CuseFan

I would not suggest for a DBP regardless. Assuming a 415 max benefit formula for max deduction and you then get a 100% or 200% return on assets - there go your deductions, and if your near the plan's end life/termination (or owner dies) now you have excess asset and excise tax problems. Flip side, you experience a 50% or 75% loss - now your MRC jumps and plan may become unaffordable. If sole prop wanted to roll the bitcoin dice, I would do only in a Roth IRA or 401(k) - assuming, of course, compliance with the requirements laid out by Peter.

My understanding is that a plan that merges into another must be up to date and that is something IRS specifically looks at. Line 13 on Form 5307 asks if plan was involved in a merger (among other things) and the instructions then say what additional information must be attached: Line 13. Attach a statement that provides the following for the plans involved: 1. Name of plans, 2. Type of plan, 3. Date of merger, consolidation, spinoff, or a transfer of plan assets or liabilities, and 4. Verification that each plan involved was qualified at the time of the merger, consolidation, spinoff, or a transfer of plan assets or liabilities. If plans are pre-approved w/o modification and/or individually designed such that there are no determination letter submissions, that does not eliminate this requirement.

Dave, I think Bill was referring to recent posts by Ken McDonnell.

Agree. Those should be prohibited.

Bill, first, I hope it's not me and second, do I get 3 guesses? Just reading some intolerable postings by someone whose handle would come very late alphabetically.

Agree with Lou, no issue preparing and sending to participants but doubt you can file with IRS.

Real estate agents are generally independent contractors. Look at from the flip side - I'm an agent working with that agency and all my income is 1099 self-employment income, can I set up my own "solo" plan? I would say yes. It's more a question about parents and that the other 15% owner(s) and if there are any employees (W-2) of the agency, like administrative support.

And remember, Roth is post-tax so in addition to medical insurance, FICA and Medicare taxes, and any other withholdings, federal and state taxes will be withheld, and I would think the Roth deferral comes last. 401(k) is withheld off of "plan compensation" which is often gross pay, although there may be some exclusions. As Q said, refer to the SPD. You should be able to model this to see if there is enough left over, after all other deductions, to satisfy the elected deferral percentage and, if not, adjust accordingly - either lowering the percentage or electing a sustainable flat dollar amount of the plan allows.

And this is a strategy that you should review with your accountant or financial advisor, if you have either, for any unforeseen "gotchas" or missed pieces as Lou noted. If you are using this strategy to help delay taking SS, then that piece won't yet be an issue. Minimizing taxes is good but can you live on $100k per year (and pay for all you need, like healthcare, and all you want, like vacations) and how will that depletion compare to your joint life expectancies? Will you run out of money early or have large RMDs at age 72 that trigger large tax bills? You shouldn't view retirement income in the tax vacuum. If I could take $200k in retirement income less $40k in taxes, knowing it would last my retirement and I could live the life I wanted, or opt to take $100k in annual income, outsmarting the government paying zero taxes as long as possible, but having to scrimp and sacrifice throughout the earliest and healthiest years of my retirement, I choose the former every time. Sounds like your retirement funds are well diversified from a tax perspective. I would recommend, if you don't already have an advisor, find a reputable fee for service provider and pay for qualified advice that will help you map out a long term retirement income strategy that efficiently minimizes taxes (does not mean eliminate) throughout your joint life expectancies. There are very smart people on this forum but I would not seek free advice and confirmation of my complex retirement income situation here or any other on-line forum.

Kind of in Belgarath's court here, the only possible damages incurred would be related to being under withheld on state taxes. I think they would have to have had substantial distributions for that to be the case. The obvious question/issue - and one I would make were I the carrier (not that I excuse them for poor service) - is how/why did the recipients only "discover" this only when getting their 1099? That is total BS. If I'm expecting a $10,000 payout and I know that 20% must be withheld for Federal taxes AND I ELECTED ANOTHER 10% (hello, McFly), then I'm also smart enough (I hope) to know that I should be getting a check for $7,000 and realize that something isn't quite right when they send me $8,000. This lack of personal responsibility drives me nuts - like when a person elects a salary REDUCTION contribution but then doesn't notice (for a whole year even - c'mon McFly!) that their weekly (or whatever) pay did not go down. Anyway, done pontificating, go 'Cuse, in the Sweet 16 baby!

