thepensionmaven

Even after the client receives a bill for $15,000???

Circumstances? How about stupidity, as the amount they contributed did not bear any relationship (2x,3x, etc) to the amount due. I for one, do not believe this to be a "mistake of fact" and that is why I advised the client to leave the money in the plan. Thanks.

We use Datair for admin, 5500s and plan docs. No complaints.

Thanks, Larry, that is exactly what I did. Technically, then, the EIN for the sole proprietorship never goes away??

Employer was given the calculation for employer SHM contribution for 2017.They contributed about 2X as much to participants' individual accounts and want the money returned. The fundholder told them they could have the excess returned as a "mistake of fact" and send the employer the proper form to be completed. I would not consider this a "mistake of fact" solely on the basis that the funds have already been allocated to the participants. I would like to advise them to keep the money in the plan, use the same amount for 2018 SHM that was used for 2017 and allocated the difference as an employer profit sharing contribution. The total employer contribution (PS and SHM) is within the 25% limitation. Thoughts??

Client has been self employed and incorporated in 2014 with new corporate name and EIN. Forms 5500-SF had been file under sole prop as sponsor with the corresponding EIN for 2014-2016. Amending 2016 is no problem, how would 2014-2015 be handled? 2016 show new sponsor and EIN, enter old information in box 4 from original filing. 2014-2015 to be done similarly? I don't see why not, with DOL, but one never knows with IRS.

So, to be clear, if we file with DOL under DFVC pronto and pay penalty and forward the filing to IRS with Acknowledgement ID and date, plus letter of explanation - reasonable cause - that should theoretically, at least, IRS and no penalty?

Apparently was not filed at all. I suggested filing under DFVC and paying the $750. Client must have received previous notices and ignored them. Are you saying that would not solve the issue? The accountant is the brother of the client.

CP 283, just a bill with a tear off payment slip

I was thinking about that. Can we do that at this time, especially after a $15K IRS fine? I assume the client should file under DVFC, pay the $750 and then send a copy of the filing to IRS at the address on the invoice? That should be satisfactory with IRS?? TX.

Form 5500-SF for 2013 was prepared for a client and filed late by about 2 weeks. Apparently client has received more than 1 Notice from IRS as he just emailed an IRS bill for $15,000. What is recommended here?

This is not a 401(k) plan, just a plain, straightforward profit sharing plan, one participant.

So I assume Box 1 is correct?

Employer maintains a profit sharing plan, no employees. Box 1 of his W-2 includes health insurance premiums; boxes 3 & 5 do not. Employer wants max deduction (and who doesn't?) Would his 25% be based on Box 1 or Box 3? Accountant seems to think Box 3.

We have a participant in one of our 401K plans that is requesting a hardship withdrawal that does meet the safe harbor criteria, but he has an outstanding loan. Does this preclude him from a hardship distribution, since the current loan has not been repaid?

Apparently the payroll people did not cut him off at $18,000 in the calendar year so the excess must be refunded?

Am inclined to agree with QP_Guy.

Actually, finally, per accountant, ADP did not cap him at the $18K so he contriubted too much in 2017, elective contribution, so there is no way to credit excess to 2018 Therefore, he gets a 1099R for excess contribution as well as earnings on excess, problem solved. Thanks all.

Fund-holder notified client he over-shot his $18 due to the fact the payroll company did not cut off his payments at $18 for the year. They refuse to do the excess earnings calculations. Is it out of the realm of possibility to use the VFCP Calculator for this purpose?

Actually, the accountant informed just now that she was referring to the elective deferral of the principal, shareholder of PC. Apparently he contributed more than $18K during the year, the difference is the balance of the 2017 contribution, which was made Jan-March 2017. Apparently the payroll company did not catch this. I don't believe there is any way around a 1099R; but I believe if he were a sole prop, he could have until the due date of his tax return.

We were just notified by a brokerage firm that our client, sole shareholder of his PC apparently over contributed to the employee portion of the plan. When reviewing the contribution history from 1/1/2017 - 12/31/2017, it would appear as though the balance of his elective contribution was for the prior year. He is not eligible to make catch-ups. I know that sole proprietors have until the due date of the business tax return including extension to contribute to the plan, including any employe contributions, but I do not think that applies to shareholders?

We've got a SP dentist who sponsors a SHM 401K, he contributed for 2017 as well as 2018 in 2018 toward the employer match. Of course the fund-holder directed the funds to the proper participant accounts. Now that the employer has learned he contributed too much, he wants to either have the excess removed and a check cut back to him or to have the funds transferred to his own account. We explained no-can-do, the money has already been deposited into the participants accounts and you can't remove it by claiming it was a contribution made in error. As far as removing and re-depositing into his own account, we cited 401(a)(4) benefits, rights and features. He wants to know why he can't contribute to his account now and to the employees' either later in the year, or by tax filing deadline for 2018. Need a cite, please.

Account treats two companies as totally separate entities. The companies in addition to sharing the same 6 digit SIC code and both essentially are in the carting/waste removal business. 1 co owned 50/50 by husband and wife Co 2 owned 50/50 by their two sons, over 21 years of age. The two sons, in addition, work for co 1. In addition, there is one shared employee. We have been treating the plans as a controlled group/ASG and combining the two for (a)(4) as both plans are New comparability PSPs. CPA does not agree. Is there a specific example in the regs I can show this guy?

Terms of plan are age 21 with 1,000 hours. Period. Seems like coverage has been passed?

A 100% owner of the business has a 401K with less than $250K in assets. She also has an employee that does not work and has never worked over 1,000 hours. Under plan characteristics code, there is an item 3(e) - one participant plan that passes minimum coverage, which seems to apply here. Payroll company seems to think Form 5500-EZ must be filed.