DDB BN

No, the bonus check will be issued on 12/31

We are working on the document now and should be signed by Friday the latest and the Advisor can set up the accounts within a day of the document being signed. So it is a rush but appears that it can be done.

Thank you!

So they can set up the plan before year end and make deferral contributions from a year end bonus for 2025?

Received a call from an Advisor. He has a prospect with 2 Partners, no employees. It is an LLC taxed as an S Corp and the 2 partners receive W-2 income. The Advisor and CPA want to set up the plan for 2025 and have the partners make the maximum deferrals before year end from a bonus check. The plan can be set up for 2025 but can they make the employee deferral contributions at this late date for the 2025 year? I question it because they take W-2 comp and not Schedule C or K-1.

Thank you.

The employee earned non-union and union compensation from one employer. His W-2 from the one employer includes both non-union and union compensation. He did not receive any compensation from the other employer in 2025.

There are 2 Corps in the controlled group. Employees of both Corporations receive union and non-union income. The W-2 they receive each year includes both and we back out the union comp for calculation of the SHM.

Plan Sponsor has non-union and union compensated employees. Union compensation is excluded from the plan. One of the employees will have W-2 FICA wages of about $70,000 in non-union compensation for 2025 and W-2 FICA wages in union compensation of about $125,000 for 2025. Is the union compensation included to determine if the employee's compensation is over $150,000 for Roth catch up for 2026?

What about LLC Members in an Owner only plan? They have combo CB/401k plans and will not know what their net LLC income will be until much later in the year. Since the CB/401k PS contributions are backed out we have no way of knowing how much can be contributed as Voluntary after-tax to convert to Roth until the CPA calculates the net LLC income and the Actuary calculates the CB contribution.

401k PS plan. The Owner and his wife are going through a divorce which has been ongoing since last year. It is a nasty divorce scenario and may go on for another year or so. The Owner and his wife both have an account in the 401k plan. The wife terminated employment last year and is requesting a partial distribution now to pay her Attorney's fees. We received the request to approve her partial distribution. Since we are aware of the impending divorce since last year, we informed all parties that a QDRO is be prepared for both the Owner and his wife's benefits. The Attorneys on both sides indicated that the QDRO is not necessary as the Owner said it was okay for his soon to be ex-wife to take the distribution. I am not in agreement with this. There is nothing in the QDRO procedure in the plan document that addresses this issue. Can this distribution be processed without a QDRO?

A Participant (Owner) in a 401k PS plan died in July 2022 and his benefit was rolled over to an IRA QTIP Trust for his Spouse in October 2022. He would have been 72 in September 2022 and his RBD would have been 04/01/2023 had he not passed away. Now that his benefit was rolled over to an IRA QTIP Trust, is the RMD for 2023 based on the deceased Participant's DOB or the Spouse's DOB? Is the RMD to be distributed based on the deceased Participant's RMD age or the Spouse's RMD age?

Existing company is a Corp owned 51% by the Grandfather and 49% by the Grandson. They sell cleaning products to the Restaurant Industry. The Grandson would like to start a new Company, as an LLC. The Grandson would be 100% Owner of the new entity. New LLC owns IP and charges a royalty to Corp (Existing Company) Corp produces and sells products covered by the IP Grandson is employed by Corp (Existing Company) as an officer and is possibly a director Would this be considered an ASG or can the Grandson start a 401k PS for his new Entity without regard to the Corp (Existing Company)?

Do you subtract it from the gross K-1 or the net after all that other arithmetic we do? This is also my question. As for the S Corp, it is my understanding that it does not impact the W-2, only K-1 earnings.

How should the net LLC income be calculated after back outs for an LLC that made the PTET election for 2021? Example: $100,000 LLC income, PTET payment = $6,850, net LLC income flows through to K-1 = $93,150. The SS / Medicare tax ($6,580.84) deducted from $93,150 along with the Employer contribution profit sharing (17,313.83) for the member with adjusted net income of $69,255.33? If not, then what is the way to approach this calculation when a PTET election is made?

Merry Christmas!

Thank you.

DB plan terminated and excess asset will be transferred to the 401k PS Plan (QRP). Questions: - Must the excess asset be allocated in the QRP based on 1/7th of the excess each year or can the allocation be an amount based on desired allocation by Plan Sponsor even if less in each year? - Can the allocation be based on new comp 401(a)(4) method with the Owners at 415 max and employees at minimum to pass testing? Or must employees receive allocation at 415 max as well. - If there is excess asset at the end of the 7th year, must all participants receive an allocation up to 415 limit before refund of remaining excess at 20% excise tax? Continue to allocate until all excess funds depleted or QRP terminates? In 7th year, allocate based on new comp max for owners / min for others and refund remaining excess? - Can excess assets in the QRP be used to pay plan expenses.

Thank you to all.

Can a one person sole proprietor with DB plan investment in Bitcoin? What about a one person LLC with a 401k?

Does anyone know where I can find the IRS approval letter for a Datair EGTRRA non-standardized prototype? I have tried contacting Datair and the prior TPA who restated for EGTRRA but am having no luck.

It is a safe harbor 401k. And yes, I am off by a year. Calculated age 70 1/2 based on DOB of 01/20/1948 in error instead of 10/20/1948. Thank you.

The 2018 census indicated that an employee was on leave as of 01/01/2018 (given the nature of the client's business, this is common). The 2019 census indicates that the employee is retired as of 01/01/2018. Participant's DOB is 10/20/1948. Should this participant be required to take an RMD now for 2018 which would have been due by 04/01/19 prior to distribution of her remaining benefit in the plan which will be rolled over to an IRA?

We were presented with a plan to takeover that was effective in 2016 and only employed the 2 owners. The owners set up a Fidelity prototype and opened accounts and each owner made employee deferral contributions. Eligibility is age 21 and 1 year entering the plan on 01/01 or 07/01 following. Employee is hired in 09/2017 and enters the plan on his date of employment and starts making employee deferral contributions. The employee should have entered 01/01/19 but made employee deferrals for 2017 and 2018 and then terminated in Dec 2018. It is a bit late for an 11g amendment so should an application be filed via VCP? Can the employee's deferrals be refunded to him since he was not eligible? Would be able to exclude employee as otherwise ineligible in ADP testing for 2017 and 2018 but there would be a TH issue, this is a deferral only plan. They also never filed a 5500 for the years that the employee was in the plan. Would the best course of action be to submit via VCP for the early entry, determine the TH amount for each year and prepare and submit the 5500 filing for 2017 and 2018 via the DFVCP?

Received this question from a CPA: "An S Corporation filed their tax return by the 3/16/2020 deadline, and now has decided that they want to amend their tax return. The amendment would make an accrual and contribution to their retirement plan. I know they were supposed to put their tax return on extension for making this contribution, but I’m wondering just how bad it would be if they did this anyway? I think if the IRS did an audit and the payment wasn’t paid by the deadline including extensions, then they can disallow the deduction, so in that sense they will be rolling the dice with the IRS, but are there other issues, perhaps fiduciary liability issues, that I should make the client aware of?"