Jakyasar

Hi Preparing distribution election forms and not possible to get notarization. 3 participants, father, spouse and daughter. Daughter owns company 100% and can witness both parents signatures on the distribution election forms. Father is the president of the company, can he witness his daughter's spouse's signature on the distribution election form? Thank you

Any takers

Believe me, I am trying but to no avail but the year is still young.

Hi Takeover plan. First time for 5330. 2 shareholders - both HCE 2018 salaries 200k each thus max 100k deduction limit. Deposited 110k during 2018. Each got 50k allocation and suspense account got 10k (5330 penalty was paid) 2019 salaries 220k each this max 110k deduction limit. Deposited 110k during 2019. CPA informed me 108k was deducted and does not want to amend the return for 2019. Assume no earnings for 2019, to simplify. Is the 2019 amount for 5330 penalty 12k? Any other way to reduce? As the 415(c) limit of 56k is not violated, can any of the excess amount be allocated to the shareholders even if not deductible? I do not think so as not deductible??? Thank you for your comments.

Hi My apologies if this was discussed before. Existing 401k plan with SH match. Looking into adding a CB plan for 2020 Can it be switched to non-elective for 2020 and if yes 3% or 4%? Any other issues not asking? Thank you

Very interesting comments and thank you all.

Updated info. Client was an employee of X, Inc. and received a W-2 with full traditional deferral. After leaving, client started her own company Y, Inc. S-corp. Gave herself a W-2 and did Roth deferral, again full amount. Other than I told the CPA to have each document checked, any other method for correction i.e. which one should be corrected first, traditional or Roth? This is important for taxation purposes. As the client just disclosed this double deferral, I doubt X, Inc. may do any corrections? Any other suggestions? Thank you

I will certainly bring this up and see if there will be any provisions to overwrite the other. Thank you

Hi I was asked the following by one of my CPA's for 2019. "I have a client whom who has two W-2s and whom who is allowed to make catch-up contributions on her 401(K) contributions. On one W-2, she has made traditional contributions of $25,000 and on the other W-2, she has made Roth contributions of $25,000. Since she is limited to the $25,000, can she just have the money distributed to her in 2020 and have a 1099-R prepared" Since one is deductible and the other is after taxes, how is this handled/corrected? I believe it is all for 2020 but which deferral is to be corrected? Thank you for your comments.

Thank you both for your input. Have a great weekend.

Hi Looking into designing a new CB plan for an existing 401k plan and trying to determine if Joe is an HCE or not for 2020. Joe was 50% owner in 2019 and received 75k in salary. Joe terminated in 2020 (not informed about the hours yet but let's say over 500) and sold his share to the other owner on 5/15/2020. The new plan will be effective 1/1/2020 but adopted in November 2020. The val date will EOY. As Joe was an HCE as of 1/1/2020, is he an HCE for all year by ownership? Anything I am not thinking of? May be top 20% rule (not sure how it would apply here and effectively when). Thank you

Good morning Andy Thank you for your input, what a hassle it is.

Good morning Mike The plan sponsor is not in a disaster relief area (they are in Northeast corridor). Is there another disaster relief that I am not aware of? Thank you

Hi Sponsor is an S-corp. 2019 MRC is 150k and they deducted 200k, all fine, however ( As far I know, S-corp extended filing deadline is 9/15/2020 (not extended by any Acts/laws) but they made the deposit today. They lose the deduction for 2019, correct? Deposit was done by wire transfer so 9/18 date is firm. As for the extended deadline to meet the MRC. For 2019 plan year, assuming that they missed the deduction deadline, what should I use for 2019 sch SB+5000? All 200k or 150k plus a few days of interest adjustment, say 1k for total of 151k? I must be missing something here. Thank your thoughts/comments

Agree that the facts matter. My concern is that what right questions do I need to ask. All of you provided some guidance and will check with the prospect. Thank you all.

Thank you for input, correct on the follow the money.

Actually have one follow up question. If they are like LPL i.e. their assets are invested with LPL or Schwab, what are the consequences? Again, thank you for your comments/expertise.

Bill, much appreciated. Thank you and be safe.

Thank you for your response. As this is an area where I do not know much about, could you elaborate LPL deal?

Good morning all Looking into designing pension plan for a financial planner. Owns 100% of X, Inc. and has employees. Checked the website and see that other names were listed other than the employees. After questioning the additional names, the following response was provided: I own 100% of X, Inc. but affiliated with Y, Inc. (also a financial form) and have access to Y, Inc.'s people. No common ownership or shared employees. What am not asking here to determine any issues? Thank you PS PBGC coverage is another issue - any thoughts?

So, if any portion of the IRA is deductible, it will be in addition to the 56k of profit sharing? I understand that it is not the TPA's issue to determine the MAGI for deductibility of the IRA. But curious about the additional possibility. Thank you for your response.

Hi New client. A partnership, 2 partners, each making over 500k. deducted full 56k profit sharing for 2019. Now I am told that they have been making IRA contributions as well for many years in addition to maximizing profit sharing. Can IRA be in addition to the maximum 415(c) limit? Thank you

Hi Bill Thank you for your response. I am agreement with you. Cumulative is the way to go but agent is asking?? Be safe.

Hi Doing some research for an insurance agent about using seasoned contributions in a 401k plan that has 4 sources: Deferrals, match, safe harbor match and profit sharing. Q1: As all is considered employer monies, I can use 25% of cumulative contributions+forfeitures for universal life policies, correct? Q2: As all is considered employer monies, I can use 49.99% of cumulative contributions+forfeitures for whole life policies, correct? Q3: This is where I cannot tell if I can use all sources as seasoned monies. I am ok with the deferral and profit sharing sources but could not find any example including the match and safe harbor match (checked on EOB and no reference to match or safe harbor match - not that I have seen any). Can the match sources be used for either for cumulative and/or seasoned contribution calculations? Thank you for your comments.

Ok, whatever it is, thank you