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M Norton

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  1. Due to some issues with the plan sponsor, we are just now working on the 2023 contributions and allocations. We discovered that the 2022 Employer Safe Harbor contribution was never deposited to the plan. What options are available to fix this? Thanks.
  2. Thanks, Paul I. Most of our clients have used the IRS forms, not custom adoption agreements. I would expect the IRS to update its forms if a SIMPLE sponsor is required to offer Roth options, but the SECURE 2.0 Act did not indicate whether it was optional.
  3. Secure Act 2.0 contains provisions for Roth contributions to SIMPLE IRAs beginning 2023. Has anyone seen any documents that offer that option? I have looked at the IRS website at forms 5304-SIMPLE (Rev. March 2012) and 5305-SIMPLE (Rev March 2002). Neither has been updated to provide for Roth. Is that really an option if the federal forms don't offer it? I am working on preparing notices to clients that sponsor SIMPLE plans and want to make sure I cover the options available. Thanks.
  4. Employer sponsors a 5304 SIMPLE, wants to change it to a 5305-SIMPLE. There are six employees who are participating in the SIMPLE plan and all want to move to the new investment platform as a group. (By moving as a group they will get a discount on fees, etc.) Does the employer have to wait until January 1, 2024 to make the change? And would he just restate on the 5305-SIMPLE?
  5. Medical practice sponsors 401(k). Doctor/owner (over age 60) deferred $20,500 for 2022, due to miscalculation by office mgr/wife). Can we get him to max by reclassifying part of deferrals to catch-up and allocating match and extra PS to get him to max $67,500? (means we will have to do more for NHCEs, but he is okay with that.) Thanks.
  6. Medical practice with SH 401(k) lists two groups of HCEs - one for the doctor and another for non-physician HCEs (doctor's wife). A third group is for all other continuing employees and a fourth group for terminated employees. Doctor's adult daughter now working for the practice and became eligible for the plan in 2022. Is it possible amend the plan retroactively to put the daughter in a separate group from the doctor's wife? Giving the daughter the same percentage allocation as the wife is killing my non-discrim test. Thanks for any help!
  7. Plan sponsor missed deposits of some 2022 deferrals; they were deposited in early 2023. We have calculated lost earnings and prepared Form 5330 to report and pay the excise tax on the lost earnings. We do the plan administration annually. According to the IRS forum from 3/24/2011 (posted online) they indicate lost earnings have to be calculated for the year in which the deferrals were late, and also for the year in which the lost earnings were deposited. In fact, it uses a pyramid approach, such that you must deposit the lost earnings for the late deferrals plus the lost earnings for the prior plan year. It sounds like you have to file two Forms 5330 for one delinquent deposit if the lost earnings were not deposited in the same year as the late deferrals. How many Forms 5330 can be filed for the same plan in one year? We have a client that is chronically late in making deposits. So for 2022 we will report lost earnings on those late deposits of 2022 deferrals in 2023, then we will calculate lost earnings through the date of deposit in 2023, plus lost earnings on the 2022 lost earnings, plus lost earnings on late 2023 deposits. Do we file a 5330 for the lost 2023 earnings on the 2022 deferrals deposited in 2023, and then another 5330 for lost 2023 earnings on late deposits of 2023 deferrals? Trying to figure how how this is supposed to work. Any help appreciated.
  8. FtWilliam plan document - adoption agreement allows inservice distributions for participants age 59-1/2 and fully vested. Employee with 20+ years service wants to go part-time and take inservice. Plan assets are held in pooled account. Looking for example of procedure that spells out limitations and ordering rules. Any advice appreciated! Thanks!
  9. The plan does include post-severance in the definition of compensation - but that would apply only if the plan was still in operation when the compensation was paid, right? The employees will not be terminated until 12/31/2022. The practice wants to terminate the plan before the end of the year, maybe 12/15/2022. Any compensation paid after that, to physician or employees, including severance, would be paid after plan termination. That compensation is what the plan sponsor wants to exclude. Is that possible?
  10. SH 401(k) - 3% NEC SH, for medical practice. Plan is terminating due to sudden health issues for doctor. He wants to term the plan before the end of 2022. Next-to-last payroll is 12/14/2022, last payroll would be 12/28/2022 which will include severance. Practice does not want to pay 3% NEC on severance, so wants to term before that last payroll, probably 12/16/2022. MD has comp in excess of $305K already. Will term date affect his plan comp?
  11. Client has pension in TIAA, rolling $50,000 to Roth IRA and paying tax on that. He is also required to take an RMD, which is about $15,000. Can the $50,000 coming out of TIAA and going into the Roth cover his RMD requirement? It seems like that would be a 'no' but I am not an expert on this. Thanks.
  12. We are part of a CPA firm. Our department provides TPA services for tax and business clients of the firm as well as for plan sponsors who do not use our firm for non-retirement-plan services. We use an engagement letter specifically for the TPA services. It has been several years since our engagement letter has been modified. If you use an engagement letter for TPA services, would you be willing to share a sample? Thank you!
  13. Small SH 401(k) plan (one MD, six NHCEs) had balance due for 2020 Safe Harbor match. As of mid-2022, the 2020 SH match not deposited to plan (pooled account). What options does the plan sponsor have to correct this? Thanks.
  14. Mr. Bagwell - thanks for the suggestion about plan doc language re participation on re-employment. The plan document does say that if she did not qualify for participation as of Term date and is subsequently reemployed, she is eligible to participate on the later of re-employment or date eligibility is met. So I think she is in. CuseFan - she probably was considered terminated, but no benefits provided - employees can opt to join group health ins plan but not employer-paid. Almost immediately after leaving she offered to work as "fill-in" so not really terminated, just switch to "as needed". I think she will get the TH contribution. Thanks for responses!
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