415 Limit
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Thank you Bri!
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I know this has been asked 1,000+ times, but I'm still not clear on the correct way to start the calculation of an individual's net earned income in this situation: LLC taxed as a partnership Schedule K-1 Line 14A = self-employment earnings (starting point) Is then Section 179 deduction on Line 12 of the K-1 backed out from Line 14A, or no? There are no oil and gas depletion expenses, nor unreimbursed partnership expenses from Schedule E according to the CPA.
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Company A and Company B are owned 50/50 by the same two individuals. Each Company sponsors their own 401(k) plan (Plan A and Plan B), neither which are safe harbor. The owners and their spouses are eligible to participate in both plans. Plan B only employs the owners and their spouses. Plan A runs on a fiscal year ending 7/31, Plan B runs on the calendar year. It's my understanding that we have to ADP test these plans together, but I'm unclear on how to do this. Do we need 7/31 census data for the calendar year plan and then run the combined ADP test, or do we need 12/31 census data for the 7/31 plan and then run the combined ADP test, or? Sorry if this is an elementary question but I just can't wrap my brain around this. Mandatory Aggregation • Mandatory aggregation of HCEs is required when an HCE is eligible (not just deferring) for more than one 401(k) or 401(m) arrangement • Mandatory aggregation of HCEs is not applicable if the plans cannot be permissively aggregated (i.e., mandatorily disaggregated groups – union/non-union). However, mandatory aggregation of HCEs still applies if permissive aggregation is not permissible due to different testing methods, different plan year ends, or one plan is safe harbor.
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Fidelity Investments - Contact Info
415 Limit replied to 415 Limit's topic in Retirement Plans in General
Thank you for sharing your experience, Tom. I still find it hard to believe that they don't have a dedicated phone and fax number & e-mail address to reach a representative in the correct department (they shouldn't offer these types of accounts if they can't properly service them). -
Hi there, We are a TPA taking over a 401(k) plan that has a handful of self-directed brokerage accounts at Fidelity (the "F" word). The existing Fidelity accounts are "non-prototype retirement accounts". Has anyone had any luck in getting a hold of knowledgeable representatives at Fidelity in the correct department that can answer questions about these types of accounts, and if so, what phone number (and extension) have you been successful with? I've tried different numbers and have had mixed luck with general questions. My goal is to try and save the Plan Trustee some time on the phone by getting him connected with the correct department / representatives from the start. 800-544-5373 800-756-0128 800-835-5095 800-544-6666 800-343-3548 What about a fax number (years ago we used to use 800-347-2805 but this may no longer be valid according to a few people I've spoken with). What about an e-mail address for the Service Support Group (SSG)? Thank you!
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Thank you, Lou, I understand and appreciate your input.
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Lou, thank you so much for your valuable input. All excellent points you mention and also stating the technical (correct) terminology. What exactly do you mean when you say 'And any limitations on amending mid year in or out a safe harbor would apply as if you had a single plan', can you give an example?
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An Employer is in the process of establishing a new single employer plan (401(k)) effective in 2023. They will spin off (not terminate) from a PEP that they are currently in and transfer the assets from the PEP into the new plan. They do not have a safe harbor provision in place in the PEP, but they would like to add a safe harbor provision to the new plan for 2023. Is this permissible? How would the ADP testing work for 2023, would they need to test separately in the PEP for the short period and correct via refunds / QNEC (assuming the test fails for the short period), or are we permitted to test the entire year under the new plan (and the safe harbor provisions, assuming this can be added to the new plan in 2023)? Any input would be greatly appreciated. Thank you very much.
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Someone (Paychex) convinced a very small Employer to join a PEP containing an EACA provision in early 2022. The ADP test fails (terribly) for 2022 so the goal is to get them out of the PEP and establish a new single-employer plan with a more meaningful plan design as soon as possible. Can they leave the PEP mid-year (i.e., now) or do they have to wait until 12/31/2023? The plan document doesn't specifically address leaving the PEP. They intend to transfer assets from the PEP to the new 401(k) plan, so would this be accomplished through a 'spin-off' (vs. plan termination)? What is the earliest effective date the new single-employer plan without automatic enrollment and including a safe harbor provision can be established? Any input would be greatly appreciated. This is all new to us. Thank you very much.
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Plan year runs from 7/1 to 6/30. During calendar year 2017 a 44 year old participant deferred $18,000 pre-tax 401(k) plus $4,500 Roth 401(k) (total = $22,500, see breakdown below). The famous payroll company neglected to report the Roth deferrals in box 12 of the W-2 (AA) so this was not caught until after 4/15. Between 1/1/2017 - 6/30/2017: $5,200 pre-tax 401(k) plus $3,900 Roth 401(k) (total = $9,100) Between 7/1/2017 - 12/31/2017: $12,800 pre-tax 401(k) plus $600 Roth 401(k) (total = $13,400) Are we permitted to distribute the $4,500 in excess deferrals from Roth? Is it relevant that all but $600 in Roth deferrals were made during the prior fiscal year (6/30/2017)? Thanks for any input.
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Excluded Employees & Top-Heavy Contribution / Minimum Gateway
415 Limit replied to 415 Limit's topic in 401(k) Plans
Thanks Lou S., that was our interpretation as well. -
Calendar year 401(k) plan (not safe harbor) is top-heavy. Plan has a participating employer effective 1/1/2014. All employees are eligible to make 401(k) deferrals after meeting the plan's eligibility requirements (1 YOS/age 21/semi-annual entry). PS is cross-tested (separate allocation groups for each participant) w/last day & 1,000 hour requirement. For 2015 can we amend the plan to exclude the employees of the participating employer for just the PS component of the plan (coverage will pass), and if so are they required to get the top-heavy minimum contribution & the minimum gateway contribution for the year?
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Primary Residence Loan & Extra Payments
415 Limit replied to 415 Limit's topic in Distributions and Loans, Other than QDROs
Thank you for your input. I agree with all of your comments (especially the first one!) I have asked to schedule a conference call with their legal department & will see what they say. -
Participant took a $50,000 loan from her 401(k) account that uses a reputable recordkeeper. The primary residence loan is amortized over 30 years & the regular payment is $137.99 each pay period. About a year into the loan the participant starts making larger payments ($600 per pay period) so that the loan can be paid off much sooner. The new, higher payment amount is consistently the same and will continue through the duration of the loan until it is paid off. The recordkeeper has been applying all of the extra payments amounts to interest & has not reduced the principal balance. The recordkeeper claims that the interest on the 30-year loan is a fixed dollar amount and must be paid regardless of if the participant is making larger payments, & they claim they have no way of rebuilding or re-amortizing the loan unless the loan is physically paid off with cash. Aside from the TPA tracking the loan and having the recordkeeper write off the "balance" at the end once the loan is truly paid off (if the recordkeeper will allow this), has anyone else come across this situation or have any thoughts on a workaround? Thanks for any input.