in service at 59 1/2 of employer profit sharing, and the other provides for in-service at NRA (65 for all plans) and for participants in the plan for 5 years and balances allocated for at least 2 years. I call it the 5-2 rule. The employer would like the surviving plan to provide for hardship only, as it now does.

Question: Must the in-service distribution provisions be carried over into the surviving plan to avoid a violation of 411(d)(6), or can they be eliminated much like optional forms of benefits (ie annuity and installments) wilh notice to plan participants?

Thanks.

An employer has an existing cafeteria plan for the payment of health insurance premiums. Beginning in 2006, he is adding an HSA component. We know that the premiums can't be paid with HSA dollars, but as long as the employer keeps a separate accounting, is there any problem with having the 2 components under the same cafeteria plan?

I have a plan with a number of employees from India. Many of these employees have named a relative in India as their primary beneficiary. Recently, one of the employees died. His Beneficiary Designation Form names his mother, who lives in India, as his primary beneficiary.

The company asked how to pay the mother. I told them she needed to get a temporary tax ID so Uncle Sweets can get his tax money first. The company thinks this process is arduous and have not asked the mother to get the temp tax ID.

Is there something bigger, better, faster than the process I've suggested that you know of?

Thanks for the help.

Hi,

The Company I work for has decided to reimburse our employees this year for their deductible on their health insurance. I checked with our Accountant and Attorney and neither one was able to help us obtain a section 105 form. We were told we needed this in order to make any reimbursements. Also, do we need to do anything with HIPPA? We really wanted to self administer since we only have 12 employees on he plan.

A plan is designed as a safe harbor basic match plan, whereby the employer is to deposit the safe harbor match on a pay period basis. However, the employer has failed to deposit the safe harbor match on a pay period basis in 2005. What are the consequences of not depositing the safe harbor contributions by the end of the quarter following the quarter in which the 401(k) was depsoited?

1. Does the employer have to allocate the safe harbor match based on the full year compensation?

2. Does the employer have to deposit lost earnings and pay an excise tax?

3. Does the employer lose the safe harbor protection and have to perform ADP / ACP testing on the plan?

The same employer sent out the 2006 safe harbor notice to its employees and the notice states the safe harbor would be deposited into the plan on a pay period basis. Can the employer amend the plan to remove the pay period provision and issue a revised safe harbor notice to the employees - or are they stuck with the safe harbor match done on a pay period basis?

We are a city with a 457 plan covering 1000 employees. We have assets of about $25 million. We're not satisfied with our current vendor. Any recommendations out there? Who specializes in our market and what makes them good? All thoughts appreciated.

Hi -

I'm 24 and I want to start putting money into an IRA Roth, but not sure which broker to go with. From the looks of the boards here, people seem to think very highly of Vanguard. May I ask why?

I plan on doing a lot of research on which broker to choose, but it would be a great jump start if I could hear why people tend to go to certain brokers. I was thinking of Fidelity or ING (If ING even offers a Roth) simply because I had heard of them previously. I do know that I want low fees, some help and guidance (but not a complete brokerage firm, like Merrill Lynch), a diversity of funds, and a very good website that helps me understand clearly what is going on and where I stand in regards to my future.

As for the fund to choose, I'm hearing that I should not go with a Tax-Exempt fund or an International fund, but stick to more stable (more conservative) funds. Since I am younger, I should also stay with the fund chosen instead of moving around from fund to fund. Anything else?

Also, do you suggest putting in more than the minimum each year - or just keeping it at $3000 (or whatever the minimum is)? If I make 45k a year, am single (but soon to be married in a year or two), and have $8,000 saved up for whatever, (but still have college loans, rent, bills, etc. each month), what do you recommend?

Any other great words of wisdom? Thank you so very much! Much appreciated.

Jessica

I'm a civilian attempting to puzzle out answers about my own retirement plan that my accountant and current benefit providers can't answer. I haven't been able to find what I'm looking for in past posts here. I am a 100% owner of an LLC and have a SEP-IRA. I'd like to convert to a Solo 401(k) to increase my maximum contribution. I am unmarried, have no employees, and don't intend to have any. I also own a 51% interest in an unrelated LLC, where the 49% partner is not related to me. He has his own LLC where he is a 100% owner and his own retirement plan. This second LLC has substantially lower earnings than my own LLC (or my partner's own LLC). I do materially participate in it now, although I may not in the future.

If it weren't for this second LLC, it seems like a solo 401(k) would make perfect sense, as I could increase my annual contributions substantially and begin making makeup contributions when I turn 50 next year. But in reading the language of the plan document and the relevant IRC sections they reference, I am concerned that if this second LLC were to hire an employee in the future that worked more than 1000 hours per year, that person might have to be covered by my plan because of "affiliated service group" and/or "controlled group" rules.

