I am single, reside in Calif, and for the year 2004 had an adjustable income of zero as I am back in school. At the end of Dec. 2004 I called and made a transfer (9,000) from my IRA to my Roth in order to take advantage of my zero income and therefore avoid having to pay taxes on the money transfered between these accounts.

Then on December 31, 2004 I made another transfer ($4,000) invovlving the same accounts from my IRA to my Roth IRA and thought I had requested the second transfer to occurre in the year 2005.

On April 15th,2005 I realized that both transfers actually were completed for the year 2004. This has created a taxable situation and I will owe income tax on the $4,000 transfer.

My question : Is there any way the IRS will allow me to reverse the transfer I made in error ? Or is there any other options or suggestions that may help in avoiding the taxes the will be incurred on the extra transfer?

Thank you.

ADDITIONAL INFO:

Account History. Originally was an Incentive Thrift Account with my employer opened approx 13yrs ago. I ended employment with the company in 2000. The Thrift account ( approx 36,000 )was rolled over into a Traditional IRA (30,000) and a Roth IRA (6,000) in 2002. In 2003 there was no activity in either account.

For years 2002 to 2004 I have been a student with zero reportable income.

If any other info. is needed please let me know . thanks !

We are reviewing and trying to streamline our FMLA process. There are some disagreements amongst the team regarding some of the info contained within the regs and what level of flexibility the employer has.

We currently offer the pay-as-you-go and catch-up payment options. Can we offer just one?

We currently allow the employee to decide which of our benefit they want to continue. Can we eliminate this as a choice and state that they all must continue?

Are long term care insurance premiums reimbursable from a health FSA?

Seems pretty straightforward but just wanted to check with all of you... Individual A owns 100% of the shares of Corp T. Corp T owns 100% of the shares of Corps. U, V, W, X, Y and Z. Looks to be a parent-subsidiary controled group under 1563(a)(1). However, wouldn't recent 5500's for each corp's qualifed plan (401(k)'s) show the same number of active participants, etc..... if they are properly being reported as a controlled group???? Thanks for the help.

Good morning,

Could anyone offer me some feedback into hiring practices at your fim.

I have only worked for 2 firms, and both have been small companies where interviewing and hiring happens within a matter of weeks, and decisions are made without having to go through much red tape. I am not familiar with having to work with departments, budgets, multiple locations, red tape, etc.

I have been interviewing for an out of state position for about 4 months. I have had some offers, turned some down, and narrowed my choice to three employers that I wanted to work for.

Unfortunately, I had offers from two of them, but it is the third one is making my head spin. Also unfortunately, it is the company I want to work for the most. The company has a great reputation in the industry and the people I have met at the firm are so incredibly smart and talented, I am so anxious to work with them.

I have done phone interviews with them, and traveled down to their office twice. I spent two full days in their office and met with the heads of three departments. They keep saying what a great candidate I am and that they would love to have me on the team. However, I havent yet seen an offer. There have been explanations why, including budgets, people being away on business, having to talk to other locations, etc. Two weeks ago, I visited their office again to meet with the department heads. I fully expected to leave the office with an offer. However, I got a "we'll be in touch." The weird thing is, they keep saying how great I am and how all the people in the office really want me on board.

In the meantime, the offers from the other two firms have come and gone. I had a deadline to accept them, and I turned them down, because of this firm that I really, really want to work for.

Is this normal? Could budgetary stuff really make an offer take a few months to go through? I cant think of a single reason that they would string me along, other than that they really do have budgets to work on.

Now I have another potential offer coming in. Its a good firm and a good offer.

At what point do I just walk away from something I really want?

A newbie question

If i roll a 401k into a traditional ira i understand there is no tax due.

What would be the tax implications of rolling into a roth?

thanks, dave

Does it make sense to borrow from a 401k to pay off credit card debt?

First, so that I don't have to "comb" the internet, is there anyone having a link to the 409A regulations with an interpretation?

Second, is anyone aware of sample or free plan documents covering deferred bonus arrangements? I have a pretty good document, but want to look at one that has been updated for 409A to determine if I need to scrap the one I have and get a new one.

Third, the document I have is both a Trust Corpus and an Adoption Agreement, similar to a Qualified plan. The actual agreements for the participants are based on that Trust/Adoption agreement.]

Thanks in advance for your comments.

A former client of mine has called me with an oddball question: one of his employees has his wages garnished to cover his child support. My client tells me that his new cafeteria plan TPA had advised that this can be considered as a DCAP expense and paid by the plan. They want to take the amount of the garnishment out pre-tax, and pay the support via the 125 account.

I've been out of the 125 world for a year or two, but I certainly don't remember anything like this in the regs. If I remember correctly, the employee can't even claim DCAP expenses for a child for whom he is not the custodian. I can think of three possibilities: 1). I'm getting senile faster than expected; 2). the regs have changed while I wasn't looking; or 3). my client is getting bad advice. What do you think?

Double checking. Am working on a client that adopted a 401(k) with the 100% of first 4% match. Semi-annual entry dates.

New participant comes in mid-year, defers 4% from entry date (until termination date) and gets matched 100%. Plan is Top-Heavy (except for the exception). Because of the Safe Harbor, I'm thinking I get the free ride from the Top-Heavy rules.

