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It sounds like they want to max out their contribution every year so just have them put their $11,000 in the plan before the end of plan year.

I will have to disagree somewhat with the bank comments. I do work for a bank trust department and have had experience working for other TPAs. The banks located in the southeastern United States that I have done business with have had superior service and professional knowledge that exceeds many TPAs that I have dealt with. However, I have seen banks that outsource everything and those guys are the ones you need to stay away from. They clearly meet the description that actuarysmith has laid out. Every type of provider (TPA, bank, CPA firm) has there bad apples. Just be sure you perform due diligence for whomever you might choose.

The safe harbor match is an automatic pass for top heavy starting this year. That is assuming that they will not contribute any other types of contributions.

AH! I see what you mean now that I have re-read the post. I agree with Blinky. Maybe Christine is misinterpreting the document. Christine, you probably should be giving matching contributions to ALL participants regardless of the hours they are working. At the end of plan year you will have to determine who did not work 1000 hours and take care of these ineligible matching conributions in the manner the document says to handle excess annual additions.

I think a lot of providers run into the same problem you are having. It is a fault in the design of this plan. If your client wants to calculate match on a payroll basis I would suggest taking away the 1000 hour requirement for the match.

Melissa, you did not state whether or not you are a CPA. You could possibly be reprimanded (maybe lose license) if you perform the audit work knowing that it is wrong. Even if you are a CPA performing recordkeeping functions I would make sure your observations regarding the legalities went into the audit workpapers.

I agree. I see nothing that would make this an ASG.

Does using a plan loan to keep a foreclosure from happening on your principal residence qualify a participant to amortize longer than five years?

Since your plan does not state how often the match is calculated, you should operate the plan on a consistent basis from year to year based on your interpretation of the plan. If you have not been doing true-ups in the past, I would recommend not starting now unless you amend the document to have the match calculated on an annual basis.

I agree with John. It makes no sense to put it in that section of the schedule H. I believe it should be reported either in e or g of the Expense section depending on the circumstances of the loan.

That is okay as long as your discretionary match does not exceed 4%.

The answer to your question is yes. I am assuming this is a discretionary matching contribution. You are okay as long as your discretionary match does not exceed 4% of compensation.

I was wondering if anyone out there would mind sharing the spreadsheet they use for a plan's account summary/income statement. I don't care for the one I am currently using and I am hoping to save a little time this way. Thanks!

The key thing to remember here is that this is a corporation. This is just one of the business expenses that are charged against earnings. Many corporations contribute to plans that have losses for a given year. Sometimes shareholders do loan money to the corporation to meet certain obligations. I think this is what is happening here in your case.

I just read my post and I think I left out one point. The deduction for the partnership would NOT be included on the partnership return but on the K1 for the individual partner. S corps have characteristics like C corporations but are taxed similar to partnerships. But I do not know sure how that deduction is handled for S corps.

I do not know of a requirement that says you cannot deduct a contribution that would put you in the red. The contribution is treated as a business expense similar to other business expenses. The client will be able to carry the loss back and/or forward to prior years in order to reduce tax liability. However, I am under the assumption that this contribution is for the sole partner/shareholder. Tax treatment for S corps are very similar to partnerships. If a contribution is made to a partner in a partnership, the deduction would be included on the individual's K-1 of Form 1065 and then included on his 1040 as a deduction from his gross income. This may be the case for your S corp problem. Unfortunately, I am a CPA that does not practice in taxation of businesses but hopefully this will get you started.

Can anyone tell me how can find out for sure if someone has the CEBS designation? I am doing a background check on someone.

mbozek is correct. Your part B deals strictly with the deduction the company can make for contributions to the Plan as pointed out. The reference is Code Section 404(a)(6).

I am thinking about going back to school for my Ph.D. I was wondering if anyone knew of any schools that actually offer a Ph.D. program in the employee benefits field. Any information would be appreciated.

Most companies pay either their CPA firm or TPA(third party administrator) to do this. I actually do not know of any clients I have ever had that have done it themselves. If your company has over 100 participants, you will generally have to have an audit of your retirement plan. There are some minor exceptions to this but I cannot tell you for sure without knowing how many participants you have and if last year a schedule H or schedule I was filed with your 5500.

Okay, thanks for the help.

I have recently started to use fool around with the testing components of Relius. Can you make Relius exclude participants that have not met the 1 year/ age 21 eligibility?

You can invest your Roth IRA contributions among different mutual funds, brokerage houses, etc. However, you are still limited to the maximum contribution of $3,000 for 2002. That is a total amount which means you cannot add $3,000 per account.

That is correct. You will have to file an amended return. Since you will probably have to pay additional taxes on this amount, the IRS will probably require you to pay interest on top of the amount you owe. The rate is the federal short term rate plus 3%. The rate is adjusted quarterly and is compounded daily.

For purposes of the 5500 you can prepare your financial information on a cash basis. It should be consistent from year to year. Maybe this is the case in your situation.