From the form 5500 instructions the IRS writes this:

A “one-participant plan” is:

(1)     a pension benefit plan that covers only an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated;

(2)      or a pension benefit plan for a partnership that covers only the partners or the partners and the partners’ spouses. Thus, a “one-participant plan” can cover more than one participant.

 

On the other hand, merely covering only one participant does not make you eligible to file as a “one-participant plan” unless you are one of the types of plans described above. 

A CPA is saying that his client who has 1 employee who works 10 hours a week and does not meet the 1,000 hour requirement would still be eligible to file a form 5500EZ.  Based on the above that would not be the case.

Simple answer.. EZ eligible or not?

Hi,

New potential client wants to start a 401k plan. Client is a day care/ pre-school located within a church. The church looks upon the day care as a "ministry" of the church. They use the same EIN as the church but their fiscal year is different. Is there anything special that needs to be done for the set up? Shouldn't they have their EIN?

Thank you!

Hello, this is my first post and my question I would like to pose is this:

Currently in our area, we only have 2 firms that we are able to choose from to provide a 401k. One is a A) SEC-registered firm that is not as established, and the other is B), a non-SEC registered firm (it used to be but decided not to) and have over 100 million in assets.  

I feel very uncomfortable going with the non-SEC registered firm because the SEC website shows they are nonexempt. (They claim they are not required to be since they are trust company that falls under the definition of bank.)  However the other decision makers don't see it as a significant issue. What am I missing here? It seems clear cut at least on this stance but they are willing to take the liability.  

401k plan excludes DOP comp only.  Can/should comp payments to 409a plan be included as compensation for 401k plan?

I know there is a correction method for when an employer maintains a SIMPLE Plan during a year or years when it becomes ineligible to do so.

Has anyone ever encountered a situation when an employer was ineligible to adopt a SIMPLE Plan from the outset but did so anyway and now, 10 years later, realizes there is a problem?

Any suggestions?

 

 

I am looking for a book that has sample forms, letters, amendments ect in it.

I knew of one many years back but can't find the name.  Does anyone know of a good one?

On a side note does anyone have a sample spinoff amendment they would be willing to share?

We are a small TPA firm located in Eastern Suffolk County, NY looking to work with another small TPA firm.  We are open to merging with or purchasing another small TPA firm on Long Island.  We would also consider other options, if presented.

If anyone is interested in exploring growth opportunities with us, please email TPAexplorer@gmail.com.

 

Single-member LLC dentist sponsored a SIMPLE IRA for about 8 years.  He sold his practice mid-2018 and all employees now work for the new dentist's company.   What happens to the SIMPLE IRA accounts?  Should notices be provided to the employees or to the custodian of the SIMPLE IRA accounts? Could the new dentist assume sponsorship of the SIMPLE IRA or would he need to start a new plan if he wants one?

Thanks!

We have been hired to file "unfiled/past" 5500EZ forms but we don't know which returns have been filed since 1996. We would like to find a way to get copies of prior EZ returns so we know which ones haven't been filed. We have called the IRS and EBSA without much help. Any ideas?

Background: A Canadian citizen, living in Canada, has elected to start an annuity from his US based 403(b). He has requested that the monthly payment be sent to his bank account in the US, rather than be mailed to his home address in Canada.

Questions:

1) Can the 403(b) plan treat the payments as though they were sent to a US person because the bank is located in the US and consequently apply withholding as though he is a US person?

2) If the payments were being sent to a residential address in the US for the same individual, does that change how we apply withholding?

3) If the answer to one of the above is that we can apply withholding as though he is a US person (married w/3 allowances), do the distributions get reported on a 1099-R or a 1042-S?

Thanks for your help!

Does anyone happen to have an excel spreadsheet template that would calculate match true up on a bi-weekly payroll basis, instead of an annual basis?  Match is .50 for every dollar match up to 8% and payroll is bi-weekly.

Say an employer has a self-insured group health plan. The same plan coverage, waiting period, benefits, etc. are offered to all employees.

If HCIs paid, say, 10% of the cost of coverage and non-HCIs paid 50%, we would violate 105(h). 

If the premium payments by employees remained the same (10% and 50%), but the employer imputed taxable income to the HCIs equal to 40% of the premium, does this solve the 105(h) problem? I know the typical solution in post-termination or COBRA subsidization is to make the premium payment or subsidy taxable. Does this same solution carry over directly to the continuing employment scenario?

Alternatively, the HCIs' base salary could be increased, but the employer wants to avoid having to increase base salaries for optics and other reasons. 

Appreciate any input.

