wiiabenefits

Yes.

In this particular instance, there are a half dozen employees so the rules of a solo 401(k) wouldn''t apply here, I'm thinking. My client's situation underscores the trouble a client can get into when they don't seek advice before they jump into something.

What about the 7-day deposit rule for employee deferrals with plans less than 100 participants? Wouldn't her "employee" portion be subject to that rule? https://www.dol.gov/opa/media/press/ebsa/EBSA20100056.htm

I mentioned top heavy because I did not want an excessive contribution on her part to trigger the 3% contribution. She is adamant she does not want to make a company contribution. It's not the plan I would have steered her to but she chose to start this plan without benefit of my advice. The estimated 2017 profit of the her sole proprietorship is $250K. Just to clarify the timing aspect of her contribution, pursuant to Reg 1.401(k)-1(a)(6), she needs to make her election by Dec 31, 2017. Does it need to be paid by Dec 31, 2017 or April 15, 2018 (or the extended due date of her 2017 Form 1040)?

A client set up a 401(k) in 2017 for her LLC which is taxed as a sole proprietor. She has 6 full-time employees and has set up the 401(k) so there will be no employer contributions, only employee contributions. Two questions: 1) What date does she have to fund her "employee" portion for 2017? By December 31, 2017? 2) Because there will be no employer contributions to the plan, the plan must be set up as a traditional 401(k). That means she must have it tested to be sure it is not top heavy. Is that testing typically done on a projected basis so she does not overfund her contribution before December 31?