masteff

You should really look at the publication linked to above, specifically Worksheet 1-2. Your ability to make a deductible contribution might be limited as well.

Relevant prior discussion: http://benefitslink.com/boards/index.php?/topic/25857-plan-loan-for-construction-of-house/

Here's a more even toned article: http://www.investmentnews.com/article/20140122/FREE/140129965

Since you've now gotten a couple of competent answers, I'll add... If this is the first time you've gotten angry about executive compensation in the USA, you've not been paying attention. http://en.wikipedia.org/wiki/Executive_compensation

http://www.irs.gov/pub/irs-tege/forum10_simple_ira.pdf I'm leaning towards SCP correction of the SIMPLE, but I can't make that determination for you. The correction would be to make the deposit now plus corrective earnings since Jan 30th.

You might see if you can fall under SCP, see pages 19-21 here: http://www.irs.gov/pub/irs-tege/simple_fixit_guide.pdf I'd weigh other options before doing a full VCP. How much comp does she have? Have you looked at an SEP IRA instead?

1) A catch on hardships is you can only withdraw employee deferrals, not earnings. So even if you kept your employee money in a separate brokerage account, you'd have to know how much was contributions to be able to take a hardship from it. http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Hardship-Distributions 2) Some investment firms offer solo k plans with basic recordkeeping for little to no extra cost (for example, Fidelity). Have you looked at those? 3) Speaking as a CPA, not as a TPA, recordkeeping the sources for just yourself doesn't have to be complicated. You could do it annually and do a ratable allocation of earnings to each source. This works well enough if your EE and ER contributions are made at the same time (whether spread thru the year or on a single date). It's less perfect if you make them on significantly different dates. A basic example of spreadsheet columns using only EE: Current Year EE Contributions, Total EE Contributions, Current Year EE Earnings, Total EE Earnings, Total Account Balance (which should match your account statement). You'd need similar columns for ER and Rollover. You'd have a row per year and just roll it forward from year to year. If you took a withdrawal, you could add a column, such as: Current Year EE Distribution. (You can see how doing this by pay period for more than a couple of employees would get complicated to the point of paying a TPA to do it.)

I would hope we can convince you that you should get cold chills when someone wants to put real estate into a retirement plan. http://benefitslink.com/boards/index.php?/topic/53711-illiquid-asset/ How will you value the asset? How will you handle a distribution? What cash is available to pay the ongoing expenses of the property (taxes, insurance, etc)? You say the "principals" want to the make the investment. Are other participants going to be permitted to invest? Have you evaluated if this creates discrimination (BRF test)? In theory they could apply to the DOL for an administrative exemption to lease the property from the plan. No idea what that process entails. http://www.irs.gov/irm/part4/irm_04-072-011.html http://www.dol.gov/ebsa/publications/exemption_procedures.html

Yes, you can do an SEP IRA. No, the W-2 has no negative effect on doing an SEP IRA. This IRS page may be helpful too: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-SEPs-Contributions

The participant lost control of the money on the pay date in February. The payment was effectively submitted to the employer aka the plan sponsor who became legally obligated to fund the payment into the trust.

The instructions on Form 5305A-SEP discuss the treatment of excess deferrals in an SEP. Basically, that since they were not w/drwn by 4/15 of the following year, they are treated as excess IRA contributions. The excess contribution is subject to the 6% excise tax. And since the earnings were not w/drwn by 4/15 of the following year, then those earnings are subject to the 10% early w/drwl penalty. http://www.irs.gov/pub/irs-pdf/f5305ase.pdf And see page 2 of the instructions for Form 5329: http://www.irs.gov/pub/irs-pdf/i5329.pdf

See page 2 of the instructions for Form 5329. Earnings related to the excess contributions are subject to the penalty.

With a little searching, you can find past discussion on this board about whether or not an MRD must be made ratably from sources or if either a hierarchy or participant-choice could be used. Most of the prior discussion had to do w/ whether a person could use up after-tax money first to satisfy their MRDs. I'd have to refresh my memory but the point of contention had in part to do w/ whether the MRD constitutes, not sure of the exact term from the past, an annuity based on age or stream of equal payments or some such that triggers a specific bit of IRS Code that mandates ratable distribution. Not sure that a clear conclusion was ever reached.

You need to identify where in your document it excludes union employees and how it defines that exclusion and what it excludes. For example, I would expect it to exclude at the employee level and not at the comp level.

http://www.irs.gov/Retirement-Plans/Employee-Plans-Compliance-Unit-(EPCU)---Current-Projects---Improper-Deductions-Project

Additionally, for it to not be subject to the 10% early w/drwl penalty under Section 72(t), it has to meet the definition of disability in Section 72(m)(7). That definition is basically "total and permanent". Some plans use an external qualification, such as approval under a long-term disability plan or for Social Security disability.

1) Pay careful attention to GMK's comment about filing an appeal and specifically to follow the plan's appeal process. Failure to follow it can limit further recourse. 2) From CMS.gov: "A qualified beneficiary first becomes entitled to Medicare benefits upon the effective date of enrollment in either Part A or Part B, whichever occurs earlier. (26 CFR Sec. 54.4980B-7, Q&A-3.)" 3) Also from CMS.gov: "Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a Title X provision that provides continuation of GHP [Group Health Plan] coverage if elected. For aged or disabled Medicare beneficiaries, COBRA continuation coverage is secondary to Medicare because the coverage is by virtue of COBRA law rather than by virtue of current employment status. For an ESRD related Medicare beneficiary, COBRA continuation coverage if elected, is primary to Medicare during the 30-month ESRD coordination period. See 42 CFR 411.161(a)(3) and 411.162(a)(3)."

