Jakyasar

Any takers?

Also included in 2023 testings

CB/DC combo 401k with NESH at 3% Terminated on 12/22/2022 but received the final paycheck in 2023, last payroll of 2022. No hours worked in 2023. Do you agree for 2023 Need 3% NESH Need 2023 gateway

Great information, thank you for sharing.

FMSINC Thank you for all the links. I agree about the RE agent being ICs (with the proper credentials) but when your title is marketing manager, how is this a RE agent? Hmmm But again, I do not know if they have the credentials as listed in the first link you provided so will dig in more. Ernie, I agree 1099s cannot be salaries. This is getting crazier by the minute but will have an attorney go nuts about it. Thank you all for your input.

Thanks for chiming in with the additional information. I agree with the common law employee statement but what do you use for compensation if they are getting 1099s?

And it walks like a rose

Hi Ernie Thank you for the write up and the questions. I am approaching this from both points. Point 1 being, are they really IC? Not my place to determine. This is why we have attorneys to make that determination. The fact that they are on the website and indicated as managers, hmmm. Point 2 being, if not IC than is it reasonable to pay them on 1099 basis and can the 1099 be used as a salary? My immediate reaction no but again not my place to make any comments. In my opinion both points require an attorney's blessing and treated accordingly.

I never make that determination or negotiate nor attempt to, not my place as I have no clue about the biz structure. I know about the 20 step rule and also know enough for pass/fail smell test and also enough to make noise about it. At the end of the day, it is between the sponsor and the CPA. I can only either warn them about the dangers or not accept as a client. nothing else to do.

Real estate agent Joe operates as a corporation, only owner, only employee. Checked the website and Joe has a team, Mary, sales associates and Jane, marketing manager. I am told that Mary and Jane are both paid as 1099 employees. The burden of proof for independent contractor is not me, the TPA Joe wants to set up DB and 401k plans. So, what is wrong with this picture?

I have what you provided and want to add also that, the plan has to be set up by 4/15 and no extension is allowed. I read this somewhere, cannot remember Ok then, so nothing new added, thank you for your comment.

Hi Lou I checked 2024-2 but did not see any reference to section 317, may be not looking correctly. Do you have the section they are referring to? Out of curiosity. Thanks

Finally got my system updated and confirmed my suspicions but want to ask out there as well. Looks like at 65, the APR is lower for 2024 then 2023 and for someone at age 65 with full 415 limit, the 415 lumpsum dropped by approximately 33.9k, ouch All agree?

Thank you for confirming

Hi A sole prop can now set up a 401k plan retro to 2023 and make a deferral, correct? No employees and must be set up prior to 4/15/24 (no extension allowed) SECURE 2.0 - effective date was for plan years beginning after 12/29/2022 Am I wrong?

Neither does Datair, I am told but the issue now becomes, if you do answer what will they do and if you do not answer what are the consequences.

Hi Preparing my first 5500 for 2023. I heard some mixed comments about completing the new compliance questions. I am answering them but wanted to check what others think out there. No multiple employer plans. Thanks

Addendum, under 412d2, phew

Hi It has been many moons since I have done one of these under ... drawing blank Given that amendments now can be adopted after year, if I want to increase deduction for 2023 and sign the amendment by 3/15/2024 (2 1/2 months), could it be just an amendment or still an election needs to be made under ... drawing blank (I think it 412c3 or something like that) Thanks

265k

Hi Thanks for the input. Employee is key for 2024 because had enough salary for 2023 and also an officer. Otherwise, i agree that they need top heavy minimum for 2024.

Having a discussion about the following: Combo DB/401k plan, top heavy For 2023, owner and spouse are the 2 participants in the 401k and only owner is in the DB (spouse does not work enough hours to be eligible - assume all kosher). They hire an employee who will become eligible in both plans as of 1/1/2024. Employee makes big bucks in 2023 therefore HCE for 2024. During 2024, employee will be 20% owner (not as of 1/1/2024 though). Let's say employee will be a 20% owner on 3/1/2024. DB plan has 0.5% of pay formula and states all top heavy is provided under 401k plan. Employee will be in the DB plan for 2024 so no 401a26 issue. 401k plan's top heavy provision states for both key and non-key. For 2024, owner defers max and employee will not defer. There will be no PS allocation. Employee is not excluded under the 401k/PS categorically. So, does this employee need to get any kind of top heavy allocation for 2024? What am I missing here? Thanks

As per above comments, to keep thing simple, can't you just have a special eligibility amendment for this particular employee assuming that he is uniquely qualified like a job category or something like that?

Hi Setting a new plan effective 1/1/2023 and want to exclude service prior to inception for vesting purposes. Prior plan was terminated during 2017, all assets distributed in 2018 (10/15/2018) and final 5500 was filed in 2019. If I recall correctly, year of termination should be used i.e. 2017 and therefore plan termination was more than 5 years since 1/1/2023. Thus, the new plan can exclude YOS for vesting prior to 1/1/2023. Agree? Happy holidays to all.

I have not done one but, Datair has the capabilities of the conversion. Keep in mind that A+B method should be used where is the converted opening balance and B is the additional pay credit. FTW document supports this as well.