masteff

So step 1 is to complete the account application and submit your money. You may have the choice to specify where to invest the money or you can simply let it get put into the money market option. Letting it go into the money market at first can be a good thing because a) it gets your money into the Roth IRA and b) it gives you have a few more days to decide how to invest (which you appear to need); to put it another way, you're moving forward w/out having to make all the decisions at once. That leaves where to invest. Until you have significant assets, mutual funds are an excellent choice. So how do you pick? Morningstar "Star Rating" is helpful: don't look at anything below 3 stars and preferrably 4 stars. Personally, I like index funds to start (first $100K+); maybe 1/2 S&P and 1/2 NASDAQ. Moving forward in time, you'll want to pick up some international indexes as well (see this article to understand why international is potentially beneficial for your portfolio in the long run https://guidance.fidelity.com/viewpoints/wh...s-are-important ). Your last two steps are: learn and review. Motley Fool has loads of good articles on investing. Also the various investment firms and mutual fund firms have good articles (like the one I linked above). And once every 3-5 years (or whenever you have a major event in your life, like changing jobs or getting married), you should review your portfolio and the particular funds you're in and make sure they're still good. While you might still want to be an particular type of fund, you might discover that the ABC fund changed managers and is underperforming so you might move to XYZ fund which has the same investment strategy but doing a better job of it. As for the consultants at Schwab, I'm presuming they have two levels of service: people who are free for you to talk to and people who they want to charge a fee for. There's no harm in talking to the free-to-talk-to people. They can, for example, help you to evaluate between certain mutual funds to be sure you pick one with no loads or fees. And you can always have a note pad and take lots of notes on what they suggest and then take time to think it over; you're not locked into their advice.

I'd think this could be covered under who's excluded from the plan. Of course I don't deal w/ testing so no idea how excluded persons affect those results.

Can't speak to it in terms of an MRD but at my former job, when someone exceeded normal retirement date w/out returning the proper forms, we'd issue any past payment in the plan's default form of payment and allow the participant to make a proper election (ie w/ spousal consent) for future payments. We also applied appropriate compound interest to the past payments.

Can someone explain to me how ya'll are deciding the "entitled to payment" language does not apply? Especially given that she's now elected to actually receive such payment? Nothing has changed from the past to now, other than her deciding she wants into the plan, so if she's entitled to payment now, how was she not entitled in the past?

Independent contractor vs employee can be a big deal. Most famously, Microsoft got sued by a bunch of contractors who were denied benefits. Of course it's a bit messier since you're dealing w/ a spouse who was paid nothing for her services. But if your goal is to include the spouse immediately, it might serve your purpose. http://www.irs.gov/businesses/small/articl...d=99921,00.html http://www.irs.gov/pub/irs-utl/emporind.pdf Oh, and I assume since it's a doctor that this is some sort of corporation and not a sole proprietorship?

FLSA does not apply if the employer qualifies for what's generally referred to as the "family business exception" under the "enterprise" definition of the Act. http://www.dol.gov/whd/regs/statutes/FairLaborStandAct.pdf Any establishment that has as its only regular employees the owner thereof or the parent, spouse, child, or other member of the immediate family of such owner shall not be considered to be an enterprise engaged in commerce or in the production of goods for commerce or a part of such an enterprise. So that begs the question of what other employees does the company have? As Belgrath said above, if FLSA does not apply then the spouse would not be subject to the minimum wage law.

What about the "independent contractor vs employee" rules? Could you use those to pull her in immediately?

You may need to break the items into two or more categories. In your short list, I see two categories: medical aids and personal use items (see page 16 of IRS Pub 502 regarding Personal Use Items). In addition to Pub 502, you might look at the instructions 1040 Sch A, which explains that medical aids are "such as eyeglasses, contact lenses, hearing aids, braces, crutches, wheelchairs, and guide dogs, including the cost of maintaining them", which would clearly include a braille reader.

A few days late but a bunch of us have been buried in snow... 1099-R instructions, page 9, "Losses". Losses. If a distribution is a loss, do not enter a negative amount in this box. For example, if stock is distributed from a profit-sharing plan but the value is less than the employee’s after-tax contributions or designated Roth contributions, enter the value of the stock in box 1, leave box 2a blank, and enter the employee’s contributions or designated Roth contributions in box 5. http://www.irs.gov/pub/irs-pdf/i1099r.pdf Admitted, your scenario is predominately a rollover, but it sounds like you did exactly right.

Technically speaking, the employee has a choice between take-home-pay and insurance premiums (this is the cash or benefit choice referred to above). By choosing enrollment in the medical plan, the employee is, technically speaking, electing to put money into the 125 Plan which is then paid out to the insurance carrier. The actual mechanism is the employer deducts it from employees' pay and then pays the premiums (meaning no separate holding accounts or anything messy like that). And to make it explicitly clear, you don't have a separate enrollment for the 125 Plan; enrollment in the particular benefits themselves is sufficient (because, technically, the benefits are "inside" the 125 Plan, so electing the benefit is by definition an election to participate in the 125 Plan).

1065 K-1 Box 13 Code M http://www.irs.gov/pub/irs-pdf/i1065sk1.pdf (Edit: curious, as of right now, that's the 2009 version and not the 2010... wonder if they'll change the verbage for Code M slightly for the 2010 version.)

I assume you're referring to this: http://www.irs.gov/retirement/article/0,,id=231775,00.html "Report the basis in the amount rolled over in box 5 (Employee contributions)" It means the after-tax contributions the participant may have made.

