Here is the situation. Owner of LLC from Jan 2013 to current. NO employees. In September, 2013, purchased another LLC that has employees. Can the dr. make a SEP-IRA contribution under her single LLC for income earned BEFORE she also became owner of the LLC with employees? Based just on her January, 2013 to September, 2013 income.

Since the type of work she is doing under her solo LLC and the one with the employees is the same and she is 100% owner of both, I would think that in future years she cannot make that deduction without being discriminatory. But for this split year and her income earned prior to owning other business is what I'm just not sure of

Thank you!!

Is 4.25% still considered reasonable for a participant loan from a 401(k) plan?

can canadians participate in US 401(k) plans? would they have to have us source income? can a canadian working for a us company being paid in canadian dollars participate in the plan? can a canadian being paid in us dollars participate? does anyone know the key issues when dealing with canadian citizens?

The IRS indicated on its website on 3/27/2014 that it expected to issue "most opinion and advisory letters for the latest round of pre-approved defined contribution plans on March 31, 2014." But so far, none of the TPAs I have spoken to have received their letters yet. Has anyone else received their opinion letters?

http://www.irs.gov/Retirement-Plans/New-Two-Year-Period-to-Adopt-Restated-Pre-approved-DC-Plans

Stupid question, but I'm not all that familiar with these plans.

Let's suppose that you have a cafeteria plan, that allows salary deferrals for vision and for dental expenses. Not a "wrap" document.

The plan also provides for automatic withholding of health insurance premiums, UNLESS you elect out of it.

My question is this: for those people who do NOT elect out of the health insurance premium being withheld from their pay via the cafeteria plan, (and don't participate in withholding for the dental or vision) are they counted as "participants" in the cafeteria plan? They are already reported as participants in the health plan 5500, so it would seem to be "double counting" to also count them in the cafeteria plan 5500?

I'm not certain the regs actually support this, but by the same token, it seems reasonable. Any opinions? It's a big deal, because if they don't have to be counted, a lot of cafeteria plans will be below the 100 participant count and won't require filing.

Thanks!!

Do voluntary aftertax contributions count toward 402(g) limit?

Can they be converted to Roth?

What does everyone suggest to clients as a guideline for the appropriate amount of fiduciary liability insurance? I know there are many factors to consider, but for a fairly standard $8 million plan we would usually suggest a policy for about 10% of assets. Having a hard time finding any opinions on the 'right' amount of coverage. Seeking opinions!

Here is the situation:

3 Plans:

Plan A: Regular plan

Plan B was a safe harbor plan but terminated effective 3/31/13. Participants started participating in plan C effective 4/1/13.

Plan C: was part of Plan A until 4/1/13

If plan B decides to test separately from 1/1/-3/31. Does HCE mandatory aggregation apply? In other words, do I need to combined the HCE comp/contributions made to plan C in the test of Plan B and vice versa?

Anyone know where I can get samples of internal controls. I have started one but want to add anything I missed.

thank You

In a Cash Balance Plan, very often we will amend retroactively to increase the staff (i.e., Non-HCE) group to pass 401(a)(26). This is permitted under Reg. 1.401(a)(4)-11(g).

Question: Instead of amending the hypothetical allocation for the Non-HCE group, may the credited interest rate be increased (retroactively), thereby increasing all allocations and passing the tests?

This is a calendar year plan. The Employer is under extension for fiing corporate return and wants the amendment to be effective 1/1/13.

Thanks for any insights.

Employer has two DB plans--a Union Plan and a Non-Union Plan. For employees who transfer out of the union, and therefore accrue benefits under both plans, the Non-Union Plan benefit is calculated by counting all the employee's service as if it were non-union service and then reducing the Non-Union Plan accrued benefit by the benefit the employee accrued under the Union Plan. Because the plans have slightly different ERFs, this offset arrangement can cause the benefit actually payable from the Non-Union Plan (i.e., after the offset) to be lower at NRD than it was at some early retirement dates.

Does paying the lower Non-Union Plan benefit at NRD violate the requirement in § 411(a)(9) and Regs. § 1.411(a)-7©(6) that the normal retirement benefit be the greater of the benefit payable at (i) NRD or (ii) any early retirement date? If you consider the aggregate benefit payable from both Plans, the benefit doesn't decrease; nor does it decrease if you look at the Non-Union Plan's formula standing alone. It's just the offset arrangement that causes the Non-Union Plan benefit to decrease.

