Taxpayer found out that his AGI was too much to make a Roth contribution for 2018 and has an excess contribution of $4,000.  He filed his 2018 income tax return on time, but there wasn't enough time to get the excess out by 4/15/19. Trying to decide to take a distribution or change the contribution to 2019.

If he takes the distribution there is no 2018 income tax affect because he already paid income taxes on the $4,000. I think the earnings would be taxable in 2019, year of distribution. In this case I think he needs to re-file his 2018 income taxes to show the $4,000 excess.

If he changes the contribution to 2019, I think he would still need to re-file his 2018 income tax return because it would still constitute a distribution. 

Is there a way to fix this without having to re-file his income taxes. Thank you.

I have 5 policies that are written to me and my siblings and the company in which it originated from has been merged, shut down, and umbrella-ed into so many companies till no one now wants to give us our money for our father's policies; or they are claiming they can't find the policies because each company has originated new policy numbers.  I got in touch with Alabama Department of Insurance, and they claim that it was merged or umbrella-ed into Colorado Department of Insurance.  They are 14,000 to 16,000 policies; each one on outside of policy has American Prefered Life Insurance . Profit sharing life insurance contract. How and who can I contact?  I really could use some help.

We don't do a lot of large plans so sorry if this is something we should know.  But here's the situation:

We've handled a MassMutual plan for quite a few years.  Their fee and compensation report used to include an item for Indirect Compensation paid to the broker/dealer firm, so we would include them on the list of those receiving eligible indirect compensation.

Somewhere along the line, they started to report fees paid to themselves as direct comp, and stopped showing the indirect comp paid to the B/D.  We kind of shrugged our shoulders and didn't include the B/D at all on the Schedule C.  

So now I'm wondering if that is correct (if B/D comp isn't indirect comp I don't know what is).  I have exchanged emails with our service rep and she punted to their compliance department, which means we may or may not get a response, and it may or may not be adequate.  

Anyone else completing things differently, or otherwise have comments?

We had a company acquire another in 2018 and they both maintain separate plans. They now are a control group. The one that acquired the other utilizes top-paid group while the other plan does not. I know we are supposed to be uniform in how these are tested but wasn't sure if it's okay to test separately during the acquisition year.

The series of events is as follows: 1) the parties divorce, 2) a QDRO is filed with the court, 3) the parties re-marry each other, 4) participant dies, 5) widowed alternate payee  submits QDRO to the Fund for the first time after his death.

My only question is: does the existence of a valid QDRO nullify the J&S benefit to the AP?  Does she get both? 

Thank you

Just looking for an opinion on this.  The Plan states that an "actively employed" participant is eligible for an in-service definition once every 12 calendar months.  If the employee is currently out on disability, would he/she still be classified as actively employed (assuming they are expecting to return to work)?

Thanks in advance!

I have a one owner company with K-1 income and the CPA is calculating the maximum that can be contributed on the IRS SEP,401K worksheet.  The Plan document says that the contribution is integrated with SS at 100% of the TWB, 4 tier.   There is one non-owner is under the SSTWB.  When calculating the contribution for integration, can the contribution % to the non-owner be less than what the maximum that owners contribution calculation is? For example, owners maximum contribution calculated is $29,000, which is 20% of his net earned income.  The employee is getting 6%.  Is that allowable?

Trying to learn what software providers are available to import client census and produce a side by side comparison of contributions to participants based on plan and contribution types for use in proposals.

Have already found one with EBG Systems that I haven't reviewed yet, and also one for a Pension Online, that I signed up for a 14 day free trial.

Does anyone know of others used, and which ones are the most preferred based on ease of use, most features, and lowest costs?

Thanks

We want to combine a match source and a profit sharing source that are frozen and have not been used for a long time. There is also an old ESOP source that has no employer stock in it , it's all OIA account. Is there an issue with combining that with the other too?

Can a plan make a profit sharing allocation, for 2018, after they've filed their taxes for 2018?

The calendar year plan has no intention of amending their 2018 return, so we'd be looking at deducting the 2018 allocation for the 2019 tax year. I know they'd be subject to the 25% deductibility for 2019 (considering all employer contributions for 2019 plus the 2018 profit sharing allocation).

Is it possible to allocated the PS for 2018 but deduct and report it in 2019? If so, what other compliance tests would the profit sharing need to be included in?

This may be a dumb question, but does the grace period for SIMPLE employer eligibility apply if an eligible employer started a plan mid-year but then employed over 100 employees with compensation over $5,000 later that same year?  For example, the employer had fewer than 100 employees with compensation exceeding $5,000 in 2014, started a SIMPLE in the middle of 2015 (eligible for 2015 based on prior year employee numbers), and by the end of 2015, had over 100 employees with compensation over $5,000.  The employer would be ineligible to maintain a SIMPLE for 2016 in the absence of the grace period.  Does the grace period not apply because the plan was maintained by an "eligible employer" for less than a 12 months (due to the mid-year start date)?