Hi, 

Company has DB and DC (MP) Plans. They planned on making a db and DC contribution for the year ended 12/31/17. Inadvertently they deposited the DC contribution into the DB account (db plus dc contribution all went into db account, and was below DB Max). Can this be self corrected by transfering the money into the dc account? If yes, what if the transfer is made today, October 18th, as this is after 9/15?. Thank you

We are reviewing a 403b plan that has a service based employer base contribution.  The plan year ending 6/30/18 fails NDT due to the HCEs basically maxing out on their 403b deferrals and the NHCEs not deferring very much.  So the NDT failure is with the average benefits test.  If it's possible, the least costly solution would be returning a portion of the HCE 403b deferrals.  Is that possible and more importantly, within the rules??  Thanks.

If an employer uses the arrears method for collecting an employee's obligations for H&W benefits while they are on unpaid LOA and the employer elects to forgive the balance in lieu of collecting the balance is there any way to do that and avoid having to impute income to the employee? If the employee owes a balance and instead of collecting the balance the employer would like to forgive the amount do we have to include the forgiven amount as imputed income on the employee's W-2? Thanks.

Hello.  We have a new client - Client A - that was a participating employer in a MEP who has decided to leave the MEP and establish their own plan.  We have assigned Plan 001 to the client's new plan as it is the first plan being sponsored by client A.  A colleague is questioning why we are using 001 and not 002 for the plan.  Is our reasoning correct on the plan number?

 

 

Good morning to all, 

We have a takeover case in which we want to be sure we correctly identify the Key employees.  We are not sure because we do not know anything about trusts.  I know the following is convoluted but I am not making this stuff up!

The company was started by two brothers, who we will call Bill and Sam. Bill is the president of the company,  and Sam has passed away.  The ownership of the shares of the company are as follows:

24.7% belongs to a Q-TIP trust for the wife of Sam who is not an employee.  We aren't worried about this.

41.1% belongs to Bill.  That's a no-brainer.  He's an owner and President of the company.  Key and HCE.

Bill's 3 kids are on the payroll.  One of them owns 0.8% of the stock outright.  Another 15.9% of the stock is in a trust for Bill's 3 kids, who are treated equally under the trust.  To our knowledge, the trust and the percentages are irrelevant here.  The fact that the kids are on the payroll and their father owns 41.1% of the stock is sufficient to make all of them Keys and HCEs.

Now comes the part we are not sure about.

Sam, remember, is deceased. Sam's 4 kids are on the payroll too.  One of Sam's kids owns 1.6% of the company outright.  Then, as in the case of Bill's kids, 15.9% of the stock of the company is in a trust for these 4 kids and they share equally in it.  So one son has his own 1.6% that he owns outright plus 3.98% that he indirectly owns through the trust for a total of 5.58% of the stock being for his benefit.  His 3 siblings just have the 3.98% each that they own indirectly through the trust.

Are Sam's kids Key and HCE or not?  We don't know what impact the trust has on making this determination.  Our suspicion is that maybe the son who has the total of 5.58% is a Key and maybe the siblings who only have 3.98% are not, because they have less than 5%?  We'd much rather hear what the experts have to say than just go on our suspicions.

None of these children, neither Bill's nor Sam's, has a sufficiently high salary to be considered an HCE just on that basis.  None is an officer of the company with a sufficiently high salary to be considered a Key just on that basis.  It's all about the stock.

Your advice will be greatly appreciated.

 

 

 

 

 

 

 

 

 

I'm looking at a presentation from an actuarial firm that suggests a 12/31/18 FYE taxpayer set up a CB plan with a 11/30/18 plan year end.  The contribution for the 11/30/18 plan year end can be deducted on the 2018 tax return as long as it's made by extended due date.  Nothing new there.  The suggestion is to fund the plan year beginning 12/1/18 before 12/31/18 so that amount could also be deducted...giving two years deduction in 2018.  Of course, all later years would be "normal"  Any thoughts/comments on that?

The actuarial firm also promotes what I think is a very aggressive 401(h) plan so I'm a bit leery of anything they show.

Thanks,

Just discovered an employee with two 401K loans had paid off first loan a year ago. We received no notice of payment and employee did not notice it on loan history website. Twenty-nine overpayments were applied to the employees second loan without authorization from employee or notice. This is the second time the company we hired to manage the 401K has done this with an employee in two years. Is that legal? Employee would have preferred to stop making TWO payments when first  loan ended and continued on amortization schedule for the remaining loan. 

Seems also to be a breach of fiduciary duty as well as illegal.