I have 2 401(k) plans from previous employers. I am trying to decide whether I should roll them into my new 401(k) from my current employer or can I put them into an IRA. If I put it in an IRA I want to know if the Roth is the best way to go.

Since I missed the deadline for spreading the taxes out over 4 years would I be taxed at the end of next year for my income taxes or could I have the taxed money come directly out of the money that is being transferred? (ie: if I have $30,000 can I take that and only transfer over the $21,600 which is left over from the 28% taxing?)

Can anyone help with this. If I need to clarify please let me know.

With regard to non-exempt employees, is the employee's signature required on each time record? Where can I obtain legal cites to this requirement, if any?

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M.Elena Hogan

I have two questions. Is there a maximum number of different employee categories we can established for a tiered P/S plan. (I have a company that would like to have 10.) Can we categorize employees by years of services; such as Tier #1 - employees with less than 5 years of services, Tier #2 - employees with 5 years to 10 years of services and Tier #3 - employees with more than 10 years services and so on?

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I own an annuity, and I have some questions.

1. Is my annuity safe from Creditors? 2. If I get sued can they take it from me?

3. I can transfer it to my wifes name, if I do that I will have to pay taxes on the earnings.Any other ways to get around this?

4. Any suggestions or help will be greatly appreciated.

If a plan sponsor fails to remit 401(k) contributions to the trust within the limits imposed by the DOL Regulations (the earlier of the date they can be reasonably segregated or 15 days after the end of the month in which they were withheld), has the plan sponsor incurred a prohibited transaction?

Assuming that the 401(k) contributions were later deposited to the trust, how is the 15% prohibited transaction tax calculated?

I currently have a client who wishes to amend a regular Profit Sharing Plan to a Safe Harbor 401(k) plan. Since we missed the March deadline for the notice, could we still amend the plan because it never had a 401(k) provision? What about an existing 401(k)? Can you still amend them later in the year provided the plan year is at least 3 months. Would I have to amend the plan year and create chort plan years to accomplish my task? I would appreciate any feedback.

I would like to introduce this benefit to the employees of my company (approx. 175) and am currently researching the best way to implement the policy. Because we are small, I will be handling the administration in-house. Any advice from those who also administer would be greatly appreciated. How much time per month does it take? Problems/concerns I should be aware of as I launch? Thanks very much for your help!

The owner of a business sponsoring a 401(k) plan for which he is the trustee segregates his account balance and direcst investments. Now he wants to purchase his mother's farm as a directed investment. Sounds like a violation of 4975 to me. Any other opinions? Thanks.

Taxpayer names Spouse 1 as beneficiary of IRA. Taxpayer divorces Spouse 1 but does not change IRA beneficiary designation. Taxpayer dies. Apart from any divorce decree or property settlement agreement which may have addressed Spouse 1's rights to the IRA, is there anything in §408 or Regs thereunder such that beneficiary designation is void by operation of law? Does answer change if taxpayer remarried prior to death? Pretty sure that Spouse 1 gets it, but just wanted to see if anyone else had run across anything different.

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We are in desperate need of finding training for an existing employee for in-house Cafeteria Plan Administration. We have an existing plan but are lacking an Administrator. Where do I find classes/seminars for Cafeteria Plan Administration?

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We are in desperate need of training for an existing employee to become a Cafeteria Plan Administrator for our existing Cafeteria Plan. Where can I find a list of available classes/seminars to put us on the right track?

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In a few months we will be upgrading to the 5.0 version using Oracle.

Once question we asked that came up today (Have not asked our rep yet) is this:

We have customized a lot of reports, benefit statements, summary, etc.

Does anyone know if these reports will still be usable, and if not, will there be some type of converstion available so we don't have to re-do all of them.

Any input is appreciated.

Is there any restriction on permitting the use of options (call options, put options, or LEAPS) in a qualified retirement plan? The owner of a business thinks that options are the greatest thing and wants to open the plan to segregated accounts. Of course, as the administration firm, we think he is crazy and we may elect not to provide services.