The statute says, with regard to the grace period -- "An eligible employer who establishes and maintains a plan under this subsection for 1 or more years and who fails to be an eligible employer for any subsequent year shall be treated as an eligible employer for the 2 years following the last year the employer was an eligible employer."

So in other words, my question is does the requirement to have maintained the plan as an eligible employer for 1 or more years mean that the employer must have maintained the plan as an eligible employer for at least 12 full months, or is it possible that this one-year requirement really refers to more of a "plan year" concept such that maintaining the plan as an eligible employer for a short plan year (as a result of establishing a plan mid-year) would qualify as maintaining it as an eligible employer for "1 year"?  

Has anyone ever run into this?

What is the deadline for a nonprofit organization to make an employer match or nonelective contribution to a 457(b) plan for a plan year?  

I had to file a rule to show cause to get my ex husband to sign the first of 2 Qdro’s. He is on record with the courts (Delaware) saying he will sign the second Qdro, however he is refusing to sign it. 

Am I correct in thinking he is in contempt of court?

Do I have to file a second rule to show cause or can I file the final Qdro with my signature and note he refused to sign. 

The divorce is final and the stipulation resolving ancillary matters filed. 

Thank you. 

A 5% owner of a law firm is approaching age 70 and would like to be bought out of his ownership share to avoid having to take RMD's from his account balance?  Would this work?  For example, is there a "lookback" period the IRS has on a situation like this?

Also, is there a separate IRS table for calculating RMD's from a 401-k as opposed to an IRA?  Any help appreciated!

Corbel just sent us an email that they are adding a "collapsible" Adoption Agreement where the unselected options will be suppressed.  Does anyone have more information on what that will look like?  I assume for example a non-safe harbor plan, the whole safe harbor section will be suppressed.  But their email was a little sparse on detail, perhaps because they haven't figured it out yet.

Just curious what others know about it.

I'm also concerned about losing familiarity with all of the options available for my own selfish purposes (i.e., being an expert on what my own document can do which I have due in part to seeing it entirely all the time).

I have a client whose current recordkeeper does not charge any annual loan maintenance fees for outstanding loans.  The client is now considering moving to a different recordkeeper, one which DOES take annual loan maintenance fees.  For those loans already outstanding,  is a fee disclosure to participants valid to then start charging annual fees to their loans after conversion?

A fully vested NHCE participant, age 59.5, requested an in-service distribution last year of their entire account from a 401(k) plan, to do a direct rollover to an IRA. The plan sponsor approved. However, the plan does not have an in-service option at age 59.5, it has age 60 for some reason. They did not reach age 60 until this year. They currently do not intend to pay it back to the plan.

EPCRS, Rev. Proc. 2019-19, 6.06(4): Make-whole contribution. To the extent the amount of an Overpayment adjusted for Earnings at the plan’s earnings rate is not repaid to the plan, the employer or another person must contribute the difference to the plan. The preceding sentence does not apply when the failure arose solely because a payment was made from the plan to a participant or beneficiary in the absence of a distributable event (but was otherwise determined in accordance with the terms of the plan (for example, an impermissible in-service distribution)).

To me, the above (bolded) means the employer does not need to repay the amount to the plan. Let me know if you disagree.

The question I have is the tax reporting of the distribution. Was it actually rollover eligible? Or because it violated the plan's in-service provision, is it to be reported as taxable? Would the answer change is this was distributed in error before age 59.5 and the payout included deferral accounts?

The document not withstanding - can you roll an IRA into a 401(k) plan?  I seem to remember that you can’t.

I am an employee who has a sum invested in an unfunded NQDC plan with my employer.  The plan document states distribution triggered by separation will be distributed in 5 annual (yearly) payments.  For obvious reasons I would prefer distribution to be extended to smaller annual payment over a greater time period.  For example if sum held in NQDC plan balance at separation equals $1M it will be distributed in 5 annual payments of $200K.  I would prefer 10 annual payments of $100K or 20 annual payments of $50K.

If in principle both the employee and employer agree to this, can it be done?  I am aware of the risks due to the plan being unfunded and extending the time from 5 years to longer.

Hello,

I have a participant trying to designate their children per stirpes as the primary beneficiary using a non - standardized prototype plan document.

Participant specifically writing on form  My Children - Per Stirpes same terms and conditions as the XXX Trust Dated XXX 

Is this allowed? My document simply states that it must be an individual or trust and while the individual is a person how would we determine who those surviving heirs would be? Would that be the executor of the estate?

Thoughts?