mjbais1489

Okay thanks! We've discussed Roth employer contributions. My question becomes he cannot have a vesting schedule on the Profit Sharing then correct? Hes only been in the business for 2/3 years. If he wants to do his "profit Sharing" as Roth he would need to make the vesting schedule something where he is immediately vested in those dollars which means all his employees would be as well? Thats the downside but as @RatherBeGolfing describes maybe that's less of an impediment for some clients than I assume it is.

I know this board is probably tired of After tax/mega backdoor roth questions....but here I go. I'm an advisor who only does 401k/403b/Cash Balance plan advising. We pride ourselves on our ERISA knowledge and everyone on my team has the QKA at least, but a client has come to us with questions that I wasnt sure of. The TPA was on the call and they are researching but I thought Id ask this group as well. The client is a young business owner (~10 employees)who loves after-tax/MBDR strategies. We have shown him numerous profit sharing plan designs, discussed the issues with after tax contributions for a company his size, etc. His question as we reviewed profit sharing is what if instead of profit sharing he does $35k in after tax contributions to get to $70k. Then can he simply do the $80k in profit sharing were showing due to employees as employer after-tax contributions? Everything I read says after tax is subject to ACP, and the only remedy for after-tax is the owner removing their contributions, but could he instead of that just do very large after tax contributions to his employees like a QMAC remedy? There are a ton questions I have that come out from this - who pays the tax, would this money have to be considered fully vested, etc.