Bird

I agree with this interpretation. I was going to go into a longer explanation but Belgarath beat me to it...

The owner's contribution is definitely deducted on the 1040 (or it should be...I know some accountants who do it on the Schedule C but that is wrong). As for an actuary telling you how much is for the owner, I think s/he'd tell you something like "well, the contribution is the for the entire plan, and I can't really specify how much is for each participant, but you might allocate it in proportion to the normal cost [as suggested above]." (But let's say the contribution is much higher or lower than the total NC...really, anything over the employees' normal costs is going to go for the owner, so you might want to do it that way.)

I'm not sure there is any debate - you can't use that form if you have another plan, and you are "using" it if you are maintaining a SEP under it. I'd first ask my investment provider if they have a SEP adoption agreement that doesn't use the IRS form. If so, use it and move on; there might be a little exposure but I don't think I'd get worked up over it. The other option is to roll the money from the SEP to your 401(k). Have the check paid directly to the 401(k). It doesn't really correct the problem but will eventually create distance from it.

What did the Schedule C taxpayer elect to contribute before 12/31? That is what she can/must deposit.

I believe there is a 1099-R code for 415 excess refunds. Maybe we don't have to bother reporting rollovers since they are not taxable...?

I'm pretty sure the IRS said at some point that the last year in which you worked is the year in which you retired. I thought it was not too long ago but everything blurs together so maybe it was the 2003 ABA conference noted by Belgarath. I am quite sure the IRS would find your argument unconvincing.

I would say he retired in 2014.

I say definitely. I much prefer the modified accrual method so things tie out, but you can clearly file on a true cash basis...and did it, once. Or I should say did NOT (file) since cash assets were under the threshold.

That's probably how I would do it (it's never as easy as it seems...if it is an asset purchase, then it really is a new company/new plan sponsor; you probably want to be specific about crediting service with the old sponsor).

no, no, no

I'd go with "not" active.

I meant that saying anything at all about a loan program will remind/inform people of its existence and all of a sudden there will be things that they need/want a little more badly.

It's not a fee so I wouldn't worry about the formality of that. If the rate is in the SPD (and it shouldn't be, IMO, for this very reason) then that should be changed (SMM). Otherwise, change the loan policy/procedure and move on; I think you are only obligated to give that when someone asks for a loan. If you want to do more than necessary, then hand out the new loan procedure, but be prepared for a flood of loan apps - no good deed goes unpunished.

Those K-1s go in the trash.

fyi they replied and, not surprisingly, told me (vaguely) how to submit taxes when I withheld them as a payor. (Of course the link they gave me was broken but I figured it out.) I wrote back and said "you didn't answer my question - can I withhold and submit for various plans?" Rather surprisingly, I got an immediate answer: "It is the payor's responsibility to handle the withholdings and the reporting on the 1009-R." IOW "no." So unless a plan sponsor wants to register individually, there will be no withholding for NJ state taxes in my shop.

I'd call it a default. The distributable event would be termination of employment and the passing of Dec 31 without re-employment. That did not happen.

I'm old enough to not remember if I posted this before, but...has anyone successfully set up a withholding program for New Jersey state taxes? (Like EFTPS where we do it on behalf of the client.) I actually had one client who figured things out and did it themselves. And I think I had someone from the state on the phone once who said "sure it's easy, you just need Form blah blah and Form yada yada and Form xyz and Form abc and Form pqr to cover all of them", or something like that. American Funds used to say that they couldn't, but I think they (and others) can do it now. I just sent a question through their "contact us" section of the website, but I shudder at the thought of what I might get back, if anything. Anyway, you get the idea - is there an equivalent to EFTPS for NJ? (For the uninitiated, NJ says that plans must withhold state taxes if requested. We've made it very difficult to request on our forms but recently had a couple of people who outsmarted us and wrote a separate note.)

Curious that the concluding post on that thread was by *_guest named mjb* who said: We have had this discussion before and it boils down a rejection by the Tax Court of the IRS position in 83-116 that the extension of time permitted by 7503 applies only to the collection or refund of taxes, e.g., filing of a tax return. See E-B Grain Co v. Commissioner of IRS, 81 TC 70 and Synder v Commissioner of IRS, TC Memo 1981-216.

What BG5150 said. Everyone is supposed to get the same % or the same $. Doing anything else is not following the terms of the plan. "Discretionary" means the total amount is discretionary, not "we can do whatever we want."

The rest of the post seems to indicate you have a self-directed plan. Anyway, in these situations, we just leave the forfeitures in the old account (of the term'd participant) and close it completely the following year.

I vote yes.

It's probably one of those things where you have to ask what is trying to be accomplished. I would guess that there is a misunderstanding about something or other.

If everyone is in their own group then the methodology used to determine contributions is irrelevant. You could base it on shoe size, compensation from May 3 to May 15th, or whatever you want. Ultimately, as far as the plan is concerned, you have determined - outside the parameters of the document - that each participant's contribution is "x" and you test it against an allowable definition of testing comp.

I tried to simplify it by ignoring other sources - loans and hardships were from deferrals only. Yes he had enough in other sources to qualify for a loan larger than 50% of deferrals. deferral contributions 25000 loan taken for, let's say 23000, some payments made, defaulted at 22000 gains and loan interest total 4000 7000 in investment account now

Let's say a participant deferred $25000 over the years. He takes a loan, and defaults to the tune of $22000. There is $7000 left in the investment account, so there were gains of $4000. Now he wants a hardship...would you say he can take the full $7000, where the defaulted loan used up gains and some deferral contributions, or only $3000, where the defaulted loan used up deferral contributions only? I'm leaning towards the first, in the absence of guidance, at least as far as I know.