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J Simmons

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J Simmons last won the day on November 27 2013

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  1. IRA funds were drained by the owner's son hacking into her IRA account online. Son took the money, a police report was filed, and son is facing felony theft charges under state law. The money is gone; used to pay off gambling debts. The IRA custodial institutions were notified. They are investigating. The IRA owner has now received from those institutions Forms 1099-R reporting the funds taken by the son as taxable income to the IRA owner (the parent). It would be adding insult to injury if the IRA owner has to pay the income taxes due on the stolen funds. Any suggestions on how to handle these Forms 1099-R with the IRS?
  2. Small employer group health policies have, since ACA, been allowed to impose no more than a 90-day waiting period on new employees before they must be offered coverage. 42 U.S.C. 300gg-7. Can a small employer offer coverage in that time frame to a new employee, but it would require the employee to pay all of the premium expense until say 1 or 2 years of employment have passed?
  3. High earner under age 50 works for two employers. For 2023, he electively deferred $22,500 into one employer's 401k plan as Roth. In the other, he electively deferred $7,500 as tax deferred. He will have to have $7500 returned to him. Is there any ordering of such, i.e., Roth before tax deferred or tax deferred before Roth, that must be followed or can he choose whichever?
  4. I am tasked by a client with getting the ACA 1095 (and 1094) filings done (way late) for years 2017-2020. I am looking software suggestions. Thanks in advance.
  5. For 30+ years, I drafted plan documents for clients and consulted them when issues arised. Most of my clients (small professional practices) used a local investment adviser/broker to invest plan assets, and a local accounting firm to perform allocation/testing computations and Forms 5500 and SARs. Some time ago I notified my plan document/consulting clients that I would no longer be a provider of plan documents, though am yet available for design, operations and fix-it consultations. Since July 1, I've been contacted by a few 'procrastinators' looking for a source of just plan documents for Cycle 3 restatements and later updates. If you so provide documents separate and apart from other services, and would be interested in either referrals from me or providing a document with me involved in the design, please e-mail me at johnsimmonslaw@gmail.com. Thank you
  6. Happy holidays! The situation I am posting about involves a professional practice that is composed of an LLC that employees the staff and separate S-corporations, one each for the professionals who also collectively own the staff LLC. The staff LLC has a safe harbor 401k; in addition to a 3%-of-pay safe harbor contribution, the LLC pops in another 2%, establishing a 5% gateway minimum for cross-testing. Each of the professionals' S-corporations has an identically drawn up 401k plan that permissively aggreates with the staff LLC's 401k, to allow the S-corporation to make a cross-testing determined contribution to its plan for its only employee, the professional that owns the S-corporation. One of the new professionals did not coordinate into this situation, but was convinced by an investment adviser to have her S-corporation instead set up a SEP-IRA to which she then make contribution for 2020 and 2021. We're hoping to get the 2021 contribution, and investment earnings, paid out to the S corporation (and hopefully the financial institution won't report either the 2021 contribution nor its return to her. If so, her S corporation will simply include that amount in its taxable income for 2021). 2020 might not be so easy. Because of the affiliated service group rules, the staff LLC employees would be included as benefiting employees in that professional's S-corporation's SEP-IRA. If the contribution for the professional was say, 8%, of her 2020 W-2 wages from her S Corporation. There might be a contribution due from the staff LLC to that SEP-IRA of 8% of their pay. I am hoping that we can simply undo the 2020 contribution, have the financial institution regurgitate the 2020 contribution, the S-corporation and professional amend the 2020 Forms 1120-S, W-2 and 1040 to reflect the additional income. Is that possible? If it is not, rather than 8% for all the staff LLC employees having to be contributed, can the dollars that make up that 8% be re-allocated among that professional and all staff in proportion to their considered compensations?
  7. The situation is this: Calendar year plan is sponsored by calendar year company A. An affiliated service group member, company B, has a fiscal year end June 30, with tax return due Sept 15. My understanding is that company B may make a contribution to the plan for, say, plan calendar year 2020 as late as Sept 15, 2021 and deduct it because part of the plan year (July 1-Dec 31, 2020) fell within company B's fiscal tax year (July 1, 2020-June 30, 2021). Is this your understanding? Is there a specific IRS ruling to this effect? (Obviously, company A's contribution for plan calendar year 2020 would have been due by Mar 15, 2021.)
  8. Employee A quit the day before PY 2020 began. It was not until a week into PY 2020 that the company paid A for his unused vacation pay. The plan has a 401k safe harbor 3%-of-pay featyre. Does A accrue 3% on his unused vacation pay paid in 2020?
  9. New client spaced off both EGTRRA and PPA '06 restatements. Does it take two or just one VCP application/fee to correct?
  10. I have been asked to assist in a situation where a solo 401k plan had loans taken from the plan without promissory notes, pledges of account balances, etc. The loans at one time years ago exceeded $50,000. Repayments have not been made. The sole participant now wants to withdraw what benefits there are and close the plan. It has been a couple of years since I prepared any corrections under EPCRS for any plan failing, much less one like this. Any insights and suggestions will be greatly appreciated to get me started off in the right direction.
  11. 100% owner of an LLC business that has a 401k plan also has two household services employees (W-2). Do the two household employees count as employees under the control group rules, or is there an exception where their employment is not in the pursuit of a profit?
  12. H divorces W1. H names children from W1 as death beneficiaries of his 401k plan benefits. Then, H marries W2. Three years later, H dies. Does W2 have any spousal rights to the death benefits? I.e., does H's later marriage to W2 trump his previously having named the children as death beneficiaries?
  13. I have a few questions for those who may use the Ft. William Volume Submitter Profit Sharing Plan With CODA, specifically the one that does not involve a prototype, lead document and adoption agreement. If you do, please contact me offline at johnsimmonslaw@gmail.com. Thank you
  14. I think that the plan fiduciaries do have a continuing 'paternalistic' role in deciding which investments should and which should not be included. John Deere gave 2,600 choices to its employees. The 7th Circuit, as I recall, indicated that the plan fiduciaries are yet responsible for making sure that the choices presented to the employees on the "menu" from which they select are appropriate for retirement savings investments by employees. I do think the fiduciaries have a role in evaluating an investment as a potential 'menu' item. If something is too risky, or perhaps so conservative as to yield too little of a return, the plan fiduciaries should avoid it being on the menu. I'd be concerned about a single company, particularly if its product focus is narrow in one industry or economic sector.
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