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Bird

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Everything posted by Bird

  1. Bird
    I'm not sure exactly what it's called but I do it, with literal transfers of money. I have a TPA business (corp.) and am a broker. Back in the day, a former broker-dealer allowed me to assign commission income to my corp. and all was nice and easy. When I switched B/Ds they said "you can't do that" so they pay me as a sole prop. I (literally) transfer that income to my corp. as it comes in, and do a 1099-Misc at the end of the year.
  2. Bird
    FWIW Paychex and their ilk almost certainly have a computer fill this field with actual cash balances.
  3. Bird
    A few thoughts on this... first, it's too late to set up a plan for 2018 (!) (oh I see as just noted by jpod). second, it seems someone told him to set up an S corp but then apparently he didn't know enough to have his clients pay the S corp. Going forward, that should be fixable by having them pay the S corp. Also it's not unheard of for the sole prop to pay the S corp just to get all of the income in one place. As noted, he could have both the S corp and the sole proprietorship sponsor the same plan. And yeah the CPA should be involved to help sort this out. I guess I am just rephrasing other comments...
  4. Bird
    That's what I thought. You are not really withholding, you are paying 100% and immediately making an estimated payment. The end result is the same but...it's not withholding. Definitely not. For better or worse, there are no consequences* to not following the mandatory withholding rules, but as noted above, I wouldn't make it a policy. *I think that a participant would have to initiate some action, saying "you didn't withhold 20% and you have to pay it." But the trustee would then counter with "we overpaid you and you owe us 20%." As far as I know the IRS doesn't enforce this at all.
  5. Bird
    I think he's saying he ignores the mandatory 20% withholding requirement and has the participant make an estimated payment; no 945 required. Can't say I've never seen a client flout the mandatory requirement but can't say I would make a policy of it either.
  6. Bird
    This is something we do for our clients. We have a master EFTPS account and process the payments through a dedicated bank account. The alternative is to have each client enroll (I have one client who does this but the thought of some of my clients trying to do this is...comical, but that understates it), or outsource it to Penchecks. I thought you were not allowed to send checks, period. The due date for smaller amounts is the 15th of the following month. Larger amounts have different schedules going to as short as...maybe the next business day; don't recall the distinction between "smaller" and "larger" off the top of my head but I believe it is Pub 15 that covers all that.
  7. Bird
    I just got one for our plan. Can I send it to you to deal with? ? Paraphrasing, it says "you got this because you filed a 5500."
  8. Bird
    Interesting question and I guess it probably made me wonder some time ago when we started using other companies' forms (e.g. platforms). We definitely put numbers on forms when we prepare them. They're not on there for most/all platforms. I don't think numbers are required, and if they are, well, we all have a lot of company and I'm not worrying about it.
  9. Bird
    I think these document provisions that add so much flexibility are sometimes problematic. For me, I'd rather know that matches are or are not payroll-based and act accordingly. (And for a partnership they shouldn't be payroll based - actually just about all of the time I'd prefer that they not be payroll based.) Having said that, it would appear to me to be discriminatory in operation to give a "full" match to partners and potentially not to others, so I'd do the true ups. But I'd much prefer that the plan design be that matches are based on full annual comp, and yeah they can go ahead and "pre-fund" for the W-2 employees each pay period but then do an annual calc and do true-ups as needed. Which circles back to what the plan actually says - you say they are "funding" each pay period but does the plan say they are calculated on a payroll basis? If not then I'd argue that the language about true-ups being optional is not applicable to this situation (i.e. they are required).
  10. Bird
    If I have full year's comp I find it easiest to ask them for comp thru 6/30 and then subtract it. That (6/30) report is probably already available somewhere...it's surprising/disturbing how difficult it is for some people to provide 7/1-12/31 figures but easy to get it as of 6/30.
  11. Bird
    I don't usually put too much stock in IRS pubs but that is, I think, well stated. I'll stop equivocating on this issue...if I can remember where that came from. I'd caution that a self-employed 401(k) sponsor with employees is subject to the DOL rules, although it's not a tax issue.
  12. Bird
    Any day in 2019 is fine
  13. Bird
    Which highlights the Q of whether it is "earned" income or not. When in doubt I ask if someone is paying self-employment taxes.
