Bird

Is the business owner also the trustee? If so, signing the check and "delivering" it to him or herself on 9/15 meets the deadline. Keep notes about the money going to the consultant first, in case the date of deposit is challenged as being too long after 9/15.

Still thinking about it. One solution is to use Penchecks or a similar processing service to make the payment and deposit for you, but then you're back to paying fees. It appears that you might be able to pay up to $2,500 with the return; I found this in the proposed rule but haven't been able to confirm that it would work for us. For example, under the proposed regulations, employers must deposit income taxes withheld from wages and taxes under the Federal Insurance Contributions Act (FICA) (collectively, “employment taxes”) by EFT unless the existing de minimis rule under § 31.6302-1T(f)(4) applies. Generally, the de minimis rule for employment taxes allows employers with a deposit liability of less than $2,500 for a return period to remit employment taxes with their quarterly or annual return. Employers below the $2,500 threshold may remit the employment taxes with their tax return, may voluntarily make deposits by EFT, or may use other methods of payment as provided by the instructions relating to the return.

You're right, thanks. But it's still a work-in-progress and who knows? You raise a good point and I think I'll wait until January (also an ERPA).

Looking at the form, it actually appears to be a one-time fee. It just says it's an application fee to request a PTIN. When this started it was expected that this was an annual fee, or maybe that was a misunderstanding. Or maybe I'm wrong and you have to re-apply each year, but I saw no indication of that on the form.

It seems the most accurate solution is to amend returns going to the one where the contribution was shown. If that's impractical (and I don't know that that's a valid reason not to) then I'd bury it in the gain/loss. I'd think you'd get kickback from the EFAST2 people if you carried a liability on the final return, if not at the time of filing at some later date.

That's your Safe Harbor QNEC. It doesn't surprise me that a notice doesn't call it a QNEC, but the notice should say that it is 100% vested. As noted, that's commonly called "profit sharing." The terminology basically stinks, as there are other types of QNECs that could be made to a plan, and "profit sharing" generally has nothing to do with profits any more. And "Non-Elective" seems to imply that it is required, which it is for the 3% SHNEC, but isn't for Employer Non-Elective (profit sharing).

I guess not.

I'd show them as accruals. I don't know about the 5330; it seems that if the DOL is involved and you're paying interest and penalties you might not have to.

I don't think it should be "final." It would certainly be flagged and maybe rejected since there would still be assets at the end of the year on the return. You just start filing an EZ; you might have to explain later to the DOL/IRS why they're not getting regular forms any more but in my experience (not recent) they have somehow cross-referenced the forms and not even asked about a "missing" return.

I agree with the prior responses - basically, reporting can be done on a cash or accrual basis, and the auditor is way off base to recommend holding off on the deposit of deferrals for this reason or any other. Delaying a whole payroll is kind of preposterous, no? While reporting may be done on a cash or accrual basis, I think it's a supremely bad job if someone, probably the TPA, doesn't reconcile at least the deferrals on an accrual basis and prepare the reports that way. Otherwise...well, you have the "otherwise" at hand.

I would file a new 2010 form if both systems (Relius and EFAST2) let me and worry about the bogus form later, if it ever comes up. Better to have too many than a late one.

But that's not true; I don't think the forms were available before some of the returns were due. I know I filed one using the 2009 forms - we use Ft William and as Tom notes, it had to be exported as an XML file and uploaded directly to the EFAST2 website (i.e. not through Ft William).

Yes, there must be a distributable event. But it doesn't have to be a physical distribution.

No, you don't have to allocate to the accounts and then take it out. That wouldn't be using forfeitures to pay expenses, that would be allocating forfeitures and then paying expenses from participant accounts.

I assume you have an individual account plan, and the employer wants to contribute some dollar amount but you don't know how to allocate it to the individual accounts? It's really two issues, deductions and then following the terms of the plan which calls for self-direction. The deduction issue is simply that the money must be contributed by the deadline, Sept 15 if it is a corp, partnership, etc on extension to that date. It can go into a checking account or a holding account within the platform. Getting it into the individual accounts doesn't have a specific deadline that I know of; I'd think within a month or so is reasonable and a year, not so reasonable.

Unless there is something in the regs that I missed, other than the example cited which says "the first..." when it appears to be talking about a single distribution event, then I still think this is a non-issue. Think about it - the participant, or the plan, is audited, and has to show that it complied with the RMD rules. They show the calcs and proof of the distribution. We've all seen weird stuff, but I can't in my wildest dreams imagine the IRS saying "tsk, tsk, you took it in the wrong sequence and now...[what?]"

I break it down like this: The IRA apparently had no money in it as of 12/31/09 so there is no RMD from it, or if it did have money in it the IRA's RMD is based on the 12/31/09 balance before the rollover in 2010. The point is, unless they are told that some of the money was not eligible for rollover, they should butt out. The plan had money in it as of 12/31/09 and therefore has an RMD. As long as it makes the RMD with whatever money it has in a timely manner, there is nothing to discuss.

Thanks for mentioning it...I want to make money online.

Yes, but it's not like it's something that got approved accidentally. As noted by rcline in the first response, the IRS speaker was talking about a QNEC to correct a filed test under EPCRS, not the 3% safe harbor. I've never like calling the SH a QNEC, but the IRS does in the regs, so we get this kind of confusion.

Repayment of the loan doesn't affect the 1099-R for the deemed distribution - you just report it as taxable income. The subsequent loan repayments, as a I recall, are treated as after-tax contributions and are tax-free when they are eventually distributed.

That's correct, it's not your fault - and it's not the DOL's fault either; some people are just disorganized/lazy/stupid/arrogant and won't get this done on time, whether the deadline is July 31, October 15, December 31, or whatever. I see no reason for a blanket or other general extension. (And to be clear, I'm not criticizing or berating you; I'm just sayin', that's all...)

I haven't heard anything at all about an extension beyond 10/15.

Therein lies the rub; it is of course a cash or deferred arrangement if each one is independently deciding how much to contribute and has the ultimate power to make that decision. But, it is at least technically a partnership decision, and you document it as such. I'm not totally cavalier about it; I have a partnership with 12 or so partners and I make them take the same amounts...because they're used to it, and because they have enough trouble deciding on one number for the group. let alone letting each one make a decision, and because I don't think it looks good (from the deemed CODA standpoint) to have 12 different contributions. Maybe that's not consistent...

The tax-free portion is the at-risk amount (55k-35k) minus previously taxed cumulative PS-58 costs, if someone maintained that information. For the 5500, use whatever is there or paid as of the reporting date. So, assuming you reporting the CV at the end of the prior year, and you received the face value during the year and turned around and paid it out, the face value is part of the distribution. If it's not paid out for some reason, then it's included in the assets at the end of the year. (If you were showing the premiums as an expense and not including the face value in the plan assets on the 5500 in prior years, then I guess you don't show any of the insurance activity at all in the current year. I've seen that but never liked it much.)

Me too.