Any thoughts appreciated. Cheers.

In the middle of 2013 we were notified by a client that they had moved the plan assets out of the current investment platform into the investment platform of a MEP. We have seen nothing in the way of documentation for this transfer. Other than a final 5500 for 2013 and "our plan" for this client, how is the testing done on this? is anything done on a partial year basis or is it all now simply done for the full 2013 by the MEP? The plan is a SH match. Would mid year calculation of match and an adp test be required? I

Has anyone ever seen guidance as to what the meaning of "substantially all" under IRC 409(h)(2)(B)(ii)(I) is? The Code permits an ESOP to require cash distributions (and not permit in-kind distributions) where the corporations charter or bylaws restrict "substantially all" of the employer securities to employees or a qualified plan. Does anyone have any idea what "substantially all" means?

I ran into a friend of mine recently who was frustrated with her ER over the 401(k). Apparently the ER customarily announces a discretionary match to the 401(k) - (no P/S component) - at the beginning of the year, and discloses it to the EEs in writing. However she was just informed here in April of 2014 by the HR manager that the company has decided not to make the previous year's match already declared (2013) due to profitability issues.

I understand that there can be a lot of leeway with what an ER can do if it is in the plan docs and doesn't violate ERISA, so I asked her to get a copy of her SPD/SMM, which will give me a starting point. I'm an Investment Adviser and not entirely familiar with plan design issues, but I would think that if they are disclosing in writing the the EEs at the beginning of the plan year what the matching contribution is, they couldn't rescind that declaration after the plan's year end.

Does anyone have any thought on this?

FYI - I prospected this ER last year and spoke with one of the execs, who in conversation told me he had heard of 408(b)2 but they didn't have to comply with it...so obviously this is a plan with suspect management to begin with.

We have a 401(k) plan client that had been a 9/30 C-corporation.

In late February they filed to be an S-corporation. As such, their accountant is filing a tax return for the period 10/1/2013 - 12/31/2013.

Their 401(k) plan currently has a 9/30 year end.

Question: can the plan be amended now (April 8, 2014) to change to a short plan year for the period 10/1/13-12/31/13 or must the amendment be prospective?

Thanks

In a typical mirrored loan, the company will get a loan from the bank and then loan the money to the ESOP pursuant to identical terms.

We have a company that would like to get a loan from a bank and then loan the money to the ESOP with more favorable terms. Does this work? Does this provide greater protection, since they are charging the ESOP less? (then again, the ESOP owns 100% of the Company, so maybe it doesn't matter.

My understanding of the final regulations is that after giving the automatic enrollment notice, the employee must have a reasonable period of time to elect not to participate (ie opt out) or to elect to participate at a different %. I have a client that wants to enforce automatic enrollment immediately, but then offer the 90 day permissible withdrawal option where they can ask for an undo so to speak of the amount.

Is this permissible? I feel that it may violate wage withholding rules since you do not give them an opportunity to opt out.

Thoughts?

401(k) Plan provides for safe harbor contributions and profit-sharing contributions. There is no last day rule or Year of service requirement. Employee is fired mid-year. He signs a severance agreement with a general yet broad release of all claims. Employer believes this means it doesn't have to make contributions to ex-employee under plan.

Thoughts?

Taxpayer is MFJ and is going on extension to October 15, 2014. Current AGI allows a Roth IRA contribution for both H&W. However, what are the ramifications if the taxpayer's AGI goes up over the limits between now and October 15? Can the Roth be converted to a traditional IRA without penalty?

Any answers would be helpful, thanks!

Hello

My wife and I are both US residents but non US citizens. I'm thinking of opening an IRA and Spousal IRA (both non Roth) and wanted to check if there are any ramifications of non being a US citizen?

I just read something that said US Citizens must cash in a Roth IRA if they retire abroad, so I was wondering if there are other rules US Citzenship versus non Citizenship

- Firstly, can we, as US Residents but non US Citizens, open and contribute to an IRA?

- If we create an IRA then later move abroad to work can we still continue to contribute to the IRAs?

- If we retire abroad and have a non Roth IRA what is the situation?

THanks