Anyway, the best outcome is for me to find some statutory or regulatory reason why this might not be a good idea. Any thoughts on this??????????????

Thanks.

After reading the text of many of the messages on this board, I can see that you are all professionals. Can anyone help a layman with a question?

As a result of leaving my employment under a separation agreement in 1997, I received severance pay. The amount was divided into two payments, the first of which was classified as severance pay. It was paid to me in 1997 and included as wages in my W-2 for that year. Normal withholdings were made and I reported the total W-2 amount as taxable income for 1997. I also made a direct roll-over from my 401K account at the company into an IRA in 1997.

In 1998, my previous employer made the second (and final) payment to me which was specified as compensatory damages under the terms of the separation agreement. No social security or income taxes were withheld from this payment. This 1998 payment was reported on a Form 1099-R, with the only entries being the dollar amount in Box #1 and the Distribution Code "7" in Box #7. The Distribution Code "7" indicates that this was a "Normal Distribution". No other boxes on the form 1099-R contain entries.

How do I report this 1998 distribution? Is the amount eligible to be rolled into some sort of tax deferred account?

Other possibly relevant information: I am 37 years old, have been a full-time mom since leaving my job, rolled my traditional IRA to a Roth IRA this year, and received the 1998 payment in question in January 1998.

Any advice would be most appreciated!

Thanks!

Is it possible for a new corporation to set up an IRA with an initial eligibility of no service/no comp limits and then change it to the basic 2 years/$5,000 and reasonably expected to earn $5,000 in the current year? I have a client who started business in Jan. 1999 and will start taking salary in April 1999. He has not hired any employees yet, but will later in 1999. He wants to become eligible as soon as he starts to take salary but wants any new hires to wait the two years. (I know, it doesn't sound very non-discriminatory, does it?) I was unable to find anything in my research on amending a SIMPLE IRA for more restrictive eligibility requirements. Thank you.

Everytime we use a Roth IRA Calculator on the internet, it shows that we would not benefit from a Roth, we should go with a Traditional. We don't have a 401K, is that why we should go w/ a Traditional, since it's tax deductible? Any suggestions?

Is there somewhere I can use stock only for a ROTH. I do not want Mutual Funds, and want only stocks that I like, that have a DRIP.

Please suggest somewhere, or is what I want not possible.

Thanks,

Norm

Every thing I read states that if you are married filing separately, you are not eligible to convert to a ROTH and use the 4 year tax pay period.

If you are married, but did not live with your spouse at any time during 1998, can you do the conversion if you file separately. I was legally separated during 1998 which still leaves my status as married.

Thanks for any response

The definition of compensation for S/E individuals relating to SIMPLES is different than that of qualified plans. The SIMPLE definition found at IRC 408(p)(6)(A)(ii) refers to "net earnings from self-employment" (line 4 on Schedule SE)

It then goes on to say "without regard to any contribution under this subsection"

What does "without regard" mean?

Without regard - therefore ignore the SIMPLE matching contributions as if they are not made (i.e. include the matching in eligible comp to determine the matching)?

OR

Without regard - therefore back out the SIMPLE matching contributions to get net comp - similar to the normal S/E calculation?

The normal S/E calc is determined by following IRC 401©(2)(A). In section (iv) it states "without regard to items which are not included in gross income for purposes of this chapter (401). Here it appears that "without regard" means back out the qualified plan contributions to get net comp to determine the qualified plan contributions, in other words the usual circular calculation.

In the IRA Answer Book (Gary are you out there?) it appears that they interpret 408(p)(6)(A)(ii) "without regard" to mean to include in eligible comp those SIMPLE matching contributions.

Anyone covered this ground yet?

I understand that when determining S/E comp there is no requirement to back out 1/2 of the S/E tax as the earned income definition in 401©(2) does not apply to SIMPLEs.

[This message has been edited by Dawn Hafner (edited 03-23-99).]

Can someone offer some explanation to question #11 from the 06/04/98 exam?