Plan document should specify if loan is treated as general asset of the trust (allocate interest to all, do not reduce participant balance for loan) or as directed investment (reduce balance, allocate principal and interest to just him).

The only other impact of NRA in a DCP is that many times the hours and last day requirements for a PS allocation are waived for retirement. It's more relevant to a DBP discussion, but regardless, it would as CBZ said require a law change. Furthermore, couldn't see it applying to existing participants, which would mean tracking different NRAs for different populations - not a big deal for safe harbor formula plans, but how many DBP with such are still open to new entrants? I don't even want to think about trying to cross-test such a situation. But this doesn't look to be on any legislative radar that I've seen and IRS (and/or Congress) couldn't even get their act together in coordinating actuarial increases (still 70 1/2) with the new RBD age 72.

Yes, you can roll from IRA into 401(k). There is nothing to correct. There are two distributions here - one from plan A rolled to IRA reported by plan A and another from IRA rolled to plan B which will be reported by the IRA.

Agreed - it was time well spent.

Probably not professional services then either and so subject to PBGC, yes?

Maybe. The rules vary by state, but I think most states these days allow protection of IRA money at a similar level as qualified plans. Probably something you can Google easily enough.

You say this happened due to purchases and you just found out about the other plan, so I assume you hopefully have time under the transition rules to be able to get this sorted out. Plan R has a large contingent of "per diem" class of employees - those called in to work on a day to day basis. I would do a deeper dig on that population with respect to hours history. If that much of their population is in this class, it might be that the majority have never worked more than 1000 hours in a year and may be statutorily excluded. If this group predominantly works 1000+ hours per year, then this classification itself may be problematic and was a smokescreen attempt to exclude part-time employees. Even if not the previous intent, it's like salaried employees are in, hourly employees are out, and that is just fine until you fail coverage because hourlies far out number salaried. If you can't find enough statutory exclusions amongst the per diem (we just need 11,780 votes, er, exclusions) then I would run average benefits as the next step and progress from there.

Not possible, unless you mean that each would pass if they were the (only) employer, which is irrelevant. Must be the two companies not doing PS have a large contingent of the control group's NHCEs while the HCEs are concentrated in the smaller companies doing PS, which the control group coverage testing rules are designed to prohibit. Can't help you with the software issue but your description sounds like maybe the statutory exclusions are not being handled properly, whether it's the software or your coding.

Agreed, plans are combined to determine the filing threshold, but if they are required to file then each must file separately.

Yes, by law, the spouse at the time of death must be sole primary beneficiary. Plan can require that they be married for a year before that kicks in, so check the document language, although you look to be past that regardless. This is, of course, subject to any QDRO wife #1 may file.

Not saying that doesn't happen, a lot, and if their accountant is on board, then fine, but how is that justified as a reasonable deductible business expense?

16a - yes 16b - $300,000 17a - yes 17b - no 17c1 - enter adoption date of the plan if provision has always been there 17c2 - enter effective date of the plan This is all the same regardless of whether or not the excess will be transferred to a QRP.

CARES Act non cash bonus? Never heard of this, Googled and all that came up was charitable donation stuff. Further explanation please.

He should also make sure his child is performing service for the business that is commensurate with the pay he is provided.

Personal opinion, others may disagree - but to include in ADP the person must be eligible to make a salary deferral for the year. Yes, technically the person may have entered the plan but since they were not eligible to defer any pay for the year I would exclude from testing. Re 5500, I would treat the same to be consistent, but it probably doesn't matter unless it's the difference between 120 and 121 total participants. Also personal opinion, this is poor design. Immediate eligibility is fine, but knowing payroll is once a month on the first, why not make plan entry date the first of the month coincident with or next following date of hire? Administratively the same but avoids the confusion of your situation. And double check the document that it's not already like that - you mention no eligibility requirements but eligibility and entry are separate, albeit related, concepts.