Jakyasar

One addition, if the first year was 2020 that the son became eligible, if the sponsor is an s-corp, 5500EZ is ok, it is on the 2020 5500-EZ instructions. "Covers only one or more partners (or partners and their spouses) in a business partnership (treating 2% shareholder of an S corporation, as defined in IRC §1372(b), as a partner);" This was discussed on this forum sometime early last year, might be worth checking out. Prior years may need to be redone.

Thank you both for your comments. As I have no required contributions for either BOY or 4/1, I can pick either.

Hi Calendar DB plan with EOY valuation. 1 Lifer Date of termination 4/1/2022. Need to run the final val. Under automatic, is my new val date 1/1/2022 or 4/1/2022? I think either is fine but want to double check. Thank you

Thank you, I already did but they pulled a fast one saying amendment can only be effective beginning of the month, so I saved 25 days, go figure. At one point, it is not worth the battle once the war is over. It took them 2 months and lots of waste of my time get this done for a simple thing. Just venting.

Any takers?

Based on my research, I am beginning to think the suspect is box 5, could be wrong but some very reputable CPA's agree with 5.

Hi A record keeping company (RK) that is also the document sponsor insists on 30 day waiting period for the following amendment to be effective: Plan has 401k+ 3% NE (non-elective) SH+PS provisions Currently, 401k and NESH has 1 year wait and age 21 with first month following completion of eligibility as entry date. PS portion is 21/1 year with dual entry. Plan sponsor wants to eliminate the 1 year rule (age 21 stays) for the 401k+SH portion and have immediate entry as of date of hire but does not want to change PS provisions. Is this true that they have to wait 30 days for a more favorable eligibility? RK insist on it so that they can change and provide an updated SH notice. Thank you

The document excludes nothing. So, box 1? Is that what you are saying?

So, it is box 5 for pensions?

There is a deferral but it is roth so no adjustment.

Actually it is not. I provided rounded #'s. The real numbers are too much of a coincidence and here they are: W-2 box 1 76,827.21 W-2 box 5 66.999.93 W-2 box 14 - other - 2% SH 9,827.28 - this is the difference between box 1 and box 5

Sorry if this was asked before, cannot seem to find it This is for 2021 W-2 box 1 100,000 W-2 box 5 90,000 W-2 box 14 - other - 2% SH 10,000 - this is the difference between box 1 and box 5 What is the 2021 salary for pension purposes? Thank you

Oh, they know

Hi Owner only DB plan. Hard frozen in 2021 before any benefit accrual. No income for 2021 and 2022. Also terminating in 2022. Plan is slightly underfunded. Software states fails 401a26. No PBGC coverage. Never had any employees. As no key is benefitting, should pass 401a26 automatically, correct? Thank you

Agreed and thank you for your input.

Hi Yeah, another reserved section that does a lot for pensions. I always (has only a few in the past many years) used expenses for fees paid to pay for DoL permitted expenses like document fees, termination fees. One thing escaping me is the management fees directly deducted from the account by the brokers/investment companies (brain fried so cannot think today). Thank you

Having a discussion about this. What do you consider a plan related expense? Thank you

Hi I know this was discussed before but cannot find it. A sole-prop has multiple business's and files multiple schedule c's. Let's call them X, Y and Z. No employees. Pension plan is sponsored by X only. X net amount is 200k - only sponsor of the plan. Y net amount is 50k Z net amount is negative 75k. If I recall correctly, net c for pension is the sum of all 3 i.e. 175k and this is the amount se tax needs to be calculated. Do I recall correctly? Thank you

So you still use 150k of schedule c but adjusted with the lower se tax? Not sure about this. I agree it should be 150k figure for pension though. Hmmm.

Thank you both but I am not sure if the reduced se should be. It is higher on the net c I.e. lower deduction. I did ask all those questions to the cpa, waiting to hear.

Hi I have a confusing situation I have never seen it before. John, LLC (filing as a single member) provided me with the 2021 schedule. This is the entity sponsoring the pension plan. I was just informed that, the LLC is a 16% partner in a totally unrelated entity (assume no CG and ASG issues at this time). Net C amount was 150k but the K-1 received from the partnership show loss of 50k income. This loss was not reflected on the schedule c. When I was provided the SE tax form, the SE calculations were based on 100k. Has anyone seen a situation like this? Currently I have no other information and asked about the nature of the partnership income. What am I missing here and what should the income be for pension purposes? Thank you

That is already in the works, thank you.

Thank you and I told them no anyway.

Hi A one person employer has a 401k plan and for 2021 already put in max deferral and PS and also filed the corporate tax return by 3/15/2022. Now wants to set up a DB plan for 2021 but take the deduction in 2022 (given the level of 2021 salary, the 31% rule will yield only 9k of DB maximum for 2021 but 2022 will have a high enough cushion to have 2021 and 2022 deduction). If the corporate return is filed without any extension, too late to amend for 2021 and have a low DB deduction as well as adjusting any other deductions, correct? If filed with extension, can he go back and redo the deductions (2022 will be an issue as well but easier to deal with). Thank you

I agree with Cusefan's approach. Just add additional contributions under maximum deductible rules (it will increase every year even with HCE limitation for formula adjustments - cushion limitations) and adjust the pay credit every few years. This is a good approach/control if you want to limit the increase in pay credit and the accrued benefits at end of each year to 415 limits. Just my 2 cents.