CuseFan

Backdoor Roth via traditional IRA - OK, provided it was thru non-deductible IRA contributions and all conversion rules followed. Agree with David that it could be time for a DBP, especially if this is a solo/no employees situation.

You request repayment. If not repaid, you inform that excess was not eligible for R/O and you issue corrected 1099R if needed. If not repaid, sponsor (or a third party, if responsible) makes plan whole for the amount that should have been forfeited rather than paid.

From IRS website. I think you have an excess 402(g) salary deferral because that cannot exceed compensation/earned income. The $18,000 deferral is taxable income in 2018 and only the $327 is taxable income for 2019. Yes, you also exceeded 415, but I believe this correction comes first. Timely withdrawal of excess contributions by April 15 Excess deferrals withdrawn by April 15 of the year following the year of deferral are taxable in the calendar year deferred. Earnings are taxable in the year they're distributed. There is no 10% early distribution tax, no 20% withholding and no spousal consent requirement on amounts timely distributed.

Truth is stranger than fiction, for sure, and I bet there have been a lot of "interesting" stories arising out of that situation.

The ARA requested auto ext to at least 2/1 for DBP because of the extended contrib deadline and reporting issues associated with those made between 10/15-1/1. If and when this might happen is anyone's guess at this point.

Yes, still HCE, there is no legal requirement to provide an inheritance and once an adult there is nothing for the parent to dis from owning, i.e., no support obligation. Allowing this situation to make the son an NHCE would simply create all sorts of potential abuse, which is questionable here in my mind - if relationship is that strained, why is son still working for parent?

You should be asking an accountant (or your accountant) rather than a forum of retirement plan practitioners, IMHO.

Don't think so. File final EZ and make sure that plan document is up to date for current law (not just latest cumulative list).

Thanks for correcting me B. So that piece of advice was worth the price paid - nothing!

Interesting how TPAs will shy away from the word "legal" so as not to imply that they have attorneys on staff but have no qualms saying they do actuarial work even though they employ no enrolled actuaries. What is the difference between outsourcing the legal document, which is what you do by licensing pre-approved plan products, and outsourcing the actuarial valuation and Schedule SB (or the signature thereof)?

I responded to your second posted questions first. Bravo! We see very few people in your age bracket thinking about and planning for their retirement. Your biggest questions/issues have already been addressed - you opened a Roth IRA and you have (or plan to) contribute a substantial amount, possibly the maximum, and you are investing, not simply saving. As an 18-year-old you may not have a relationship (or even know) an accountant or investment adviser - if you do, or have access to one through a trusted family member or friend, I would have them review your plans/intentions to either affirm you are on the right track or give you some advice. Even paying $150 or $200 give or take for an hour or two of someone's professional time and guidance could prove valuable to your education. And keep reading and doing your research - maybe some day soon you'll be giving the answers in this forum in addition to asking questions, because the questions never stop (even after 36 years).

Contributions never taxed on distribution as they were never deducted. Unless it's a qualified distribution, which before 59.5 and 5 years established, then earnings are taxed and I think subject to penalty taxes (not sure on that). I also think you must withdraw prorated contributions and income, so I do not think you could take out $20k contrib w/o taxation while leaving the $5k earnings in the IRA. Front loading contributions early in the year does maximize the time and the dollars for earnings potential, but then you are investing a lump sum amount once a year at the same time, which may or may not be the best time to invest, rather than dollar cost averaging throughout the year. You could be in cash/money market in the IRA and then dollar cost average from inside the IRA as well. If you have an accountant or financial advisor that you trust, they should be able to provide definitive guidance on this. This is my opinion and free advice, which may or may not be worth more than you paid. :-)

Technically, probably need to refund the other $62 (plus interest) unless there was an otherwise distributable event, which I assume there was not or the $2970 wouldn't likely have been returned either. In reality, this is probably immaterial enough for the client to ignore, but it should be the client's call, not the service provider.

