RatherBeGolfing

You are assuming that there is enough comp to max out using just profit sharing, that is often not the case. For many of these small companies, you don't have enough comp to get to $56K as a profit sharing contribution, but you can get to $38K and max out at $56K with the $18K deferral.

Oh I agree with you, I just didn't see the rush in getting an EZ filed now.

Or just wait until the 2018 EZ is released?

They did, ASPPA replaced it with an "ask the experts" panel.

And miss out on discussions like "The Rocky Mountain MEP" from last year? Trademark pending btw...

Thanks ETA!

Thanks CuseFan. Neither document will automatically cover the employees of the other company of the controlled group. I don't know why I was second guessing myself this morning, so thank you for clarifying it for me.

Here is my issue for 2019: You have 130 participant in the plan as of 12/31/2018. As of 1/1/2019, 60 of them are no longer eligible for 001, but are eligible for 002. How many account balances do you have on 1/1/2019 for 001? Lets assume that all 130 have an account balance. Do the 60 participants who are now no longer eligible for 001 still have their account balance in 001 as of 01/01/2019? If so, they are still a participants in 001, and participant AND active participant in 002. Audit would still be required for 2019. If you have participants without a balance, you could end up with less than 100 in 001 as of 1/1/2019.

I have had this argument with the IRS as well, but I have always prevailed after insisting that the BOY has to be established on its own merits, and that unless they can show me a rule or reg saying otherwise, I would like to get it reviewed by someone higher up than the person I am dealing with.

A client is the majority owner of Company A and a minority owner of Company B. He will acquire majority ownership of Company B in January of 2019. The ownership will be enough to establish an A+B controlled group. Company A maintains a small plan with a safe harbor match and A21+1YOS for eligibility, Company B maintains a large (audited) plan with a non safe harbor match and A21+3MOS for eligibility. We are working on a new plan design to fit the needs of both A and B, but we don't have a clear solution yet. Neither company has adopted the plan of the other company. B's plan would probably pass coverage no problem with A's employees not benefiting, but A would fail miserably. We can rely on the transition rule until we have a solution and then make the solution effective 1/1/2020 right?

As @Bird pointed out earlier, the "solo k" IS a regular 401(k) plan. Unfortunately, those who market 401(k) plans as "solo" or "uni" or whatever (k), often use a plan document that has been severely limited because the promoter of the "solo" is not able or unwilling to deal with plans when there are people other than owners, spouses, or partners involved. Whether your particular 401(k) plan document must be amended depends on whether the document provider designed it in such a way that an amendment is needed. If the question is "can you have a one-participant plan and a cash balance plan"? then the answer is yes. But do you really need a CB plan? Unless you have a partner only plan you only have to deal with Owner and maybe spouse, a regular DB plan should be all you need and is probably easier...

I havent used relius in the last 5-6 years, but if it is a VS document I can almost guarantee that there is a place where the short plan year is supposed to be indicated while drafting the document. If there really is no reference to a short plan year, I wonder if that part was simply missed while drafting the document. You cant have a calendar year plan effective 10/1/18 without a short plan year. Maybe someone who uses relius FIS now can weigh in on the document? Also, best bet is to log an incident (or whatever the process is now) and ask relius FIS

Is it actually an individually designed plan or is it a volume submitter in IDP format? Is there any reference to a short plan year?

The document has to define the plan and limitation year as a 12 month period. A short plan year would be an exception so the document would have additional language to indicate a specific short plan year. If the plan is effective 10/1/2018, I would expect the document to also state a short plan year of 10/1/2018-12/31/2018.

That is one of the many issues yes.

I agree with John, MoJo, and others above. I would not encourage a client to file an incomplete annual return. You are simply better off filing a complete annual return late and paying the user fee for doing so. As a practitioner, you have to consider the liability you are exposing the client (and yourself) to by recommending that they file an incomplete return because you expect to get another 45 days to fix it, rather than paying a small user fee to do it properly.

The $600 over payment has to make it back to the plan. If the participant won't pay it back, the trustees/plan sponsor is on the hook. Since its an MSSB mistake they should pay it, but since the client has moved on that might be difficult. They need to suck it up and make the plan whole and then try to get money back from the participant or MSSB. As a side note, was this a MSSB brokerage account? If it was, then its pretty clear who is at fault since you have to put the payout amount AND what to do with any funds left over. If MSSB paid an amount other than on the form, they will make it right.

? Why do you assume participants are better off in a state plan? Why is it greedy to utilize retirement plans to maximize your savings?

Why do you assume that the participants are better off in a state plan? Why is it greedy to utilize retirement plans to maximize your savings?

We do the same, but that does not stop people from complaining ? I know some practitioners who have "removed" their document fee by making smaller increases to the annual admin fee to avoid the "why do I have to pay for this AGAIN?" conversation. Im not quite sold on it, but hey whatever works...

Obviously the answer will largely depend on the state plan design, but very few of my clients would dump their current plan for a state plan. Those who would drop their plan are probably those employers who only have their plan because the other companies they compete with also offer a plan. Most (99%) of my plans are designed to maximize the benefits to the owners, and that wouldn't be available in any state plan.

With a $5 balance why not just cash him out and be done?

A roll over to an IRA would not be a taxable transaction and not subject to a 10% excise tax.

It is very possible that what they are telling you is true, but they should still be able to explain it to you. The SPD will not necessarily spell out rules for partial withdrawals if the plan does not allow it, it is more common that it will spell out what you CAN do rather than what you cannot do. So in their example, the SPD might not refer to partial withdrawals simply because the plan does not allow them. I understand what they are saying but it sounds like they need to explain it better to you rather than telling you "tough luck". Is there a reason you have chosen to keep the assets in the 401(k) plan rather than roll them to an IRA? You would have full control in the IRA.

Andy Remo with ARA had a brief rundown of the lame duck tax bill in NAPA net today. Per his article it would require bi partisan support in the Senate so I assume that means they cant use budget reconciliation to pass it without help from the Dems