Jakyasar

I would not know about the invoices but I have been told that the client did not want the 2021 work done but now desperate for 2022 deduction.

SB was not prepared/signed and I am not talking about amended return, just late filers. Thank you

One option I got is that better to file with the $500 late filing fee as the most conservative approach. This was by an ERISA attorney. There is no right/wrong way of doing this as no corrective measures are provided, ay least none that I could fine. I am not sure if I agree with thepensionmaven as not signing the SB timely possibly considered a late filing, IMHO. It is not an amendment in any form, again, IMHO. I simply did not deal with this particular client so anything from this point is a discussion in theory.

But the law says for plan years beginning after 12/2/2022 and I do not believe it makes a difference if new or amended plan. The sole prop does not have a deferral agreement signed by 12/31/2022. Just playing the bad TPA here (cop?)

Thank you but will use it as last line of defense and after giving the client the option.

A new one for me Client has an existing fully funded DB plan. For 2022, I was told that the schedule c income would be 60k. Suggested a new 401k set up for 2022. Did so and deposited full deferral prior to 12/31/2022. I just got the net c and it is $600 (thankfully db has no required contribution). So, now have a 27k deposit as of 12/31/2022 but no income to support it. What to do?

Tom Thank you for your input. If I understood correctly, for 2022, could still set up a new plan in 2023 but the plan year had to start on or after 12/29/2022 for 2022 deduction. This was discussed on this platform before but I am not remembering the exact details (sorry do not have time to check this week). I think it may have been for a short plan year.

Correction above "there is a law stating otherwise" Belgarath, I read it the same way you do but it what IRS says contradicts section 317. I do not read it any other way. I do not even accept as an interpretation. They may come up with an additional guidance. I am just making noise here and see if I am actually misreading all.

Interesting, there is a low stating otherwise. I do not have any of these nor will accept IRS' point of view but that's me. I did set up a 2022 DC plan for a sole-prop recently and 401k is effective in 2023. I will also check this out with an ERISA attorney and see they will say.

I am curious, no one is taking a shot at this.

This was just released thru BL today. Issue Snapshot — Deductibility of employer contributions to a 401(k) plan made after the end of the tax year | Internal Revenue Service (irs.gov) Not a 401k expert. Example 5 is an interesting one, is it correct though? SECURE 2.0 section 317 states for plan years after 2022. What am I missing here? Thanks

Does the plan have last day rule for top heavy, thinking out loud? Hours will not matter. Totally agree with Lou, do not lose sleep unless there is a very specific language in the plan document that requires contributions. My 2 cents.

Never a bother, clients do not always like to provide complete/correct information, for whatever the reasons are😀

Was the return done with extension?

I was asked the following (this is out of my realm): Partner A in Plan Origin terminated and had assets that required some attorney's involvement for liquidation (do not know the details) and Plan Origin is located in State A. Now ex-Partner A moves to State B and starts a PS plan - Plan Destination. While in Plan Origin, with the help of the attorney, ex-Partner A was able to liquidate the assets within Plan Origin (1M dollars) and the attorney's fee was 20k i.e. 2% of the assets. Once all settled with Plan Origin, 1M dollars were rolled over to Plan Destination. This ex-Partner A now wants to pay the attorney's fees from the assets which are now in Plan Destination. Can he do that and if yes, is there a cite for it? My comment would be, no, as all events took place within Plan Origin and once rolled over to Plan Destination, it is no longer a Plan Destination related expense. Curious what others have to say. Thank you

My 2 cents. Yes you do need it but there might be an exemption, I am sure others will chime in and correct me. You are correct on the second paragraph and it even includes children of the owners if and only if the sponsor is an s-corp - it is in the 5500EZ instructions.

You need to check the compensation determination period in the plan document as it may have different results for 404 deductions. This could be an issue with the 25% deduction especially if you have multiple plan years deducted in one fiscal year. However everything else is based on the plan year i.e. testing, contribution deadlines etc.

I am only concerned about DB and PS. Cannot have retro deferrals anyway.

Hi Did a proposal for 2022 for a one lifer. They said to go ahead, asked for w-2 and when I got it, there were 2 listed. CPA said the other was part-timer and terminated in 2022. Insisted on DOH and DOT. Surprise surprise, DOH early 2021 with DOT late 2022. I asked for hours and of course, full-time employee. Can set up the plan with 3 year cliff and/or 2/20 with no prior service before 1/1/2022 aka effective date of the plan. Not sure how the partial termination would play here as employee is not replaced. What do you think on this? The question here: Is it ok to set up the plan now with 2 year wait (100% vesting is not an issue as it is only the owner)? This is unchartered territory for me and not sure about discrimination issues. Thanks

Thanks Lou, 1563e is where I am thinking about. Definitely needs to go to PBGC Much appreciate it.

Agreed on that. Corp X only employs the spouses, not the owners. Would that make a difference?

Hi Veterinary, PLLC, 10 participants, 2 owners (50/50) and their spouses Controlled group with Corp X, LTD, employees are the spouses only and it does not perform veterinary services nor any other professional services. Is the DB plan covered by PBGC? Thanks

Thank you all, just wanted to be sure.

Hi Drawing a blank here. Fiscal plan, plan year 7/1/2022 to 6/30/2023 Owner and spouse only Limitation year is plan year=fiscal year 415c limit is based on 2023 They take salary once a year and as of 6/30/2023. The 401k deferral portion, is it based on 2022 or 2023 limits? Do not worry about the multiple deferrals within plan year as all deferrals are always done as of 6/30. Thanks

25% deduction based on above is 55.25k, owners getting 54 leaves only 1.25k which clearly exceeds ee total of 4.5k therefore fails deduction. Not even going there with the ACP test as Lou said.