MarZDoates

OOOOPS....

I just read a bulletin that said the IRS, in a Q and A session, has taken the position that forfeitures can not be used to reduce the employer's safe harbor non-elective contribution and also cannot be used to reduce the employer's qnec contribution to pass a failed ADP test. Does that sound correct? Am I missing something?

Partnership sponsors a SIMPLE IRA for two partners and two employees. The partnership is being dissolved...one partner and one employee is leaving effective March 1, 2010....What needs to be done with the SIMPLE IRA that was sponsored by the "former" partnership. The remaining partner becomes a sole proprietor and wants to continue the SIMPLE for himself and the remaining employee. Can they terminate one SIMPLE and start a new one with a new plan document naming the sole prop as the sponsor?

Thank you.

I think I know the answer to this, but I'm having trouble finding anything to back up my theory. We have an employer that will terminate their profit sharing effective August 1, 2009. They want to establish a SEP for 2009. I understand that they can not use Form 5305 SEP if they maintain a qualified plan. Is it correct that by "maintain" another plan means to allocate contributions in a calendar year? If so, where can I find that in the regs? So what I need to know....if we terminate the plan in 2009 and allocate no contributions in 2009 (but allocate gains and losses), can we use the Form 5305 SEP to establish a SEP for 2009? We will distribute the profit sharing plan assets in 2009. Thank you.

Hee hee. Thank you all.... for the clarifications! I appreciate it.

How do you report the change in value of a retirement account on the 5500 EZ?

Jpod, there have no contributions to the plan at all. Lori, Thank you. Thanks to all for the input. It is greatly appreciated!

We have determined that the employee was eligible (and has been for several years) even though there have been no contributions. Problem is that they have been filing an EZ the whole time. We'll go ahead and file a regular 5500 for 2007 (and 2008 final plan year as the plan is terminating). Any suggestions as to what to do about the prior years? DFVC? Thanks.

I'm uncertain as well. I'm trying to determine if this person ever met the plan's eligibility requirements. If so, we'll definitely need to file the regular 5500. But I did find in the ERISA outline book that a self-employed individual is considered an employee for qualified plan purposes. Thanks for the input.

Line 14 asks if the business has any employees other than the owner, spouse, partner, partner's spouse. This sole proprietor does employ one individual that is not a spouse or partner or partner's spouse, so the answer to 14a is yes. Where it asks for the total number of employees, including the business owner, do you include him in the count since he is a sole-prop and not an "employee"? Thanks.

Employer discovered they had missed depositing SIMPLE IRA deferrals. Some of the employees are no longer employed, and some may have cashed out their SIMPLE IRA. How would the employer handle depositing the late deferrals (plus earnings, etc.) if the IRAs have been closed. What happens if the employee has moved out of the country and can not be located? Thanks for the input.

Is it possible for an employer (hosptial) to sponsor both a 403b and 401k at the same time? There is one HCE that will be severly limited in the 401(k) for deferrals. (I don't the think they want to add the safe harbor to the 401(k)) Would it be permissable to set up a 403(b) in addition to the 401(k) so that the HCE could put max out his deferral in the 403(b)? Additionally, if we set the 403(b) as a deferral only plan, can we avoid having to do the 5500? Obviouisly I don't know much about 403(b)s. Any input would greatly be appreciated! Thanks!

Thank you!

Is anyone aware of a website, other than Freerisa.com, that will show copies of a plan's prior year 5500 filings? Thank you.

Owner has a SEP plan and he wants to fund 2008 now. Can he make contributions to his own SEP IRA now and then make contributions for other eligible employees later in the year? What if the employee doesn't turn 21 until July 2008. Can he go ahead and make a deposit for her now even though she hasn't met eligibility yet? She has already met the service requirement. Thanks.

This is a takeover situation where the old custodian has charged the plan fees (for previously unpaid set up costs and recordkeeping fees) prior to transferring the assets to the new custodian. Empoyer is wanting to reimburse the plan for these fees. Can this be done?

Union employees participate in a program where they contribute (after tax) to a death benefit fund. Upon the union ee's death, the surviving spouse rec'd a death benefit. Is this reportable on 1099R. There is no "formal" plan and it is not life insurance. Thanks.

I have another question.... We were looking at the instructions for the 8886 and it said to file with the employer's tax return (3/15 in this case). Can you please tell me where the 1/15/08 due date is coming from? Thanks!!!

Yikes! That IS scary. Sounds like he should go back to the people that "sold" it to him! Thanks so much for this very useful information!!!

I'm not sure if this is the correct board, and I know nothing about this topic. Please forgive me if I sound dense: Doctor contributed appx $100,000 to a "welfare plan" (using a life insurance policy as the funding vehicle) for which he took tax deductions. He is now wanting to surrender the policy for it's surrender value (appx $70,000) Question: Is the surrender value taxable to him as income? Thanks.

I was looking at an on-line calculator. It is asking for an anticipated rate of return and a reasonable rate of return. I understand that the substantially equal payment is based on the "reasonable rate" (nte 120% of federal mid term rate). But not sure why there is an anticipated int. rate requested or how that applies in determining the payment. Any ideas? Thanks.

changes are permitted only on the next entry date

Employer distributes enrollment forms to employees prior to the January 1 entry date. A couple of the employees (newly eligible to enter January 1) did not turn in their completed election forms until just now. The question is, can they go ahead and start deferrals on the next pay period or do they need to wait until the next entry date. (July 1). The employer was in the process of changing from one investment company to a new one. Assume that all blackout notices were distributed timely. Is there any citation that I can refer to if they can enter on the next payroll date. Thanks,

Will do. Thank you!