Chippy

My employer's plan is terminating and I'm taking a small cash distribution and rolling over the rest to an IRA. My employer will NOT take federal withholding taxes from the cash portion. Isn't this required when taking a distribution? is there any repercussion for not taking the withholding? I guess I could up my deduction each pay to make up for it so I don't owe it all at the end of the year.

I was just notified on Friday, that a client is changing their fiscal and plan year end from 9/30 to 12/31, effective 12/31/2019. It's too late to prepare a 12/31/2019 5500, so do I prepare a 9/30/2020 val and 5500 and then do a short plan year of 10/1/2020 to 12/31/2020? Can I still amend the plan retroactively for a 12/31 fiscal and plan year end effective 12/31/2020? Thanks for your help

A client wants to fund the employer profit sharing with the PPP loan that they received. It's a new comp plan with 1,000 hour last day rule. What would be the best way to calculate the amount they can put into the plan? could it be deposited to the participants accounts or would they need a suspense account?

I submitted a form 5330 as of 12/31/2018, there were over 12 times that contributions were deposited late in 2018. They deposited the earnings in 2019 and all deposits are now on time. When filling out the 5330 for 2019, do I have to list each late 2018 contribution individually on the 2019 5330 or can I just put one date and use the total.

Can I file for an extension on a final 5500? I always thought you could not get an extension on a final 5500 but I can't seem to find that anywhere.

Two questions, I have a final form 5500-SF to file for 2019. The issue is there was an additional $5.29 in residual earnings that posted to the account after all the participants were paid out and the money was returned to the company in January 2020. Can I accrue for this on the 2019 5500-SF and mark it final, or will I need to prepare a 2020 5500-SF and that will be the final one. Next question, Large plan terminated as of 9/30/2018. Large plan audit was done for 2018, participants were paid out in 2019. Does the plan require another audit for 2019, no contributions, just distributions, if not, do I file a Schedule H again for 2019 but with out the audit attached? I've never come across this issue before. Thanks for your help

My lack of knowledge come with 1099 income. I have years of experience working with retirement plans, I have partnership plans, sole proprietors and corporations. My plans give me the k-1 income and the Schedule C. I've just never had someone tell me they only receive 1099 income. and this is 2nd hand information I've been receiving. Trying to help someone else out.

Larry, thank you. Since they are self employed, do they file a Schedule C?

Someone in my office got a call about maximum deductions for a 401(k) Plan. It's 2 participants, husband and wife, both doctors. They only receive 1099 income. I'm not sure they can have a 401(k) plan with only 1099 income to begin with. What type of plan could they have, if any. What limits would it be subject to? Could they have a DB plan with 1099 income? thanks for any help or point me in the right direction.

Can a non-spousal beneficiary withdraw more than the required amount? Plan does not allow for partial distributions after termination. The RMD is about $500 and she wants to take $5,000. IF she can, would the whole distribution be taxed at 10% or just the RMD amount?

So if the new company has 10 employees, 7 hce and 3 nhce, all will be covered under the new plan. Would that be discriminatory?

They are going to bring in all the employees of the new company. I think its 1 HCE and 8 NHCE. No discrimination as long as they met eligibility.

A current physician practice bought another practice in an asset sale. the Assets of the benefits plans were not included in the sale. May the new employer bring the employees of that plan into their plan immediately and count service with the prior employer for eligibility and vesting? Is a plan amendment needed? thank you

Can a plan be set up that the eligibility for Deferrals is greater than the eligibility for Safe Harbor non-elective? Deferral eligibility is one year of service and semi annual entry dates. SHNEC eligibility is one year, but immediate entry after one year. So someone hired on 8/17/2017 is eligible for the SHNEC on 8/17/2018 but not eligible for the deferral until 1/1/2019. Is that allowed?

I have a SIMPLE 401(k) Plan, one active participant. My contact reported to me that there were no deferral or matching contributions during 2017 or 2018. My contact left the company two weeks ago. The new contact has been reviewing files and it appears that the former contact did not fund the 401 (k) Plan. I'm not sure where the money went, but it didn't make it to the plan. Can this be corrected by self correcting? or should they file through the VCP Program? I'm not sure the best way to fix this would be. I've never come across something like this.

I have a current 401(k) plan, there are 6 doctors that own the current practice, company A. They are acquiring a new practice, company B; the new entity will be owned 80% by company A and 20% by the new surgeon at Company B. I think they will be considered a controlled group since Company A owns at least 80% of company B and can be part of the current plan with no problems. Am I thinking correctly? (Just need to amend to allow for participation and counting of prior service for company B.)

thank you. It was a stock sale and the new owner had no intentions of continuing the plan.

Working on the 2018 valuation for a balance forward profit sharing plan, I found out the company was sold in 5/2018 and technically the plan should have terminated as of that date. No one notified us of the sale of the company, A terminated participant was paid out in 3/2018 at 40% vested. They terminated in 2017. Since he was paid out prior to 5/2018, should he forfeit his non-vested balance at 12/31/2018 or be made 100% vested and paid out the remainder?

It fails on an allocation basis, passes on accrual basis.

I found a note, written by an attorney, in the file saying gateway testing must be done and pass using 415 because the allocation comp does not satisfy 414s. I didn't think that would trigger the gateway test but wanted a second opinion. Gateway is not passing because a few participants worked for two companies, one that made the profit sharing and one that did not. So using full year 415 comp their contribution percentage is less than 1/3 of the HCE.

Tom, is the compensation definition does not satisfy 414(s) and 415 comp is used for testing, would that make a difference, thus requiring the gateway test?

I have a controlled group, 3 companies, all three have a safe harbor enhanced match, and 2 of the three companies allocate a pro rata profit sharing contribution. I'm having problems passing gateway as a few employees work for 2 companies, one with the profit sharing and one that does not allocate one. Since the contribution is allocated pro rata, do I even need to run the gateway test. If I pass the average benefits percentage test, is that all I need to pass? the plan passes 410b as well.

Company was sold and plan was terminated as of 10/31/2018. None of the participants have been paid out yet. Plan has a calendar plan year. Eligibility to receive an employer non-elective contribution is 1,000 hours and employed on PYE. During 2018, Employer put money into a suspense account for allocation at year end. Since the plan terminated at 10/31/2018, would I allocated to the employees still employed on 10/31/2018? That was my first thought, but technically the PYE is still 12/31 but the employer did not exist at 12/31 and had no employees.

Are taxable fringe benefits such as premiums for group life insurance in excess of $50,000 excluded from comp? Does it make a difference if the fringe benefits are taxable or non-taxable? Comp definition is 3401(a) excluding reimbursements or other expense allowances, fringe benefits(cash and non-cash), moving expenses, deferred compensation, welfare benefits, unused leave.

By "My" plan, I mean 'im the TPA.