TPApril

New plan being set up. The EIN request was submitted and granted with an old address. Having never been used yet, is it a big deal to just forget the first EIN and get a new one? Or file form 8822b to correct the address?

No 5558 was filed for a calendar year plan. Their corporate taxes were extended and are due 9/15. I've never had a calendar year plan 5500 due on 9/15 but it would seem like that fits the definition of the Automatic Extension?

This is a legacy plan with a set of long time partners. One partner has an LLC investment that pays out dividends, but the K-1 has shown a negative balance for two years now, with the most recent year even more negative. Not sure how to treat this for calculation of total assets in the plan?

401(k) and corporate plan years end on 6/30. Plan fails ADP Test and excess contributions will be returned (w/earnings). What I'm unclear, and we do not share accounting advice as it is, but do those contributions still get treated as plan year 401(k) for corporate tax purposes?

Participant is under age 59 1/2 and has less than 5 years in the Plan. Participant took a hardship withdrawal and Plan Sponsor created 1099-R's splitting the h/s between both 401(k) and Roth. Plan Sponsor did not realize earnings on the Roth portion are taxable and they didn't calculate a taxable amount on the earnings of the Roth that were allocated to the H/S. They are asking now, after the fact, if the Roth portion of the H/S can be treated fully as basis. I looked in the Plan Doc but couldn't find that it specifies. It only says that a Plan Admin can choose how to order the money types. They chose to go prorata, and yes they are informing the TPA just now about this from last year.

okay maybe it's a silly question. Terminated participant receiving RMD's passed away with no surviving spouse. His daughter is handling his affairs but was never specifically set up as a beneficiary. Can she be treated as a Designated Beneficiary? fwiw, the account balance is under $1,000.

When running the ADP test, I recall it's easier to switch from prior to current year testing than vice versa. I also recall that it must be done by end of the plan year. I'm curious if there are options to change it from prior to current after the end of the plan year?

Brian - thanks! Revisiting this, since the wrap plan effective date is 1/1, we are treating opening counts for these prior individual filings as a 0 and no benefit arrangements.

Plan is wrapping all benefits into one new wrap plan 5500. So closing out the prior plan filings - it is unclear to me - since they no longer have benefits at eoy, I'm thinking we uncheck Insurance under Plan Funding/Benefit arrangements and just have General assets of the sponsor checked?

I resisted this for many years but finally realized for some of the smaller (and oftentimes older) clients, it's just easier. For clarification, because my original comment was poorly written - I always get the actual signature on the 5500-SF or -EZ. What I meant to more clearly refer to in my comment/question was the Authorization statement - all plan sponsors are required to sign such an authorization which is separate from the actual 5500 signature. I was just curious if, after all these years of e-signing and a transition of so much communication as electronic, if there was a trend towards simplifying that second signature?

So I'm in need of an electrician and my business happens to have an electrician as a client. What is a best practice protocol? I'm not interested in getting any kind of discount so I hesitate to inform the owner that I'm reaching out to their business for fear they might offer a special rate. But I worry that best practice is I should let them know first.

Just curious - for those 5500's we file, we always request a written signature on an annual basis to file 5500's on behalf of Plan Sponsors (we only do this for the super small plans). Generally, they email a pdf with the signature. Has anyone transitioned to getting this authorization by email only? ie. have the plan sponsor respond yes by email without a wet signature?

Ultimately we are eating our own fees on this and having them send it over to an IRA.

ahhh to be so idealistic.....

okay, so...apparently, about 5 years ago, a participant was automatically cashed out, and a check for $40 written to him. that check has never been cashed and the plan is moving recordkeepers. we are assuming at the time, that distribution fees were already applied to his account, but we would like to just forfeit this remaining uncashed balance as in applying a new round of fees. Curious of any thoughts on this?

Another one of my favorite topics - control groups etc..... Small Investment Company (2 owners) owns a store in one state, but no other business in that state, nor any other location of the store or a similar type of business. They do however have unrelated holdings in other states. Is this an attorney question?

ok, so, ummmm, first time such a request has come in for an MP plan...participant is curious about an annuity....any recommendation on what company to contact?

Thanks, some random responses: The amounts are for example purposes only. Payroll has no idea so has turned to us 'experts' who are hardly such experts..... With these amounts, it doesn't mater for 401(k), but it could matter for PS, specifically the 25% deductability. Here's some add'l info: On the W-2, item 14 Other: It is identified as partial owner of the S-Corp. Person in question is spouse of the owner.

ahhhh..the ever complex compensation determination. Plan Comp is W-2 Comp. W-2 Pay includes the following: Box 1: Regular Pay of $70,000 (excludes 401(k) Health Insurance Expense of $20,000 Total Box 1 = $90,000 Box 3, 5: Regular Pay of $70,000 401(k) of $30,000 Total Box 3,5 = $100,000 I believe then for Plan purposes, pay is $100,000, but was hoping to confirm that the $20,000 is not added back into that.

Plan will be increasing match but i wasn't sure if there is a 30 day notice requirement for the SMM.

I guess they don't update the website either anymore? Nothing updated for 2024. I'm up for 2025. I assume they still do renewals? https://www.irs.gov/tax-professionals/maintain-your-enrolled-retirement-plan-agent-status

I'm used to contribution deposits reflecting the type of contribution (ie 401k vs employer) This one cpa is depositing the sum of 401k and safe harbor into the plan's brokerage accounts with the sole label of "payroll deduction" (as I learned when questioning the 402g limit excess). I'm curious how serious that is?

Thanks! I typed too fast, yes I meant to include late contributions AND lost earnings, but then was questioning once those are done but not the VFCP if the amount needs to be included on 5500's until VFCP done. Looking to clarify definition of 'fully corrected'.

For reporting delinquent contributions, do they get included in successive years only until the late contributions have been deposited (recovery date), or do they keep getting reported until a VFCP is submitted?

it's been determined that a plan sponsor for a large plan did everything right with their payroll uploads, but the payroll company caused a delay in depositing the 401k contributions. plan sponsor has since deposited lost earnings and then reported this on multiple 5500's, only now being advised to file a VFCP. No 5330 ever filed though. The delinquent contribution amounts are not de minimis, even by potential revised vfcp standards, though lost earnings are under $5k. Based on this error, and I know it's often a judgement call, would it be fair to amend the 5500's to remove the delinquent contributions and not go through the effort and cost of a vfcp?