Lou S.

Bird, I though they made ROTH Conversions irrevocable a few years back. I agree with Cuse fan but it seem like the conversion itself is an excess IRA contribution and you would withdrawal the excess from the ROTH under the IRA procedures +/- G/L for withdrawing excess IRA contribution before the due date of the tax return.

I think they have made this needless complicated and introduced the potential for errors from: the participant, the payroll departments, the payroll company, the TPA, the custodian, and the educational materials and or deferral election forms and systems. That's not to say that these errors will happen but there is the potential for them at multiple steps in the process.

I'm pretty sure he will require a T-H minimum as he was an eligible for participant for of the year, was not a key employee, and is still employed on the last day of the plan year year so he would appear to fall into the 416 definition of who must benefit. And the TH minimum is on 415 compensation so that would be his full year comp maybe I'm wrong but that's been my understanding of TH. And that will also a trigger a gateway for the individual since he's a NHCE. At least that would be my understanding. And as for the gateway the 5% rule is on 415 comp but the 1/3rd rule is on 414(s) comp which could be different. Though I think for gateway you can limit to comp while a participant if you do that uniformly for all participants. You can ask FIS how their document addresses the situation.

Sole Proprietors don't receive W-2 from their sole proprietorship, they have earned income that is reported on Schedule C. Since you said he has S-corp pass through income I'm going to assume you mixed up Sole Prop and S-corp. But who knows maybe he has both for some reason. The answer to your question that the accountant should be able to tell you is to increase in 415 limit he'll need to pay himself higher W-2 wages (or have higher earned income if it really is sole prop) instead of dividend or distribution income from the S-corp. I mix up the correct term on distribution/dividend because I'm not a CPA but his CPA should be able to tell you.

Sounds like it might be legit if it is about Login.gov which seems to be a thing that US government agencies are using. I had to set mine up for PBGC last year but I'm pretty sure it ties into multiple government logins. That said I have not seen this particular email and can't confirm it's not a scam. As always if you're concerned and it is something you do use, I'd suggest not following the links but go directly to the website URL in question that you know is legit to verify.

Secure (1.0?) might have already brought a number of those into the plan as of January 1, 2023...at least for eligibility for 401(k).

SECURE extended the deadline to adopt to due date of the tax return with extension. Though if there is a 401(k) component, you can't make the 401(k) contributions retroactively.

You still need to comply with 415 limits and the overall employer deduction limit is going to be capped at 25% of pay under 404. Just because you have a match instead of a profit sharing doesn't get you around the limits. That said if you have a REQUIRED match in the document it might force you over the 404 limit on deductible contributions and force a nondeductible contribution subject to an excise tax which might be one reason some "solo-k" documents don't allow matching. For example say you have a document that that requires you match deferrals dollar for dollar with no cap. And have the following set of facts - W-2 owner (only employee) pay $20,000. W-2 401(k) contribution $10,000 Employer required match $10,000 The match is clearly required by the document and clear not in violation of 415 limit so it has to be made. But compensation is only $20,000 so the 25% deductible limit on employer contributions is 25% or $5,000. Therefore $5,000 of the match would be required but non-deductible and also subject to a 10% excise tax. Not an ideal result and not a set a facts you'd be likely to see but just an extreme example of what could be allowable and still get you a bad result.

Then you are a reading a document that doesn't allow for matching contributions. A Solo-K is simply a marketing term describing a 401(k) plan that covers only the owner. But often times it just has has limited document choices about that is offered in the document and may not offer everything that might be allowable under the code.

I've always sent them in UPS or Fed-ex and have not had a problem. Knock on wood. But yes electronic filing of 5558 would be a welcome change.

After tax voluntary contributions can be made if allowed. They are considered an annual additions under IRC §415 and must be tested in the ACP test. So if is a one person plan you don't really need to worry about ACP testing but you do need to be mindful of 415 limits. And obviously you need to track the source separately along with the after tax basis.

I have a custodian who did a total distributions this year (2022) for two people (both NHCEs both had RBDs of 4/1/2023) that were rolled over but each had a RMD that was supposed to be processed prior to rollover. I'm pretty sure the fix is that the participants need to be instructed to remove the RMD plus earnings from their IRA as an excess IRA contribution and the Plan needs to issue two 1099-Rs one for the taxable amount of the RMD with code 7 and the other the rollover for balance. Is this the correct fix? Is this an eligible fix under self correction or does it require VCP filing? It's not like the Plan can make an RMD from their remaining balance as the remaining balance is now $0.00.

Did you have covered employees those years? In which case you were supposed to file form 5500 or 5500-SF instead of 5500-EZ which would be filed under a different late filer program through the DOL. Or were you 1 person plan but your assets were less than the amount required to have to file the form those years? If so, then you would have reasonable cause to get the penalties waived as the returns were not required. I'm unclear why they would tell you those years are ineligible.

You are past the time to make a 2021 PS allocation.

The ERISA Plan Administrator (who is probably the Plan Sponsor in a small plan) is responsible for making the RMDs. While the potential excise tax is on the Plan Participant, failure to comply with §401(a)(9) is a Plan Qualification issue so get the checks issued and sent. Last time I checked the R sands for Required and participant consent is not required. If she just retired or turned 72 and this is her first RMD you have until 4/1/2023 to get it done. If it's an on going thing you have until 12/31/2022.

I don't know the cite but I do know that it's been a provision in our prototype document going back at least to the GUST document (and probably earlier) that you could have rollover money available for distribution at any time or subject it to the any other restrictions you general have on in-service distributions.

Won't you lose the safe harbor exemption if you terminate it 12/15? Is severance required or discretionary? If it's discretionary why doesn't the Dr. simply reduce it by 3% and make the contribution?

Not without amending the plan.

What type of plan? What sources of fund are in the plan? Certain sources are only eligible for in service on after age 59.5, other sources can be withdrawn earlier if the plan allows and and you meet certain conditions.

If that's what your document says, I would think annual compensation would control for calculating the match.

Read the document. What you are asking is allowable and should be addressed in your plan document as to who will receive a QNEC/QMAC and how it will be done.

Facts and Circumstance on whether a new issued notice over riding the prior notice would be considered timely. The more documentation that you can detail that employees received the updated notice and had an effective chance to change their deferral election before 1/1, the more likely you are to be OK under a facts and circumstance determination. But yes you're past the "safe harbor period" for providing the safe harbor notice.

I believe you have coverage failure and will need to give PS contrib to NHCEs. Might be a good time to suggest SH match for 2023. And may want to suggest a 3% PS for all in 2022.

I think it's the increase you need to exclude from the cushion for 2 years. Since the plan was frozen than all of the new accrual in 2021 and 2022 would need to be excluded when calculating the cushion amount.

Look at §416 on who must receive a top heavy minimum contribution in a DC plan.