Seems to me that you have 2 separate questions... 1) Is it generally permissible? 2) Given what the plan document says, can I do it anyway? I'm going with: from what the others said, yes, it's permissible in theory, but you can't violate your plan document.

Not sure if EPCRS says anything but see 1.401(a)(31)-1 Q&A-14. (Hopefully I'm not the only one who still recalls when that particular item was change in 1999 http://www.irs.gov/pub/irs-regs/24556296.pdf Of course it directly impacted me as I was waist deep in learning plan admin at the time.) I personally would want to search any and all records to see what type of assertions or certifications the participant provided when making the roll-in. The "hard nosed" position is likely to tell the participant he has to sort it out on Form 5329.

While there may be some odd scenario that doesn't come to mind, generally speaking, post-EGTRRA limits on after-tax contributions come from either the annual additions limit or are plan defined. While EGTRRA allows a plan to permit 100% of comp to be contributed, many plans set a lower % to avoid messing up other payroll deductions. At my former employer, we did 50% pre-tax and/or after-tax combined. The plan had an annual match so that wasn't an issue but we did have to create a worksheet so people wouldn't over contribute after-tax money and cheat themselves out of said match. If anyone wants, they can send me a private message and I'll provide a link to the current SPD for that plan. See also: http://www.bogleheads.org/wiki/After-tax_401(k)#After-Tax_401k_limits

Annual comp is the default. Find something that shows they affirmatively elected to use pay period comp for match. It might be related to the definition of comp or an option under the match formula. Does anything in the AA clearly specify a pay period match based on pay period comp? Q&A-2 in IRS Notice 2000-3 (emphasis added): Q-2. Can a 401k safe harbor plan match elective and employee contributions on a payroll-by-payroll basis (instead of on an annual basis) without making additional contributions at the end of the year to take into account the total amount of an employee's compensation for the plan year? A-2. Notwithstanding section VII.A. (or any other provision) of Notice 98-52, the requirements of sections V.B.1. and VI.B. of Notice 98-52 that relate to matching contributions may be met for a plan year by meeting such requirements either (1) with respect to the plan year as a whole, or (2) if the plan so provides, separately with respect to each payroll period (or with respect to all payroll periods ending with or within each month or plan-year quarter) taken into account under the arrangement for the plan year (the "payroll period method"). If the payroll period method is used, however, matching contributions with respect to elective or employee contributions made during a plan year quarter beginning after May 1, 2000 must be contributed to the plan by the last day of the following plan year quarter. Accordingly, in the case of a calendar year plan that uses the payroll period method, matching contributions with respect to elective or employee contributions made during the calendar quarter beginning July 1, 2000, must be contributed to the plan by December 31, 2000. The payroll period method applies only for purposes of satisfying the ADP safe harbor matching contribution requirements of section 401k(12) (section V.B.1. of Notice 98-52) and the ACP safe harbor matching contribution requirements of section 401(m)(11) (section VI.B. of Notice 98-52).

Two different problems: 1) If you have a newer browser (I know it's a problem right now in IE 11), you might not be able to copy/paste in a message board reply. The solution is: click in the reply window, then click on the tool icon that looks like a grey light switch, it's the very first one. This will toggle between text and html mode. If you now go up to a post you want to quote, it will now appear in the reply window. Or you can now paste into your reply. You can toggle back to html mode if you want to use the other tools like underline or bold. 2) If you just posted a reply, you might not be able to edit it immediately. The solution is: I didn't think until just now to first try the tip above (toggle between text and html mode). Otherwise, click "View New Content" in the upper right, find and go to the message thread you just posted in, and now you can edit your reply.

One question for you personally to consider is what assumptions you made in originally taking that job? Did you include those several thousand dollars as part of your total compensation? As to other companies no having the same issue... as others have said, it's really not that uncommon. Frankly, an ADP/ACP refund is not that big of a deal. Personally, I'd rather over contribution by a couple percent and get a refund than to put in less than was possible. Since he won't go for a safe harbor, what about asking the owner to make up the lost matching in the form of a bonus? A bonus isn't tax deferred like it would be in the 401(k), but at the end of the day, it's cash. I wouldn't hold out for every last penny you lost; the key is bringing your total compensation closer to what you expect versus some other job you could go find.

To quote directly from the IRS page I linked above: "Because a SEP-IRA is a traditional IRA, you may be able to make regular, annual IRA contributions to this IRA, rather than opening a separate IRA account." The way I see it, you don't need Vanguard to do anything. On the amended return, assuming the client didn't make any other traditional or ROTH IRA contributions for 2012, you simply move part of the money from line 28 to line 32. It avoids tax on $5,000 if the client qualifies for the deduction.

If any of the money was contributed by April 15 2013, and if he's eligible to make a tax-deductible traditional IRA contribution (and didn't do so already), you could treat part of the money as such for 2012 given that it is permitted to make traditional contributions to the same account used for SEP contributions. This would reduce the amount of tax and possible penalty due. http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-SEPs-Contributions