If an individual retired and transferred their 401(k), with basis, to their IRA, where is this basis accounted for on the 8606?

It seems TurboTax will not automatically create an 8606 for this transfer, even when block 5 of the 1099-R shows a pretax amount. So would this just be done on the side (out of TT) on the 8606? And where would you enter the after-tax amount....line 1 or 4?

And if so, I'd assume one would need to attach a sheet explaining this entry if the amount of the after-tax transfer exceeds the annual contribution limit...yes?

BruceM

I have been in the business for 29 years and I still come across questions that I consider "basic." I must tell you that the occurrence of such events make me extremely uncomfortable. In any event, allow me to ask a "basic" question.

ERISA §105 and §209 require that the plan administrator to furnish certain benefit information to a participant or beneficiary of a employee pension benefit plan. Basically the statute identifies three types of disclosures:

1)Benefit statement upon request in writing;

2)Automatic disclosure of benefit statement upon termination or break in service;

3)Statement upon filing of a SSA form as part of a Form 5500 filing.

After rereading the ERISA regulations after all these years, I distinctly get the impression that statement # 3 is different from statements #1 and #2. It would seem that statement #3 would be required to be distributed at the time the SSA is filed even thought the participant may have already received a statement upon termination.

I have always thought of statements #2 and #3 as being the same. Now I am having second thoughts.

I ask for your valued opinion. Do you treat statements #2 and #3 as being separate and independent?

John terminates from employment. He and and his wife Jane enroll in COBRA. Jane is having children with a man other than John, (they are still married - for now) can she add the children onto the policy?

My thought is that since Jane is covered under COBRA, then those children can be added to the policy however, they will not be treated as qualified beneficiaries since they are not children of the covered employee. If John and Jane get a divorce after the children are born, since the children are not qb's, would they be entitled to the 36 months of coverage that Jane would be entitled to?

I know an FSA plan is not required to file IRS Form 5500, if less than 50 employees are paricipating in the Health Care Reimbursement portion of the Plan. What are the rules if more than 50 employees participate in the health insurance plan and their premium payments are withheld pre-tax through the FSA Plan? If required to file IRS Form 5500, what attachments are required? Any additional guidance on IRS Form 5500 for FSA plan would be appreciated.

Thanks,

Joe

I contributed $3000 to my ROTH IRA even though I didn't have any income FY2003.

Do I need to do anything, at all?

Can i ask my broker to change that $3000 contribution to be for FY2004 instead of FY2003?

What are my options?

Thanks

A client has a profit sharing receivable of $100,000 for the plan year ending December 31, 2004. On February 1, 2005, the employer contributes $25,000 of the $100,000 receivable. The $25,000 is allocated to participant accounts pro rata based on the portion of the $100,000 receivable they are entitled to receive. The plan permits participant direction of profit sharing contributions. On April 10, 2005, the employer contributes the remainder of the $100,000 receivable (or the additional $75,000). The $75,000 is allocated to participant accounts pro rata based on the portion of the $100,000 receivable they are entitled to receive.

Participant A invested their portion of the $25,000 contribution (say $2,000) in such a way that on April 10, 2005, it is worth $2,100. Participant B invested their portion of the $25,000 contribution (say $1,500) in such a way that on April 10, 2005, it is worth $1,200.

Are partial employer deposits permitted? Participant A is upset because if the entire receivable had been deposited on February 1, 2005, she would have a larger account balance and Participant B is upset because if the entire receivable had been deposited on April 10, 2005, his account would be larger.

Also, is it possible for the employer to simply dump money into the plan, not allocate the money until the entire $100,000 receivable has been paid (under the facts in this case)? I recall reading somewhere that the IRS or DOL does not like unallocated contributions.

Thanks in advance for any comments/suggestions.

In the SEP answer book that is published by ASPEN publishers it mentions that all of an employer's plans including Section 401(a) plans and annuity contracts described in Code Section 403(a) must be included when determing whether the employer's SEP plan is top heavy? I think that 403(b) plans are not 401(a) plans but are 403(b) plans considered annuity contracts described in Code Section 403(a)?

1. Can you terminate a Simple IRA at any time?

2. Can you open a SEP IRA the same year the Simple IRA is terminated?

3. If a SEP IRA is effective 1/1/05, do all employees who have worked the past 3 years become immediately eligible? Or do they have to wait 3 years from the time the SEP was established?

One of our daily valuation plans provides for immediate distribution. The plan also deposits its matching contribution in September following year end. So, participants who terminated in 2004 will receive their matching contribution in September 2005.

If a participant had an account balance >$5k and the match deposited for 2004 will be less than $1,000, can the trustee cash out that balance, or do you always look to the original vested balance?

Also, how long do you honor distribution papework submitted by the participant? If a participant originally elected a rollover in 2004, is that election valid in September 2005 once the matching contribution is deposited, or must we get another form completed?

Our other concern with some of the distributions that occurred in early 2004 is that the terminated participant has possibly closed that IRA account.

Couple of questions. If a QB waives COBRA coverage, and then revokes the waiver, the employer can reinstate coverage on the day coverage is revoked. Is the employer required to administer in this manner, or can we retro-reinstate?

If we did reinstate on day waiver is revoked, this does not extend the end of their COBRA term, right?

Thx.