Bird

I still don't think it's ok to combine; the FAQs read "...the name of each regulated financial institution holding or issuing “qualifying plan assets” and the amount of such assets reported by the institution as of the end of the plan year..." But you raise a great question, and getting back to the original options, I'd guess that most people are treating these as individual account plans that don't require the disclosure of the institution and amount.

I don't think you can completely close the door on that argument in a self-employed scenario, but documenting the entity's separate decision-making represents best practices.

So, is the owner's account essentially self-directed, and does(n't) he get statements directly from the investment provider at least once per year? And the other participants have individual accounts*? If so, then I think all of the assets are assets of individual accounts and no SAR disclosure is required. Maybe I'm missing something as I am confused by the first response. *Qualifying plan assets include: In the case of an individual account plan, any assets in the individual account of a participant or beneficiary over which the participant or beneficiary has the opportunity to exercise control, and with respect to which the participant or beneficiary is furnished with, at least annually, a statement from a regulated financial institution describing the assets held (or issued) by such institution and the amount of such assets. ..maybe I get it; Ascensus is not a regulated financial institution, so they could be Madoff-ing the statements? Mmmm. Well, I don't think it is ok to add the two together. I guess I would just do it as required and tell the client "it is what it is."

I don't know the specifics of how it works, but it doesn't appear to allow for any higher contributions than you could make as an unincorporated independent consultant. If you're getting a 1099, and it is a legit arrangement, then you can make both employee and employer contributions based on that business income.

Cut the check and mail with the notice (or at the same time if coming from different places).

We provide the notice. In our case, there is some kind of paper correspondence with virtually every distribution, so including the notice is not an extra step.

No. You can research prior threads if you want, or you can poke yourself in the eye with a sharp stick and save time.

I've been trying to figure this out. I did see Form 945 referenced, so I think it will apply to pension payments. I saw that there is some kind of exception for less than $2,500 (which would take care of most of our situations), but couldn't find if that was still to be deposited on an 8109 or with the 945. Most of the articles cutely say "throw out those 8109 coupons!"

We're a very tiny shop with small clients, so I don't know what this is worth, but when the return is ready, we send them a letter with two options - 1) sign and return the (enclosed) 5500 and the (enclosed) authorization, and we'll file it for you, or 2) e-mail us and we'll give you detailed instructions on how to get your filing credentials and file the return. We're obviously steering them to the first option, and probably 90% or maybe 95% are doing that. With all the hand-holding we do, this is no big deal in terms of extra work, and in many ways we prefer the ability to control the flow and get instant feedback on a successful filing. The few who want to handle the filing themselves are mostly competent, but the idea of turning some of our less-able clients loose on that gives me a chill. (I'm probably repeating myself, but I'm dumbfounded at how some people get out their driveways in the morning without running over their or their neighbors' mailboxes, let alone make money hand over fist as they do.)

The value of a note depends on several factors, including the outstanding principal, interest rate, current market interest rates, likelihood of default, and the value of any property securing the note. It's possible that the true value could be less than the outstanding principal due to the risk of default, but if the rate is high to reflect that possibility, then not necessarily. In theory, the note was valued fairly at its inception, so any deviation from the current outstanding balance should be a reflection of changes in circumstances since that time - market rates rising or falling will inversely affect the note's value, as will a change in the likelihood of default. Ultimately, the best way to get something that you can really hang your hat on is with an appraisal.

The participant has the choice of getting a lump sum, with the spouse's consent (perhaps at a price), or taking a J&S annuity where she is the contingent annuitant. If he doesn't make a choice, the plan should have the ability to force the J&S on him.

It's not on the 2009 5500 forms and won't be on the 2010 forms. So, if you are preparing a 2010 form in 2011, you will have to have a PTIN but there won't be a place to put it. Just to clarify this point, unenrolled preparers will be able to get PTINs through the new system when it is running. They'll eventually (Dec 31 2013) have to pass the competency test or become enrolled to renew it.

That's right; thanks for the confirmation.

But what's the (tax) point of transferring the shares in-kind to another plan, or isn't there any? I understand that if shares are transferred to a participant, he gets favorable tax treatment, but if they are transferred to a plan, then it's just treated as a plain old rollover, right? I'm going to assume it's just a procedural thing`where he could have sold them within the plan first, and if he didn't, then they prefer to or have to keep that part of the plan as stock-only right to the point of distributing shares.

I dunno about this...employee worked for Wachovia Bank, now is in one of our plans and elected a rollover to the plan. Wells Fargo, which took over Wachovia, sends a check for part if his account and a stock certificate for the employer stock part. I know that the stock could have been distributed to him, but I've never seen stock going from one plan to another. I'm inclined to take it and sell it in the new plan (pooled brokerage account so it can be done) and give him credit as a rollover for the sale amount. We sure don't intend to hold that stock just for him and I don't think it was a proper way to distribute it. Comments?

I'm just going by "taxation logic." If you told me they were deducting the ps contribution on the partnership return, I would say not to reduce comp by the contribution. With partnerships, close is good enough. I've seen accountants do things differently enough (even the same partnership, same accountant, different year/different treatment) to think that it's more important to follow consistency of taxation than to try to make it "right" from beginning to end.

If they are taking the ps deduction on their 1040, and I assume they are, then you have to reduce their compensation accordingly.

Part II can be used to provide information on service providers who failed or refused to provide Sch C data. Before it came to that, I think I would send a letter formally requesting the info with a remark that if it is not provided, it will be so reported. Also note that FAQ 40 allows the service provider to just say they can't provide the data due to their inability to adapt their systems in time. Yes, the client needs to be part of these conversations.

5500s are considered tax returns for this purpose so it definitely applies to 5500 preparers. I guess I'm the only one who thinks this is a good thing. I don't know if it will actually curb the garbage spewed out within our own industry by certain large payroll companies and others who are clueless, but that's what it is aimed at, I think.

You mean, can the plan sponsor just decide to transfer funds from a plan to an IRA? No. I don't think it was ever permitted.

Agreed; the designation may be by form or operation of the plan document.

It's not clear yet. The people you describe, IMO, aren't preparers.

no

There's your answer. If you haven't learned it already, brokers are notorious for...well, for being wrong.

I'm with Andy. I used RIA for a looooong time; used to read their weekly (?) newsletters pretty carefully, then of course the world went electronic and I stayed with them, but about two years ago I realized I barely paid attention to the daily updates, relying instead on BenefitsLink. So I got the online and print versions of the Erisa Outline Book as a backup to keeping up here (the books sit on the shelf and I use the online version so infrequently that I had a hard time logging in the last time I tried). The only thing I miss are the special supplements...e.g. I still have a dog-eared copy of the analysis of the final 4001(a)(4) regs, with my notations. Sometimes it's nice to have a book in your hand to flip back and forth between pages.