ETA Consulting LLC

SIMPLE IRA accounts are not included in Top Heavy determinations. Good Luck!

No, you must apply the exclusions before you apply the limit. $255,769.18. Good Luck!

I still see two separate issues. You're suggesting that the employer eligibility failure automatically results in "Excess Contributions (Where the loss of deductions and the 10% penalty applies". We can see where EPCRS prescribes the loss of deduction to Excess Amounts, but the "Employer Eligibility Failure" seems different. It's almost as if you're getting a free ride (e.g. no excess or non-deductible amounts); you're merely ceasing contributions and reporting the failure. If it were the IRS's intention to have it any different, then they should've made it clearer. I don't see any ambiguity. Good Luck!

You're suggesting fixing under the "Excess Contribution", but have you considered the corrections under the "Employer Eligibility Failure"? Good Luck!

What exactly are you trying to do?

Just shooting from the hip, but I think there is VCP correction with a reduced fee for this one. Good Luck!

Correct. The filing requirements have not changed. The only differences is the filing method; which now enables the solo k plans to be reported through electronic means. Good Luck!

This is where it helps to have established procedures in place when administering plans. It is incumbent on the Plan Administrator to have those in place for this and many other circumstances. When a person becomes eligible, what is the procedure they must follow when communicating their deferral elections? Do you require them to complete a standard form? Or, do you accept their elections by email? Better yet, do you permit them to write their elections on a paper towel and submit them to you? There is no law on the form of communication, but the Plan Administrator is responsible for having those procedures in place to ensure the Participants' rights are being enforced. Your question is whether or not the election to have $20 deducted from her pay was a bona fide election that could be acted on by the Plan Administrator. It appears as if the Plan Administrator first decided that it, in fact, was a valid election, but later changed their position. Nonetheless, the proper procedure for enrolling must be communicated. At this point, what you feel must be done would depend on whether or not you see a failure in the way the plan was administered with respect to allowing participants to elect to defer. Good Luck!

No. Once they've cashed on the portion of the account they were entitled to, then they would have no more ownership in the account. Good Luck!

True. Since the 5 year rule applies, it would be redundant to roll into an inherited IRA, because they would end up having to take it right back out to meet the five year requirement. Good Luck!

It is what it is. There are books that could be written on everything that could've been done (by the TPA) to ensure this type of situation gets avoided. Ideally, you know a plan's TH status on the 1st day of that year; ample time to explain to the owner (and any other key) to not contribute a single dime to the plan. Hell, even amend the plan to disallow their continued participation if you have to. But, when it gets to this point, there isn't much of a story on what to do, but how to change your service delivery to ensure it doesn't happen to another client in the future. Good Luck!

The 1 & 5 year rules apply. They may take a total distribution at any time during the next five years. If they, instead, want a lifetime payout; then they must begin receiving in the year following the year of death. The life expectancy would be that of the oldest beneficiary (minus 1 in subsequent years) Good Luck!

I think there is a difference between "employees who could" work a prevailing wage job and "employees who are working" a prevailing wage job. Good Luck!

What, exactly, are you trying to solve?

I don't disagree with you. I'm merely pointing out that safe harbor 401(k) has two distinct conditions that must be met: 1) Safe Harbor Contribution must be made; and 2) it must be deposited within 12 months after the 'safe harbor' year. So, we agree that the the obvious operational failure in not making a contribution that was promised under the terms of the plan. I'm still a little hung up on point (2), because the rules seem to suggest safe harbor is contingent on that as well. In other words, making the contribution 'late' satisfies failure "1", but doesn't seem to address failure "2". At the end of the day, I think we agree that VCP is necessary in light of these this issue. Just being super-technical (which often avoids pragmatism), there seems to be an additional issue behind the 12 month deadline. I would love to say "just make the 'fn' deposit and move on already", but that would create a little discomfort. I think we agree for the most part. Good Luck! PS: Here is a line directly from the DGEM BPD (that I use). The wording seems to imply the 12 month deposit to qualify as Safe Harbor. Hence, failure to make in 12 months mean you're not Safe Harbor: The Safe Harbor Contribution must be made to the Plan no later than 12 months following the close of the Plan Year for which it is being used to qualify the Plan as a Safe Harbor 401(k) Plan.

There is an ability to loan a participant up to $10,000; even though the vested balance is not $20,000. This provision is SELDOM (if ever) used. So, it's possible to have one of these loans go into default. If made, it still has to be adequately secured (since it exceeds 50% of the vested balance); which places the onus on the plan administrator to begin repossessing whatever was used to secure the loan. Good Luck!

I agree that Maven's approach didn't seem to go far enough with respect to missing the 12 month deposit. But I'm trying to get to your conclusion. It would seem as if you'd lose the safe harbor by missing the 12 month deadline as well. Shouldn't there be a method of 1) you must make the deposits because it was promised and 2) you lose your safe harbor status for that year for failure to meet the 12 month deposit deadline. I'm asking. It would be nice if it were as simple as making the deposit (with earnings), but it would appear as if relief under VCP would be necessary in order to forego testing for that year. Again, I'm asking..

There is no "maybe" for match. Only "SHNEC". Good Luck!

Under the correction, you're proposing to retroactively amend the document to be sponsored by the correct employer and have it treated under the same procedure as the non-amender. I've never thought about what you call it, but have made this type of correction on several occasions. Good Luck!

Not sure what you're asking, but you seemed to have identified the problem along with a reasonable approach to correcting it. Good Luck!

I've never had an issue with an IRS agent receiving information through email. Of course, we wouldn't provide sensitive information (e.g. SSNs), but to suggest that EVERYTHING is faxed would suggest that the agent is being a little too ideological. There are a few (in the IRS and DOL) that always seem to have a bad day; and will certainly ruin yours if you let them. As a policy, I have been told on several occasions that they can receive emails, but cannot respond back through email. So, I've always found that sending files through email have been efficient and effective with respect to getting through the audit. Good Luck!

All the plans of a single employer are aggregated for the $50K limit. They are not aggregated with plans of different employers. Good Luck

Would she be able to exclude contract labor is like asking would she be able to exclude someone who is not her employee. So, that answer is; she must exclude. Just be sure that she's not mis-classifying common law employees as independent contractors. The 415 Dollar limit for SEP is the same as the 415 Dollar Limit for 401(k). The 415 percentage limit for SEPs remain as 25% of Compensation, but that's no biggie since it coincides with the deductibility limit. You may roll over distributions from a 401(k) plan into a SEP. There is no 5500 reporting requirement for SEPs. Good Luck!

I agree. What I meant to suggest was that minimum 30 day notice doesn't apply. So, you can issue the notice with the distribution as opposed to waiting for them to respond. I misspoke. Good Luck.

Your best cite would be your plan document. At any rate, this provision is under the eligible rollover rules. What you're doing is providing them a distribution notice (which effectively explains their rollover rights). If the balance is less than $200, then there is no right to rollover; you don't even need to give them a notice. So, you can review the language of your notice, or the plan document, They should be pretty consistent. Good Luck!