Need to look at plan fiduciary issues surrounding selection of investment options as well.

Looking at their example, "earned income" is actually higher in 2010 as a result (because SE tax is smaller). So depending on what type of contribution/calculation you're working with, it might actually increase how much could be put into the plan. A few tidbits I toss in: 1) The IRS has changed the instructions for Line 3 of Schedule SE to mention deducting SEHI (they did not change the schedule itself). 2) Looking to the actual Technical Explanation of SBJA2010, it references the definition of SE earned income in Section 401©(2) (which raises the question of what exactly relies on that definition). http://www.jct.gov/publications.html?func=...7&no_html=1

You opened the door into your private lives when you claimed her as a dependent. Do what you need to prove she's eligible for coverage. If they say she's not eligible, then find out what you have to do so she can be covered and do it. This is about your daughter and not about you or your girlfriend.

I'd err on the side of discretion (meaning mark the box), especially since the employer made contributions for that employee. I can't find the exact trail of code and regs that connects from Section 219(g) to the W-2, but as the W-2 is a duty of the employer, I'd say it's the employer and not the plan that matters (and the employer knows it made contributions to a 401(a) trust).

Whether to use code 1 or 3 depends on how sufficient your knowledge of the disability is. For example, at my former job, we only used disability if the person became T&P under our LTD plan (can't remember if we'd have accepted Social Security disablity now that I think about it). Even if you use code 1 on the 1099-R (because of insufficient documentation of the disability), the participant can easily file form 5329. (And I'd generally avoid becoming the arbiter of whether the person is T&P so unless you have someone else's opinion to rely on (like an insurance company or the SSA), I'd go w/ code 1 and not get dragged into making a determination.)

The issue of open enrollment changes during COBRA is addressed in IRS Reg 54.4980B-5 Q&A-4©

You have 60 days to make a rollover. See IRS Publication 590: http://www.irs.gov/pub/irs-pdf/p590.pdf You should call your investment firm immediately to get the paperwork moving so you don't go past the 60 days.

Sorry, yes, I meant, IMO, it has to be a fringe benefit. The 20% and the $1000 are slightly different beasts, one is a salary reduction (my CCH benefits book calls it a "premium conversion approach") and the other is an employer-funded benefit under the 125 plan (what CCH calls a "full-flex approach"). I shouldn't have referred to it as a CODA so much as it's a 'cash option', which is an essential element of a 125 plan. Looks like Google has a scan of the relevant pages of the CCH book (2004 version): premium conversion: http://books.google.com/books?id=XNGtbaQzc...p;q&f=false full-flex: http://books.google.com/books?id=XNGtbaQzc...p;q&f=false (you might also glance at the "opt-up/opt-down approach" on the page before full-flex) (as far as I can tell, the 2007 regs didn't materially change either of these items) We could state the pricing of the medical insurance inside the 125 plan as being $1000 plus 20% of the premium. The $1000 is employer-funded and the 20% is employee-funded. My administrative interpretation would be that the $1000 is a "permitted taxable benefit" (term used in Temp Reg 1.125-1) paid out by the 125 plan and is a fringe benefit.

I see no if's and's or but's that this is a benefit being paid by the 125 plan and is therefore a fringe benefit. The $1000 is as much a CODA as the 20% premiums in your example. The employer is saying "here's a thousand bucks, you can take or have it used tax-free towards health insurance". A number of companies have cafeteria plans where they provide a balance of X dollars and the employee can choose between cash and one or more options. And the fact it's in the 125 SPD is a slam dunk.

Found a link showing that eBay implemented this type of YTD match for their plan in 2009. https://www.schwabplan.com/download/misc/EBY_FAQs.pdf http://www.schwabplan.com/images/misc/edu/...the_True-Up.pdf

I don't suppose the December statement shows the distribution being taken out in December and it was simply an administrative error that the check wasn't cut until January. How was the request submitted to the Investment House; ie, is there a paper trail to support that he timely requested the distribution in 2010 and the error is solely on the Investment House? Have you talked to the Investment House and asked them to provide an "it was our fault, not his" letter that the participant can attach to his 5329?

Personally speaking, a YTD match is an elegant solution. It gives each employee the maximum possible match w/out the employee having to worry about maxing out too early in the year. And it removes the administrative burden and hassle of a year-end true-up. The sole problem of what you propose is the programming of the payroll software itself. The real problem is lack of foresight on the part of the software developers. Most of them go for the 90% solution... it works for 90% of possible customers (who happen to have plain vanilla match) and they don't spend the time to program functionality for the 10%. You're more likely to find more flexibility/features in a stand alone payroll package than in one that's bundled in an accounting program. Sadly, 401(k) deductions and match are a poor step-child in most payroll softwares; it appears hard enough just finding one that properly handles tiered match. I worked for 8 years in 401(k) administration at a major oil and gas company. One of their plans had a YTD match like you propose (the match formula was different but that's not relevant to my comments). We used SAP and had to pay programmers to build custom code to go into the database and get YTD deferral and YTD eligible earnings from the prior payperiod. Sure, the software goes and looks those same things up when it updates the totals, but, in the developers' linear thinking, that occurs at the end of the payroll process so the numbers needed aren't available in the middle of the process. So to directly answer your request for comments on how it jives w/ 401(k) rules... it works perfectly well w/ the rules but the devil is in the implementation of it.

I believe that Social Security's number verification service will report whether someone is listed as deceased in their system.