  14. Bird
    I kind of agree with you that if nothing is done, it is a PS contribution. But there's level of sanity that should prevail...I'd either ignore it, forfeit it, or bury it as a gain (essentially ignoring it but cleans up the reports).
  15. Bird
    Correct; I was careless and did not say "if you are imputing disparity."
  16. Bird
    When you general test you have to use the TWB, so if you use those other parameters (that are...um, I want to say "safe harbors" when doing a true integrated allocation) you'd (likely) fail.
  17. Bird
    Search for "exclude-one-llc-partner-from-permitted-disparity" for a recent thread on this topic. Unfortunately there was some extracurricular activity at the end but the early comments might help. The upshot is that although your document may say "New Comp" as a choice under allocations, it really means "something other than a pro-rata or integrated allocation," e.g. "everybody gets what I say they get." New comp is a testing method, not an allocation method. You should be able to use an integrated formula (at 100% of TWB) to calculate contributions, scratch your head and say "mmm, I think these will be my contributions." then general test them on a contributions basis and pass.
  18. Bird
    The plan sponsor can terminate the plan. Typically the other members of the controlled group are "adopting employers" (i.e. going along for the ride), but they don't necessarily have to be. In the scenario where there are no other adopting employers, then it's easy, the plan sponsor simply terminates. I have to say I've never had a situation where the "primary" sponsor wanted to terminate but the "secondary" sponsor(s) didn't, nor have I thought about it, and it kind of begs the question of "control" but I'd say the primary sponsor can do what it wants.
  19. Bird
    Not unless we have to (pension plan). 100%. It's not a suggestion or a discussion. You didn't ask, but the fact that this topic gets as much attention as it does on a policy level frustrates me. The problems we have with the retirement plan "system" are mostly due to not enough money, not how it is paid out. We're all busy right now and I'll leave it at that.
  20. Bird
    That seems like a last resort to me; if you have a legit executrix I see no reason to delay and make things more complicated than they need to be.
  21. Bird
    Normally the trustee, your deceased client, would have to approve those transactions so it may not be so easy. Assuming all is well with the sister being the executrix, she should be able to name herself as trustee and complete all of this.
  22. Bird
    Yeah thanks but I'm aware. Do you really think this "store manager" went from a salary of $65K to being a true partner and getting a draw against profits? My spidey sense tells me all is not as worded.
  23. Bird
    You're wise to be cautious. Take the following for what it's worth and probably touch base with an attorney. The letters testamentary I've see specifically name someone as executor/executrix - I don't really know if "personal representative" is the same thing but different language for different states. I am about 100% sure that you should not pay benefits directly to the individual; they should go to the estate. If she is indeed the executrix, then you (and the brokerage house) should be taking direction from her* as the effective successor business owner (if your client was in fact the plan sponsor and a sole prop...if a corporation, I have to say I'm not sure, and if this was a(nother) participant in a plan sponsored by your client, then you take direction from your client). *But not to the point of paying her directly. Ultimately if there was some kind of fraud, she's the one with liability, but that doesn't mean you wouldn't get sued, especially if you didn't take reasonable precautions. As an aside, we are willing to hold copies of bene designations. I'm not sure why that is perceived as a problem, and it certainly is and has been helpful. I have a good sense of how I'd handle this in my office but not sure how perfect this advice is.
  24. Bird
    All good and understood; I'm a little amused at how you guys are going in the direction of "but you need to have positive income" (implying that there are other profits or losses to be allocated) and I'm interpreting this is a situation where the business changed this employee to a partner who only gets a draw - for perhaps bogus reasons having to do with screwing them. Maybe I'm reading too much into this (and other posts from new-ish posters).
  25. Bird
    Sorry but it's kind of hard to follow...um, what does this mean? ",,,only receiving a draw of the exact $65k and not having an explanation of who is the workload? " Anyway, it sounds like this individual is your client, and she went from being an employee to being a partner.* Well, a partner in a partnership can make SIMPLE IRA contributions, so the form of plan is not really an issue. Somebody probably needs to clean up the paperwork regarding plan sponsorship. *Does she know this is a pay cut?
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