TPApril

So ultimately, Edward Jones back office is refusing to allow the RMD payment to be issued by 12/31. I would note this is not the first RMD for this now deceased participant.

Owner of 1-person plan just died, shortly prior to end of year and prior to taking his RMD. Trustee is unable to be legally appointed prior to eoy. I'm pretty sure since the plan requires RMD's, that an authorization signature is not required. The recordkeeper is insisting it is. Additionally, since the RMD is formally taken out after date of death, I'm thinking the 1099-R is still treated as RMD, but perhaps should be marked as Death, even though this is not a Death distribution?

just wondering - do Plan Sponsor's generally sign the Safe Harbor Notice, or do they just get sent out as applicable?

Never encountered this - one person plan and the owner died. Spouse survives him, though she was never in the plan. Does she sign the plan termination paperwork?

I understand that for Davis Bacon prevailing wage contributions, they must be deposited quarterly, as opposed to the 401(k) contribution deadlines. I don't think it's included but has anyone ever reported that on the delinquent contribution line of the 5500? I have to figure out what kind of penalties there are for this.

They do not want to include them in the year end testing.

Business owner is shutting down his practice, moving states, and opening a brand new practice. Although it's the same line of work, for practical purposes he is planning to create a new S-Corp in the new state and shut down the old one. There are and will not be no other employees. Any reason he cannot just keep the same 401(k) plan and rename it under the new Corp?

Professional Services Group with shared ownership of company by the professionals. Each professional has their own Inc/LLC and their own plan. All plans mirror each other and are cross-tested together. Some of the professional are exiting the Company at say 9/30, though their individual companies will continue. The PS contribution requires last day worked and they will be making PS contributions as separated companies. It is assumed then that their PS contributions will not be included at year end testing. Somehow I know I'm not thinking of everything clearly. Two questions: I believe they are treated in the testing as terminated at 9/30, so 401(k) contributions made prior to 9/30 are included in testing. One of the Partners leaving is over 65, so is eligible for a PS contribution as a Retiree, but the contribution will be made long after 9/30. Not sure if this is included in the testing?

Bird - the third line of my original post was intended to answer that question: "As part of a controlled group, she would normally file a 5500. "

Actually the objective is to allow a NHCE in from the get go.

New plan. Effective date 1/1 for PS of current year (10/1 for 401(k) and safe harbor) Owner wants to allow all employees employed as of 7/1 to be immediately eligible as of 1/1. Does that make sense then that anyone hired between 1/1 and 7/1 would be immediately eligible, albeit on their own date of hire instead of 1/1?

I thought the 3% s/h notice was required the first year, but then not in subsequent years.

Interesting. At a prior employer, for one reason or another about 25% of plans were reported on a cash basis. There was not enough institutional knowledge to know why. One year we converted the cash basis 5500's to accrued so that we could be consistent across all plans within the practice.

Is it a big deal to switch between cash and accrued basis? New 1-person plan deposited $500 as a starter contribution after the end of the plan year. As part of a controlled group, she would normally file a 5500. We'd like to wait until the current plan year contribution is filed before starting to file, and then file as accrued, so the 2nd plan year contribution would show the contribution for both the first and second plan years.

I understand a new safe harbor 401(k) plan can be signed prior to 10/1 and effective 10/1. However, does the notice for the new plan need to have been delivered to eligible employees by 9/1 (ie 30 days previously)?

Yes and yes.

If the change to the welfare plan is only service providers, but actual contributions, benefits, eligibilties etc all remain the same, is an SMM actually required? Or is it sufficient to provide this information on the annual Open Enrollment paperwork?

Without judging the setup of this company's legacy multiple retirement plans, they have the following: One plan for all employees Each partner has their own plan (not related to this question, the plans are tested as one controlled group, all plans mirror each other and all participants have the option for self direction) Situation: A new Partner has set up a new plan, and ultimately contributed $400 for the past plan year (prior to plan year end), simply to get the trust set up. Inasmuch as a one-person plan with less than $250k does not need to file an EZ, my understanding is that because of the controlled group situation, a 5500-EZ is indeed required in this case. Curious of any thoughts or differing opinions?

For plans that file 5500-EZ, but have 2 participants, typically owner and spouse, and the plan has one 'pooled' trust, I'm thinking the following are not needed: List of Investments 8955-SSA (for retired spouse) - This was previously an attachment to regular 5500 and is filed with the IRS, so doesn't seem like it would be filed

okay Belgarath - you're correct, not all the details are there. Owner of 1-person plan took an allowed in service distribution. Adviser has informed me that, including the 20% withholding, he has rolled it back into the plan. david r - I never assume I know everything about a topic. In spite of my familiarity with 1099-R's, this situation has never come up with me (and I'm not excited about it either). They have asked me about their expected 1099-R. My asking about a second 1099-R didn't make sense since I've never seen one for a Rollover into a plan.

Lump sum distribution is taken, then rolled over. Just curious about the 1099-R for the distribution. I'm thinking that it is marked as nontaxable (ie nontaxable amount = zero). Or alternatively is there a second 1099-R issued where it is rolled over (doesn't make sense to me but just trying to cover all bases)?

Agreed 100%. I did have one client once who refused to allow me to file one. They were a CPA firm and wanted to always rely on their own tax extension.

2 questions, unrelated to each other, but related to use of Automatic Extension: I understand the plan year has to match employer's tax year. How about just the plan year end? ie a short plan year was declared from 7/1-12/31 and the ER's tax year is 12/31. Plan sponsor insists they never use Form 5558 but always rely on their own Automatic Extension of their business tax returns. Do other TPA's have plans that rely on this? We have always taken the approach to file 5558 no matter what, if it needs to be extended.

Yes - this was simply they did not want to sell stocks and mutual funds. Fortunately it's not one of those funny one-person owner plans that have all kinds of messed up investments that you find out after you have signed them on. But that's another story... Ultimately they recognized certain tax challenges and decided to go the traditional, and recommended route of selling the investments.

Just never been asked this. Couldn't seem to find anything related in the BPD. Can a Profit Sharing contribution be deposited 'in kind', ie transferred from a business account to a 401k plan trust? To make it worse, they really want to transfer it from a personal account.