Can one of the experts here let me know if that is a legitimate concern?

Is it premissible to exclude leased employees from the tests under Section 105? They are not specifically mentioned in the regs, but I was wondering whether there was anything out there that includes or excludes them. Thanks.

This came in newsletter I get. Thought you 409A people might enjoy it...

http://www.faegre.com/articles/article_1781.aspx

I have a interspousal deed to transfer the entire interest of the residence to the participant. The participant wants a 2nd personal residence loan, stating that the loan is for paying the divorced spouse out.

The first princ. residence loan was to purchase the same property.

Are there any issues with providing a 2nd loan, that's amortized for 15 years for the same property at the participants word that the money is used for the purchase of the transferred interest? The document does allow 2 loans, and 15 year amort. for principle residences.

If Bank A buys Bank B when must the employees of Bank B become participants in Bank A's 401(k) plan. The eligibility period is 3 months. Can you hold them out during the transition period under 410(b) or must you follow the eligibility terms in the document?

I have a SH 401k with a 3% SHNEC. The groups are named as the 3 partners individually, and then 1 group as NHCE"S. They are giving the 3%SHNEC, but only one partner wants to put in a PS. Can I give him a minimal ps allocation wihtout giving an allocation to any other groups as long as I pass all other testing? I've never had this before and it just seems weird....can't wrap my head around it. Thanks for any help.

Merry Christmas all!

A Politically Correct Christmas Poem

Twas the night before Christmas and Santa's a wreck...

How to live in a world that's politically correct?

His workers no longer would answer to "Elves",

"Vertically Challenged" they were calling themselves.

And labor conditions at the North Pole,

were alleged by the union, to stifle the soul.

Four reindeer had vanished without much propriety,

released to the wilds, by the Humane Society.

And equal employment had made it quite clear,

that Santa had better not use just reindeer.

So Dancer and Donner, Comet and Cupid,

were replaced with 4 pigs, and you know that looked stupid!

The runners had been removed from his beautiful sleigh,

because the ruts were deemed dangerous by the EPA,

And millions of people were calling the Cops,

when they heard sled noises upon their roof tops.

Second-hand smoke from his pipe, had his workers quite frightened,

and his fur trimmed red suit was called "unenlightened".

To show you the strangeness of today's ebbs and flows,

Rudolf was suing over unauthorized use of his nose.

He went to Geraldo, in front of the Nation,

demanding millions in over-due workers compensation.

So...half of the reindeer were gone, and his wife

who suddenly said she'd had enough of this life,

joined a self help group, packed and left in a whiz,

demanding from now on that her title was Ms.

And as for gifts...why, he'd never had the notion

that making a choice could cause such commotion.

Nothing of leather, nothing of fur...

Which meant nothing for him or nothing for her.

Nothing to aim, Nothing to shoot,

Nothing that clamored or made lots of noise.

Nothing for just girls and nothing for just boys.

Nothing that claimed to be gender specific,

Nothing that's warlike or non-pacifistic.

No candy or sweets...they were bad for the tooth.

Nothing that seemed to embellish upon the truth.

And fairy tales...while not yet forbidden,

were like Ken and Barbie, better off hidden,

for they raised the hackles of those psychological,

who claimed the only good gift was one ecological.

No baseball, no football...someone might get hurt,

besides - playing sports exposed kids to dirt.

Dolls were said to be sexist and should be passe.

and Nintendo would rot your entire brain away.

So Santa just stood there, disheveled and perplexed,

he just couldn't figure out what to do next?

He tried to be merry he tried to be gay,

but you must have to admit he was having a very bad day.

His sack was quite empty, it was flat on the ground,

nothing fully acceptable was anywhere to be found.

Something special was needed, a gift that he might,

give to us all, without angering the left or the right.

A gift that would satisfy - with no indecision,

each group of people in every religion.

Every race, every hue,

everyone, everywhere...

So here is that gift, it's price beyond worth...

"MAY YOU AND YOUR LOVED ONES, ENJOY PEACE ON EARTH"

I have to run a 2001 nondiscrimination test because it was never done.

The ADP test passes. The ACP test passes. However, the Multiple Use test does not.

I know that in certain situations, you're able to "shift" elective deferrals from the ADP to the ACP test. I believe one of the requirements to shift is that you pass the ADP before and after the deferrals are shifted.

If I shift some deferrals from the ADP to the ACP, then the results of my Multiple Use test are a little better. It still fails, but the refunds will be slightly lower.

I'm trying to determine if it is acceptable to shift in this situation or not.

The ACP passes on its own. So I don't need to shift to pass the ACP. I can't find anything on this topic.

Anyone have any opinions?