Can I invest in a ROTH IRA even if I max out on a 401(K) plan?

If I max out on the 401(K) is it still possible to put the allowable amount to a ROTH IRA?

I wish to rollover my 401K Rollover IRA to a Roth IRA. I already have a Roth IRA consisting of after tax money (contributions, and conversions from traditional IRA's). Should I keep the 401K money in a separate Roth IRA from my existing one? I'm not planning on making any withdrawals until retirement age. Thanks.

Please help me. I am quite confused on one technical aspect of conversion to the Roth IRA. In particular, I need to know if the 10% additional tax on premature distributions applies if a taxpayer is older than age 59½ at the time of conversion. I am wondering mainly about possible distributions, within the first five-taxable-year period, of amounts converted to a Roth from a traditional IRA.

Several experts on the Roth IRA website specifically indicate that a taxpayer that old is not subject to the 10% penalty. However, IRS Publication 17 (11-13-98) does not mention an exception for age when discussing this topic on page 127. Nor do Form 8606 and its penalty instructions on page 6. Form 5329 does mention age 59½, but page 6 of the Form 8606 instructions also states that Form 5329 instructions should be disregarded.

Right now I have no such 10% penalty. Naturally, I would like to know the downside before I convert.

If a 5% owner participant in a profit sharing plan, DOB sometime in 1926, has not started taking his RMD as of today, what are the corrective measures that can be taken?

can you convert 401(k) funds into a traditional IRA and then into a Roth IRA?

Also, can you move the after-tax dollars in the 401(k) into a Roth IRA somehow?

An employer sponsors a DB plan with a non-integrated safe-harbor formula and a super-integrated PS plan. Both plans cover all ee's of the employer and independently meet the 70% 410(B) test. When doing the cross-testing on the PS plan, do the DB accruals need to be included in the 401(a)(4) calculations?

I am interested in know of any salary surveys (particularly in the Pacific NW area) indicating salary ranges for the position of Compliance Specialist (10+ yrs of experience). Responsibilities include handling technical questions from Plan Administrators, Producers, and clients; controlled group determinations, review and approval of plan design, drafting documents & preparing IRS submission; high level testing & resolution of compliance issues. Any input is appreciated.

I am 55 and will retire in 2 years. I am in the 28% tax bracket. If I convert a portion of my regular IRA to a Roth before 12/31/98 as recommended by the Forbes calculator, I will owe a lot of taxes over the next four years. My tax rate after retirement will be 15%. This means that I will pay taxes at the rate of 28% for the first two years, and 15% for the next two.

I will not need to withdraw from my Roth for at least 10 years. WHY SHOULD I CONVERT THIS YEAR? I plan to convert a portion each year AFTER retirement, if that is allowed. I propose to convert 1/4 of the recommended amount by Forbes each year for four years.I will pay tax all four years at the 15% level. tax, for the same dollar amount of conversion. Even accounting for 10% annual market increases, the total taxes should be less. What do others out there think?

Thanks,

Walt T.

Previously, I asked a question about compensation and limits for LLC/LLPs and partners. I now have a more specific question....If a partner receives two types of compensation from a partnership (in particular a LLP), what compensation is used for their SEP contribution limit. In my case, the partner receives a W-2 with significant compensation, as well as a K-1 from the partnership as a limited partner (with some self-employment or "flow-through" earnings). Does the partner get to receive a contribution on the W-2 compensation - or is it limited to the SE Income from the actual partnership operations? I realize on the SE Income (absent the W-2 compensation) that the employee/partner is subject to the "circular" formula for contribution limit purposes.

[This message has been edited by derek (edited 12-07-98).]

I am looking at Q 8:19 of the Simple, SEP and SARSEP Answer Book by Panel Publishing and have a question. If a SEP is top-heavy, and the employer usually makes contributions of 15% of pay, can they just treat 3% of the contribution as a top-heavy minimum (made for all employees) and thus not have to make any additional contributions? Q-19 indicates that the minimum required top-heavy contribution may be made to all employees (assuming no other limits are exceeded).

We have taken over the administration of a 401(k) plan which offers company stock as an investment option (publicly traded). The prior TPA did not maintain a cost basis on the stock. I believe that I need a cost basis because the plan allows for participants to take distributions in company stock. I also believe that if an employee takes the stock and does not roll it over, they are only taxed on the cost basis until they actually sell the shares. Is there a general formula for me to use so that I can arrive at a cost basis and then calculate it on an ongoing basis ?

Thank you.

Forgive me if this topic has already been discussed.

Does anyone know if the S-Election of a corporation is recinded if a loan is made to an owner-employer of the S-Corp? I swear I read that somewhere years ago.

A NEW BUSINESS WAS STARTED AND IS PART OF A RELATED GROUP OF CORPORATIONS. EACH COMPANY MAY DECIDE ON ITS OWN DISCRETIONARY PROFIT SHARING CONTRIBUTION (AS LONG AS COVERAGE TEST PASSES). IF PART OF THE NEW COMPANIES START-UP PAYROLL WAS PAID FROM ANOTHER RELATED COMPANY AND THE NEW COMPANY REIMBURSED THE PAYING COMPANY, WHOSE COMP IS IT? I FEEL IT IS THE NEW COMPANY'S COMP FOR CONTRIB ALLOCATION PURPOSES BECAUSE THAT IS WHERE THE HOURS WERE WORKED.

Assume 12/31/98 yr end testing of a plan; and, during 1998, part of the plan unionized and remained in the plan. The 1998 test will have to be split for union and non; but, the question is: can the prior year NHCE ADP%(which was for the entire group) be used for both groups? or do you have to go back and recalculate what would have been if the groups were split in prior yr? Thanks

Retired self employed tax preparer, with net income on Schedule C approx 2,000. Should I open Roth IRA . Am already receiving annual distribution from 2 IRAs

I have data on the IRS regulations, but am looking for sample administration guidelines. Is this program administered similarly as a Section 125 or 129? Do employees make an annual "election" and submit their qualified expenses? Can anyone direct me to some other resources on this hot topic.

My understanding is you cannot terminate a TSA plan. I have attended several conferences where the IRS and DOL have confirmed this. Is anyone aware of a change in this. I have a hospital client who has an insurance company tell them they will take care of it, so the hospital doesn't have to worry about 5500 filings or J&S signatures. The hospital is merging with another hospital which has a cash balance plan and voluntary tsa program. My client maintains an ERISA tsa and wants to terminate it. I told them they can't terminate or merge with either of the plans maintained currently by the hospital being merged into. Please let me know this has changed.

Hello!

I was wondering if anyone has found or knows of an online subscriber program where folks could sign up to view reference materials on retirement plans (401k, 403b, pension, etc) using their Web browser... this would really be an ideal way for my department to find information. A professional Web developer, combined with a knowledgable Plan-level staff, would be an incredible thing! Up-to-date information, e-mail newsletters, all that good stuff. Specifically what I need is reference materials, the ins-and-outs of Retirement Plans in every shape, color, and size. Any ideas?

I am preparing a letter to communicate the changes imposed by IRSERA '98 on hardship distributions. Unfortunately, information is scarce and contradictory from my sources. Therefore, I would appreciate any corrections to information that I provide and answers to my questions. I understand that only the elective deferral portion (excluding earnings on the elective deferrals, employer contribution sources and rollover/transfer accounts) is no longer eligible for rollover beginning 1/1/99, and therefore, exempt from the 20% withholding requirement of the Unemployment Compensation Amendments of 1992. Should 10% be withheld ? Should the hardship withdrawal form include an election to waive or decrease the withholding? Last, any suggestions for sources of information?