You don't give numbers - real or relative - but I assume can't be too large since TH. Be careful of coverage, which could require adding back in non-key/NHCEs, and partial termination vesting in addition to general TH issues.

as in what? it can be deposited by 1/1/2021, we've known that for a while. timing of deposit for 2019 tax deduction has not changed. sched SB timing has not been extended. i have not seen mention of potential further guidance or extensions, but i'm not as close to that as some others on this forum.

Also, not that it was a question asked - on what basis did the plan sponsor (and TPA) think it was OK to forfeit the vested balance after a 5-year break? You cannot force out benefits over $5,000 before normal retirement date so unless the participant was missing as of NRD when benefits were due to be paid, and the plan sponsor did a search, this never should have happened. I get that restoration with earnings makes the participant whole, which mitigates the damage I suppose - I assume this was not a participant directed account. It sounds like the plan sponsor knows this was not appropriate and is looking for the participant to essentially indemnify them. As MoJo said, can't be required and even if done voluntarily is likely not worth the paper upon which written.

Unless the DB formula was a safe harbor then yes, you have NDT (what is TRA offset?). The two non-Key employees that are in both plans would need to get 5% TH in DC assuming that plan provides the TH. You also have a combined plan tax deduction limit if they are professional services.

seconded

As Belgarath states, do not even suggest the back-dating of documents - illegal and unethical. How a RK or TPA cannot maintain a copy of the most recent signed plan document and subsequent amendments boggles my mind. How do you know you are administering the plan in accordance with the ACTUAL plan rather than your assumptions based on an unsigned draft? And that you are actually administering an updated qualified plan if you don't know for certain that it has indeed been adopted? Back in paper days, I can see not maintaining past versions once updated (and leaving that sole responsibility to the sponsor), but in the digital age there is NO reason that both the plan sponsor and TPA (and RK if separate) each has a signed copy (even electronically signed) stored electronically. And thinking "of course it was signed back in XXXXXX" is faulty reasoning because many a(n emailed) document gets buried in the mailbox, deleted, forgotten, back-burnered - take your pick - and is then never signed within the required time frame.

Plans can be as restrictive as they want in terms of limiting distributions up to the later of NRA or separation from service, but few are that restrictive.

Diversifying should be a situation you explore based on your individual circumstances at the time and preferably with the help of a qualified trusted advisor, and NOT based on what "everybody else" or "most people" do because most people often make the wrong decision and for the wrong reason, even if they get lucky with the outcome. This is not a decision to be made in a vacuum - you have to consider all your retirement assets and income sources, the company's health (which may not be so apparent), and a whole host of other retirement decision tree criteria.

As someone who worked in an actuarial practice that was part of an accounting firm (although I am neither), I am of the very strong opinion that those are quite different even though they may seem similar. This is why - look at the signature on the audit report, it says "PricewaterhouseCoopers" (or maybe now it's just "pwc") not the individual audit partner's name, whereas the Schedule SB is the individual's signature. When that individual changes, even if the firm does not change, I believe it should be reported, and I have seen it done routinely. Conversely, if you kept the work all along and went to a different firm or became self-employed, I do not think that is reported and again disagree with Effen, but less convincingly.

Right. They may not be benefiting with respect to the gateway requirement but they are not statutorily excluded and so count in your coverage and nondiscrimination testing denominators. If your combo pass coverage w/o benefiting these two then you need not give them gateway, but then must pass NDT with them as zeroes. Deferrals and match for them only matter in determining average benefit percentages, if needed.

As you note, you have zero average compensation for 415 purposes and where is the evidence of actual service? If it was an owner (not by attribution) who did not have net compensation because expenses exceeded revenue (but owner generated revenue) then I could see counting service. But if I'm an IRS agent looking at this, I'm thinking either the spouse was volunteering (and so not an employee) or maybe getting paid under the table, which opens all sorts of other scrutiny.

https://www.barrons.com/articles/altaba-stock-finra-yahoo-nasdaq-alibaba-delisting-51570551636 Yes, apparently delisted and in escrow pending liquidation, but certainly not valueless. Looks to be trading OTC but that fails to create public pricing/published FMV, but brokers could have pricing info. Agree with Bird's assessment.