K2

If this was a solok then the Profit sharing part would be limited to the deductibility limit of 25% of $70,000, or $17,500. The total allocation to the owner/participant would be $35,500. If catch up eligible, add another $6,000. The actual 415 limit is $53,000 for 2016. Take out $18,000 in deferrals and there is $35,000 left. Plus again $6,000 if catch up eligible.

I'd start with the idea that to qualify for a hardship, you have to demonstrate that you have no other funds to satisfy the need. The existence of the prior loan shows that there were other resources available to satisfy the current need. The current need could have been satisfied with the proceeds of last year's loan. So there were resources available to pay this bill. I would be tempted to deny the loan on the basis that money was available. Then I'd also be concerned about whether or not the unpaid property taxes need to be paid in order to avoid eviction. Presumably that's the justification for the hardship, that failing to pay the property taxes will lead to foreclosure and eviction. But that did not happen last year, apparently, so I'd be asking for additional documentation as to whether or not failure to pay the taxes would lead to eviction. I think if the plan sponsor has reason to believe that the funds won't be used for the satisfaction of the hardship, then the loan shouldn't be granted. The fact that the previous loan wasn't used to satisfy the hardship would give me pause. Perhaps as someone suggested that if the participant really does need the loan, the plan could pay the proceeds directly to the taxing agency rather than to the participant. Just some thoughts. I'd be tempted to deny it, but would want to work with the participant so that if they truly do have a hardship that they can get the loan.

The two year period on the excise tax starts when the Simple IRA is first funded, so all of the account balance can be rolled over to the 401k. Don't forget to notify the employees and IRA custodian that the Simple is being discontinued. I think the deadline for doing that is November 2nd.

Unless there is a significant difference between the two, I bill on participants with a balance at the end of the quarter or year, depending on the billing cycle. I don't get any questions when I bill that way. I don't currently have any plans where this is a big difference. The last time I did, I billed on the participant head count. They eventually terminated their plan

As long as the first plan year is 3 months long, and this is not a successor plan, then I think you are fine. You are adding a CODA for the first time on 4/1, which is permissable under -3(e)(2).

Thanks, Bird. Yes, we use a payor account for all distributions, and everything is filed under the payor ID. So there was never any use for a Trust EIN.

A couple of years ago I stopped applying for a Trust EIN on new plans. I did this for a couple of reasons. First, it wasn't reported anywhere ever since the schedule P went away. Second, it was upsetting to client's when they would get letters from the IRS saying their trust EIN was no longer valid. Finally, it was upsetting to clients to get letters from the IRS saying that they failed to file a 945. So, now I see the IRS is look for a Trust EIN and name beginning with the 2012 filing. Is there a way to look up my old EIN's and see if they're still valid? Should I go back and get EIN's for the plans that don't have them? Should I just leave this blank? (It's optional). Thanks!