Form 5500-EZ wants to continue mailing in paper forms. Owner says he mailed it in on 7/31/18, it was not extended.

He has received a $250 penalty letter for being late (10 days) and cannot find or remember if he mailed it certified.

Question: He did extend his Federal taxes. Seeing as he cannot show evidence of mailing it in timely, can he amend as filing under extension to remove the tax penalty?

Incidentally I find it odd that if he mailed it in 7/31 as said, that the IRS would mark it 10 days late.

One person plan, never hired anyone, no intention to hire anyone, so he is the only participant in his plan. He would like to take out his first loan. I recommended interest rate of prime as reasonable. He wants to know if he can take the loan with zero interest. Is that possible? If not, I've never used a rate below prime, is there something, ie prime-1?

To allow a convenience in collecting the assets of a small estate, some States’ laws permit an affidavit in which one claims she is entitled to the decedent’s property.  Under a typical law of this kind, one might collect up to $50,000 without any court-supervised proceeding.

If a participant dies with no surviving spouse and no other designated beneficiary, some retirement plans provide that the participant’s estate is the “default” beneficiary.

If a plan you administer or serve is in this situation, is the plan willing to pay a taker based on a small-estate affidavit?

If a plan is willing, does the administrator use any extra steps to manage the risk that an affidavit is false (or even innocently incorrect), leaving the plan exposed to claims of the estate’s beneficiaries or heirs?

Or does a plan refuse to pay on a small-estate affidavit?

BenefitsLink people, what are your experiences?

Question,

it is my understanding you can withdraw from a 401k penalty free at 55 if you retire from your job during the year you turn 55.

question, my wife left her job when she was 53, however she will receive bi-weekly severance up until the year she turns 55, her 401k funds are still with the same plan, will she be able to collect penalty free in the year she turns 55?

any help would be appreciated!

Safe harbor match per payroll.  Plan excludes bonuses and vacation pay.  Plan is projected to fail 414(s) test for 2018.

I believe we have to amend plan to include some of the excluded pay.  Question is:  can we amend to include excluded comp for SOME of the employees, not all, under the 11(g) provisions.

Any other ideas?  Thanks!

I have been asked to propose a 401(k) Plan for a business (LLC) that covers a family (father, mother, and child) group. The owner wants to set up the plan solely for the benefit of his daughter, who is an employee of the company and receives compensation that will be reported on a W-2. He and his wife do not anticipate utilizing the plan for themselves.

My question is that if this plan is set up, does the plan file a Form 5500-EZ or the SF Form? The Form 5500-EZ is "Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. Would the EZ apply because the daughter is an owner by attribution? Or, since she is not an actual owner or their spouse, is the 5500-SF the form to file?

Thanks for any replies.

In a qualified plan, an employer could not say have a 3 year vesting period apply to each year's contribution, which could for example have an employer with 20 YOS but would not be vested in that year;s contribution until she had 23 YOS.  

But if this were a church plan or other non-qualified plan, that type of vesting is acceptable, is that correct?

Per our subpoena, we need to produce a large amount of emails to an auditor; over a few hundred, easily.  How have you guys produced emails in the past?  I can pretty easily get the totality of messages in an mbox format, or .EML, but I'm concerned we're going to need to produce as PDFs, which is going to take an absurd amount of time since batch export to PDF, frankly, doesn't work well.  

I appreciate any input you all may have, as I'm getting pretty concerned.  Our email is housed with GMail, but I can import to Thunderbird pretty easily and export that way, as well.  Thunderbird doesn't export attachments with PDF, however.

I have a client that set up a retirement plan in October 2018. One of the employees makes $400,000 and had already contributed to his deductible IRA in early 2018. Since the employee is eligible for the plan, does this make his IRA contributions made in 2018 retroactively non-deductible?

403(b) Plan sponsor wants to start offering a discretionary match in 2019.  The formula they are considering is dollar-for-dollar match up to $250, determined each quarter.  Participant's could received a maximum match of $1,000 for the year.

They want to throw in a twist:  They participant's can take the match either as a contribution to the plan or have it paid to them as cash each quarter.  Is that acceptable?  I think we could try to do something like this if it was pertaining to a PS contribution and we have each participant as a separate rate group.  But for a match, can that option be available?

Thanks

I have a question on what if any amended 1099R is required in the event the plan issued a premature in-service distribution of the vested account and the participant rolled it over. The Trust will be expected to issue a 1099R with the coding for a direct rollover, however this was not an eligible rollover and the participant is being notified per EPCRS 2-8-52 Section 6.06 that the overpayment is not eligible for favorable tax treatment. Does the recordkeeper issue 2 1099R's with the first being the direct rollover and then the second one being a correction showing the full amount of the distribution as taxable? It was a 2018 distribution and the 1099R will be issued in January 2019 however the distsribution has been made and the 20% tax withholding was not taken. So I would think the recordkeeper should issue a corrected 1099R. The other option is for the recordkeeper to contact the IRA custodian, but that approach does not seem as clean. Has anyone worked on this before or received IRS direction?

