WDIK

Are only elective deferrals contributed to the defined contribution plan? If so, then I don't think the paired plan deduction limit applies (but it doesn't matter anyway). Otherwise I think it does apply. This is only based on my reading that such an opinion has been expressed by some (unnamed in the text) IRS representatives. EDIT: This was in response to the first post.

Thanks MGB et al. Hopefully I should be able to remember this until the next time the topic comes up.

I'm sure you already know this, but I'll bring it up as part of the dialouge. The instructions for Form 5500 state the following with regard to termination of accountants and enrolled actuaries: "In case the servcie provider is not an individual (i.e., when the accountant is a legal entity such as a corporation, partnership, etc.), report when the service provider (not the individual) has been terminated." From this it looks like what it boils down to is how the service provider is defined. Is it an individual or another legal entity. (Edited for typos)

In my opinion, this is the most compelling argument made thus far.

If you filed today (and I added correctly), the filings would be a total of 937 days late. This equates roughly to a daily penalty of $4.25 to beat the $4,000 DFVC fee. Seeing as how the maximum DOL penalty is $1,100 per day, plus another potential $25 per day for the IRS, I think I'd recommend the DFVC program.

rcline46: Your point is well taken regarding "grossing up" to the 20% withholding threshhold. But doesn't Tom's example still work because you are withholding all that is available, even though it is only 16.67%?

Any ineptitude on my part was unintentional, and I apologize to any and all who were offended by my post.

The plan document should define the plan year, limitation year, and employer's fiscal year as well as compensation and its applicable period(s) for plan purposes.

This section of the memorandum seems the most pertinent to the discussion of assigning each individual, by name, to a group. Minds far superior to mine can interpret what that actually means.

The distinction between the basis (which was already taxed) and the earnings (which are subject to tax upon distribution). Edit: To be fair jhilliard does say he knows the "post-tax balance", but I assume that he means the total value of those contributions plus the earnings, otherwise the question would not make sense.

While not related to your question, you might want to consider the following. You state that the service requirement for eligibility is one year of service based on elapsed time. You also state that the employees of the exluded affiliates generally work less than 1000 hours during the plan year. If the plan's service requirement were one year of service based on 1000 hours, these employees would not be included in the coverage test. Of course there may be some other factors involved in choosing the eligibility requirements that are not elaborated here.

Who has guardianship?

First, I assume that we are not talking about a prototype document. What are the characteristics of the respective groups deferring as percentages versus dollar amounts? Would you be able to show that such a provision does not discriminate in favor of highly compensated employees? I agree with austin3515. Especially if this is a small employer, it seems impractical.

Is the percentage/dollar amount distinction you refer to based on the employees' regular deferral election, or a separate election on the bonus only?

Indentured servitude? On a more serious note, you will find several discussions on the boards relating to the topic of "employees" with zero compensation. I would suspect that the same logic applies in this instance as well. EDIT: After rereading the threads mentioned above, I think I'll take back what I said. I remembered some of the statements differently than they actually were. Sorry.

Revenue Procedure 2000-40 gives approval for a change in the valuation date to the first day of the plan year, but not to the last. Revenue Procedure 2000-41 outlines the procedure to apply for a change in funding methods with the IRS (including changing the valuation date).

A Matter of Form (5500) Excerpts from above link: THE DEPARTMENT OF LABOR AND THE IRS HAVE revised Form 5500, Annual Return/Report of Employee Benefit Plan. Plan administrators and employers sponsoring employee benefit plans need to use the streamlined form for 1999 filings. THE REVISIONS, WHICH REPLACE THE FORM 5500 series with a single form, are expected to make the annual filing requirement easier to fulfill. With the old form 5500, many plan administrators and employers found the annual filing requirement to be a difficult task. The new form 5500 is intended to simplify the report and the way it is filed and processed. Simplified for whom?

But what about what he said in his first post?

But isn't jim saying he can make a $6,000 contribution to each plan, for a total of $12,000?

I am most likely missing something simple, but I am confused. With the Dr. earning $45,000 in Practice 1, how do you arrive at $6,000 SH contribution for that plan?

Wouldn't it solve your problem, if in conjunction with the resolutions to terminate the plan you select an appropriate date for the cessation of accruals?

Homer Simpson. Edit: By the way, what was the topic of this thread?

Topgun: Welcome to the discussion. Does this also factor in the commission and cost of insurance? Is the basis of this statement the fact that the market has been down over the last five years? If so, "past performance is not necessarily indicative of future results." If there are some other reasons why you feel 412(i) plans are superior, would you please elaborate?

I don't mean to be a nitpicker, but I agree with the nomenclature and definitions already put forth by Lame Duck and Appleby regarding "Keogh" and "Solo" plans.

I don't think it is required, but what would it hurt if a copy of the extension was included?