ratherbereading

In a discussion with a CPA who says a partner who receives a K1 cannot exceed the 2019 limit of $56,000--that catch up contributions never come into play because they have no salary from which to defer. Can anyone point me to IRS rules that dispute this?

The CPA just takes direction from the owner re. pay for the owners 3 ghost relatives.

Ironically, it's the CPA who does the payroll for my client. The wife and 2 daughters get W2s for their no-show jobs and the deferrals are made for them and the owner (also a W2 employee) in one contribution at the end of the year. In your situation, forfeiting is probably the way to go.

Nope!

Interesting. How did they defer if there was no compensation? Was it actually deducted from their paycheck? Did the plan accept a contribution that was not deducted from a paycheck? Looking forward to the replies -- similar to a plan I have -- the wife and 2 daughters of the owner, who do NOT work for the company at all, ever, are given a salary and their deferrals are maxed out at the end of the year as well as the employer contributions. But that is a little different from your scenario where they don't have any income.

Not sure this is the right board for that question.

Actually, I am quoting the adoption agreement.

No, she's not. Thank you, Larry.

I have a large plan for which I do the Schedule H on a cash basis and the auditor provides notes that go with the 5500.

Participant term'd December 2019. The company wants to now give her a severance package of $30,000 and wants her to be able to defer from it. My inclination is she cannot defer from it. They want to instead now say it's a bonus, but I still say no based on this wording under Compensation: The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer. Which it would not have been.

Jim Gaffigan is funny, your post, no.

Thank you!

Plan suspended their safe harbor match as of 9/1/2019. PY is 12/31. There was no other match made for the year. Do I need to do both the ADP test, and the ACP test for the safe harbor that was made during 2019 prior to suspension?

We use Relius documents and there was nothing available in Spanish, for the SPD that is.

Some documents specify that true ups must be made. Personally, I wouldn't bother with $.02.

Google is your friend!

We added this service last year for a few of our clients and it's working out well. Especially for those clients who ignore our repeated requests for census and other information-

That would be a question for a bankruptcy attorney. Is it a Chapter 7 or a Chapter 13? So many variables to it. I don't know a lot about the subject, but there are new rules in place that make it harder to file bankruptcy.

Thanks!

I am trying to see if I can correct it but I don't see a way!

Thanks Lou -- and thanks for picking up the typo-- yes, 401k deferral!

Small plan-professional corporation, 2 owners (husband and wife). Everyone is paid via W2, including owners. They just moved from a SDBA with individual accounts to Nationwide. The owners typically deposit their 401k contribution out of one payroll check (max amount). Their plan year is 10/31. They are still trying to decide whether to defer for PYE 10/31/2019. They insist they have until their tax filing deadline. Since they are not a partnership, and don't receive K1s, I believe their 401k contribution needs to be deposited by 10/31/19, or a couple of days after. Yes? No?

From the IRS https://www.irs.gov/retirement-plans/correct-common-hardship-distribution-errors

Okay, them my answer stands! She shouldn't have any problem getting a distribution.

She needs to speak to the plan administrator at her former company, who should have paperwork they can send her to facilitate the distribution. Since you said she was an employee .... I am assuming she no longer is.