Thanks!

Just wanted to make sure I've got this right. IF someone qualifies for this, it is a deduction taken on the individual owner's 1040. In other words, for unincorporated owner you would calculate Schedule C income and corresponding contribution as usual, and THEN, when they file their 1040, they would take an additional deduction from the otherwise taxable income (if they qualify).

I have a client whose assets are in a brokerage account. The owner took a loan and never made payments. They apparently never intended to and now  want it defaulted.  I don't have confidence she is going to have a 1099R produced even though she said that's her intention.  My question is: What are the ramifications/fixes for a defaulted loan on a brokerage account when a 1099R is not done?   We do utilize Penchecks, but that may result in 2 1099Rs. 

Thank you in advance-

Hi,  We do 5500s for some of our Health and Welfare clients.  I have a plan where the number of employees benefitting under the H & W programs as of the beginning of the plan year is 80.  Prior year we had over 100 on the first day of the plan year and filed the 5500.  Am I correct that no 5500 is necessary for current year since number of employees benefitting on first day of year is under 100?

Thanks for any help.  

Group Health Insurance - assume small employer not required to offer health insurance.  If it does, is it allowable to require the employees to pay say 25% but provide the owner 100% employer-provided coverage 100% - presumably outside a cafeteria plan?  Would the answer be different for a large employer over 50? 

Cafeteria Testing - when health insurance plan are offered by employers, they are almost always provided under a cafeteria plan so that the portion paid by employees can be withheld on a pre-tax basis.  My question is - what is included in the 25% concentration test?   I'm reading that an "employer contribution" must be included.  Is an "employer contribution" an actual dollar amount funded to the cafeteria plan to help pay for selected benefits?  Or could it also mean the premium portion paid by the employer (presumed to be outside the cafeteria plan?)

Thank you

Tom

Divorcing individual has a defined benefit plan (government) and a pension valuation was prepared by a company.  The pension valuation company used "customary" factors in performing the calculation.  The PV of the pension prepared by the company was $2.1 mil.  The pension plan calculates the PV of the pension  at $1.3 mil.  Clearly, a large discrepancy.  Does anyone know if an argument could be made to use the lower value since that is how it is valued by the plan?     

We represent a church that is exempt from ERISA that filed a Form 5500SF for a funded health plan.  They should not have filed and now we are trying to figure out how to notify the DOL.  If we simply stop filing, the DOL will probably contact us thinking that we should continue filing.  We were thinking about filing an amended return and listing Code 4R on Line 8b but the funding never really changed.  Another option would be to file an amended return and mark it final but then you have to say there were no participants and no assets which really isn't the case either.  Bottom line is how do we get off this roller coaster?

Regarding Code Section 409(p) “prohibited allocations.” An S Corp ESOP provides that HCEs who are disqualified persons for 409(p) purposes (or reasonably likely to become disqualified persons) are not eligible for the annual ESOP allocations. This helps the Plan with 409(p) compliance. Can the Plan Sponsor give an HCE affected by this provision a taxable bonus, in an amount equal to what would have been the ESOP allocation, without any effect on the 409(p) test? The Plan Sponsor could not provide for the allocation under a different qualified plan (it would be treated as an allocation under the ESOP, affecting the 409(p) test), but if it is a taxable bonus—no tax-deferral element at all—thinking it might have no impact on the 409(p) test. Thoughts?

I have a client that owns 1) 100% of a Schedule C construction company 2) 50%/ 50% with another partner of a company that runs the management functions of the construction company and 3) 50%/ 50% with the SAME other partner of an unrelated independent living center.

The owner wants to set up a deferral-only 401k plan covering the 1) Sch C Construction company and the 2) management company (as an affiliated service group).

Does the addition of the management company as an affiliated service group extend the control group requirements to it as well? In other words, by including the management group, are we now required to include the 3) independent living center because it is a control group with the company that was brought in as an affiliated service group?

I'm running up against an issue that I've never had before.  The financial institution requires the Plan Trustee to sign off on any distribution.  We have a terminated participant who has requested a distribution of his account (which includes 401(k) deferrals) and it appears that the Trustee is refusing to authorize it.  I'm not sure if there's a reason behind it, bit what are the ramifications if the Trustee refuses to ultimately approve it?

Thanks in advance!