MarZDoates

We have a client who just now noticed that their 2003 SEP contribution (paid 10/04) checks never cleared the bank. They contacted the investment company, and they have no record of receiving the contribution. The contribution was deducted on their 2003 tax returns. I would expect that we should self-correct under the EPCRS (correction of insignificant operational failure) by making the contribution now and adjusting for earnings. If we do that, can we still deduct on 2003 tax return? Thanks in advance for any and all input.

Here is an email I received from a co-worker. I know nothing about these accounts. Hopefully I can get some input here. "We have a potential client who has an Archer MSA plan. Proprietorship with Dr.'s wife as an employee. They funded MSA contributions in 2005 from their personal account. Their current accountant says they cannot deduct the contributions because they were paid out of their personal account rather than the proprietorship account. He also advised them that they need to distribute their 2004 contributions before October 15 to avoid problems. I fail to see why it makes any difference which account you pay the contributions from. They have a qualified high deductible health plan. Contributions are within limits. From what I have read, I think they can deduct on Schedule C (if they meet rules for covering other employees) or on line 31 of Form 1040 if they can't deduct on Schedule C." Are we missing something? Is there a particular citation you could refer me to? Thanks in advance for any assistance!!

Is the maximum allowable charge still 25 cents per page?

It is my understanding that deductibility pertains to the employer's fiscal year. The contribution is for the plan year ending within the fiscal year end April 05. I think we have until the time when the employer files its tax return for fye 4/05. But not sure.

Employer's fiscal year runs from May 1, 2004 through April 30, 2005. They sponsor a 401(k) plan on a calendar year basis. Plan requires a top heavy contribution. By when must the top heavy contribution be made in order to be deductible for the 2004 plan year? Thanks

Thank you.

Is a mutual fund considered a single security for purposes of Schedule I reporting? Thank you.

Dad and Son are owners in a closely held business. They each have their own IRAs. They invest in stock of the closely held business. Is it possible for Son's IRA to buy family business stock from Dad's IRA? I'm not even sure where to start to look for this in the regs???

403(b) participant had already begun receiving RMDs from her TSA. She passed away earlier in 2004 without having taken an RMD. No RMD was paid to her beneficiary for 2004. Is there some sort of exception to the penalty for not taking the RMD in year of death?

Participant of 403(b) annuity had already begun taking minimum distributions. Her date of death was 6/2004. No RMD was taken by decedent in 2004. Should her beneficiaries have taken an RMD in 2004? It is my understanding that the benes can wait to take in calendar year following dod. Insurance company said that there should have been an RMD in 2004 and that penalties will apply since one was not taken. Is this correct? If so, can someone provide citation? Thank you.

Also, is it necessary to provide notice to the Trustee when the plan Trustee and Administrator are the same? Thank you.

Is anyone aware of any formal language that must be contained in the notice to participant/alternate payee that a DRO has been received? I realize the Plan Administrator will need to provide both with the plan's QDRO procedures. But, I'm not sure if the actual notice needs to say anything except that one was received and a copy of the procedures is enclosed.

Okay. It appears that this particular client filed Form 5500 w/ a Schedule H marked "Draft - Do Not File". The accountant's opinion was not completed and there does not appear to be an audit attached. Client received a notice from DOL stating that there was incorrect information contained in the Schedule H. (Probably because no audit was done and was not filed on the proper form.) The DOL asked that correct information be supplied. My question is, can this client file under the DFVC and beg forgiveness. Or would the notice they received from DOL prevent them from correcting the problem at this point and be subject to penalties until the audit is done and the form is corrected? Any other suggestions? Thanks to all for replying. I really appreciate everyone's help.

What is the deadline for making a deductible DB plan contribution? Is it the same as DC.....due by tax filing date, including extensions? I know nothing about DB plans. (I'm not sure I ever want to know much about them either. Yuck) THank you.

I know this subject has probably been beaten to death and I have read some of the other posts. I just want to make sure I am understanding correctly. Client has a 401(K) plan. In 2002 beginning of year participant count (Form 5500 line 6) was 82. Client filed Schedule I. In 2003, beginning of year participant count was 173. Is it correct that they have no choice but to file Schedule H (with audit) since the participant count is greater than 120? Thanks.

Thanks. That's what I thought. Sometimes I second guess myself though.

Does this apply to age weighted plans? I know it applies to cross tested. Thanks.

Our CPA firm does plan administration on DC plans only. We have been asked by a tax client about setting up a DB plan. Can anyone recommend a good DB consulting/actuarial firm in Indiana? The only one I am familiar with is McCready & Keene, which I believe is very good. Any other suggestions? Thanks.

Thank you for all the replies. This help me!!!

Employer sponsors a 401(k) plan. He wants to amend the current plan to to a safe harbor 401(k) plan effective January 1, 2005. By what date would the amendment need to be executed and notice given to participants?

Let me preface this with the fact that I KNOW NOTHING about Defined Benefit plans. I'm a DC kinda gal. I have been asked by a collegue the following question: "Have you heard about any proposed legislation that would / could change the way an employer can calculate the lump sum payout from a defined benefit plan? I have heard some "buzz" about it, but haven't been able to get any real detail." Has anyone heard this also? Is there a source I could refer to? Thanks.

Go Cards!

Peace, the current carrier will permit a lump sum fully taxable distribution. However beneficiary wants to minimize his tax liability.

Thanks to all for the replies. This helps me. I appreciate it!!

Need help. We have a client that was a participant in a 403(b) annuity. She is now deceased. She had already begun receiving minimum distributions. Her two children are named beneficiaries. After reviewing the regs, it appears that you treat the 403(b) the same as an IRA for RMD purposes and that the beneficiaries can roll the proceeds into a 403(b) or IRA in their name f/b/o deceased participant. The beneficiary would continue taking minimum distributions based on their own life expectancies. Is this correct? The insurance company maintaining the 403(b) has indicated that the proceeds may not be rolled over. They have indicated the funds must stay with them, but can be paid out to the beneficiaries based on their life expectance. Is it true that the beneficiaries can not transfer or roll the 403(b) to another vendor? Perhaps I am missing something. Thank you.